Selling Venture Capital Firms on Your Business Idea
Any entrepreneur with a new business idea believes their idea has merit and is a gem of potential. However, the hard part of the journey to business success is convincing others that the idea is a good one. Not only does the idea need to be sold on customers, but also to business partners like venture capital firms.
Obtaining start up capital for a new business idea is one of the first priority goals to simply get the business off the ground and rolling at full speed. Bank loans and family investors can help, but an entrepreneur who can finance his or her own way is extremely rare. Venture capital funding can infuse not only money, but valuable strategy advice for success.
Convincing a venture capital firm to fund your new business is a tough task indeed. VC firms are highly selective, but the right strategy to help sell your business idea will give you an edge in convincing those with the money to lend some to you. Here are a few ideas:
Without a doubt, a focused and refined business plan is essential to get the attention of venture capital firms. The business plan is a concise document that is the blueprint of how a business will move forward and succeed. It includes management profiles, sound marketing strategies, and reasonable financial projections.
Selling a new business idea to venture capital firms requires not just a solid business plan, but also a brief business proposal. The business proposal is also a concise document that acts as the initial “pitch” to a potential venture capital firm.
The business proposal must present an educated request for capital based on sound research, experience, and prior studies. The proposal absolutely cannot be a request for money simply because your business idea is the “next best thing”. A venture capital firm will look for backing evidence that an idea is marketable, statistics on customer acceptance, and a realistic competitive strategy.
If you are one of the chosen few who pass the initial venture capital proposal stage, you will then be asked to present your idea in person to the firm’s decision makers. Be advised that a live presentation should include a highly edited and concise PowerPoint presentation slide show and a polished verbal pitch with preparation to answer tough and direct questions.
You can convince venture capital firms that your business deserves their financial backing. However, to do so requires your attention to the details of your business idea, and how you present your ideas to the VC firm. Get your metaphorical ducks in a row, polish your presentation, and you will have a much better chance of getting the attention of VC firms.