The best new businesses are those with innovation incorporated in the business process or product.  The dictionary defines innovation simply as the introduction of a new idea, method, or device.  However, when it comes to venture capital, this definition is taken a step further: innovation is an idea or method that is new and improved. 

It is not enough to present venture capitalists (VCs) with a new idea.  The old saying that ‘anything that can be invented has been invented’ is somewhat true.  Most inventions are simply innovative improvements on an old idea.  Your business idea must be a concept that can impress VCs as revolutionary and marketable to customers as something they need.

Innovation doesn’t need to be restricted to useful products like cell phones or automobiles.  Service innovation is highly in demand as well.  If your entrepreneurial venture is a service business, show your potential financing partners how you have designed your service as something newer and more reliable than previous methods.

Fulfilling an Outstanding Need

An innovative business idea should fill a need.  Your potential customers should find your product or service something they need in their life to make it easier, improved, or more fulfilling in some way.  In that sense, it should fill a niche in which you can emerge as a prominent provider of your service or product.  Don’t just make a new golf club.  Create a club design that can help solve a slice or cure a hook.

Innovative Demographics

Your target customer could be part of your innovation.  Show venture capitalists how your product will sell to teenagers with limited budgets or to wealthy yacht owners.  Your market research should demonstrate to VCs how your product or service will be in demand to what market segment.

New Knowledge

If you have researched a new and improved idea, method, or device, display your work proudly before a group of VCs.  Innovation in service or products can be found with new knowledge gleaned from research.  Reveal your scientific methods and results and how they can improve the lives of consumers. 

Your innovative strategies are what will set you apart from other businesses when trying to obtain venture capital funding.  Let your innovation shine and use it to convince venture capitalists that your business will be in demand.

Tags: angel investor, angel investors, business funding, Find funding, vc marketing plan, venture capital, Venture Capitalist

This entry was posted on Monday, January 5th, 2009 at 3:18 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.