If your startup or small business is ready to make the leaps and bounds into big business with the help of venture capital, review your business for any intellectual property that you should have on file with the proper U.S. government office.  Patents, trademarks, and other copyrights are important legal intellectual property and may be vital to the success of your business, especially if your enterprise consists of invented or creative works.

Here are the main types of intellectual property and where they can be registered:

Securing Patents

A patent may be granted to you, the inventor, by the Patent and Trademark Office.  Patent terms are 20 years from the filing date and are only effective within the U.S.  A patent protects the inventor, or whomever files for the patent, by granting the legal right to prevent or exclude others from “making, using, offering for sale, or selling” the invention in the United States or “importing” the invention into the United States.”

If your business idea is an invention that you have conceived and developed, and you plan to take your business invention to market, apply for a patent as soon as you can.  You may need the assistance of an attorney specializing in intellectual property.  However, having the patent filed before you meet with a VC group shows them that you have the legal right to prevent others from stealing your idea.

Obtaining Trademarks

A trademark is a word, a name, a symbol, or a device which is used to distinguish the source of goods in trade with goods.  McDonalds™, Neiman Marcus™, and Target™ all are distinguished by trademarks that prevent others from using their name and symbol in the trade of goods. 

Trademark rights may also be used to prevent others from using a confusingly similar names or marks, but it does not prevent others from making or selling the same goods under a definite separate mark.

Trademarks are generally used with established businesses that use their name and/or logo as a brand for selling.  Most startups will not have the need for a trademark, but if your small company has been conducting business for a period of time and has a recognizable name or logo, it would be wise to register it with the Patent and Trademark Office.

Using Copyrights

A copyright is a form of protection granted by the Copyright Office of the Library of Congress to the creators of “original works of authorship.”  These include “literary, dramatic, musical, artistic, and other certain intellectual works, both published and unpublished.”  The 1976 Copyright Act gives the owner of copyright the exclusive rights “to reproduce the copyrighted work, to prepare derivative works, to distribute copies of the copyrighted work, to perform the copyrighted work publicly, or to display the copyrighted work publicly.”

The copyright protects only the “form of expression” and not the actual topic matter of the creative work.  As an example, a magazine article could be copyrighted, but it would only prevent others from copying the actual wording of the guide.  It would not stop others from writing and publishing an article on the same topic.

By having your patents, trademarks, and copyrights protected, you show venture capital firms that your ideas are well protected from competitors. 

As an entrepreneur, you know that “cash is king.”   A proper working cash flow is a vital key element for any business owner.  If you are an entrepreneur operating or starting a business, you will need to effectively manage your cash flow operations, especially if you are seeking venture capital growth funding.

All businesses, large or small, must have an adequate supply of on-hand cash to pay for supplies, payroll, lease, utilities, and any other regular operating costs.  If you fail to pay your employees or cannot pay a creditor for products already delivered, you face serious business issues that could lead to bankruptcy. 

How do you keep adequate cash on hand?

Be liquid

Although cash is the most liquid when paying debts, you could also have capital invested in other liquid forms, such as money market accounts or CDs.  The key with these types of investments is to make a little interest on your liquidity.  If you have a good supply of cash, consider keeping a portion in these types of small investments to generate a small return.  Make sure the accounts will still allow you to easily and quickly access the cash when needed.

Have adequate funding sources

Where can you get access to cash when you need it?  Having an adequate line of credit through a bank can be a business life saver.  A line of credit is an open credit source where your business can access cash only when needed and pay back over time.  The line of credit is reusable and does not close after borrowing. 

Use purchase order and invoicing

If you purchase goods for resale or further processing, try to open an invoicing system with your vendors.  Through this system, you order supplies with a purchase order from your company.  The supplies are delivered and invoiced for payment later from the vendor.  An invoice generally will have a “net 30” term where the full balance is due 30 days from the date of invoice.  That gives you about a month where you can keep cash for liquidity purposes and increase your cash flow from sales you make during the month. 

Borrow for capital improvements when necessary

Sometimes your business needs capital improvements in order to function better and more efficiently.  An efficient operation is a cash saving operation.  Whether it is for a new computer, new equipment, or a new building, you may need to borrow capital to pay for the improvements.  Be sure your company will be able to repay the loan with interest and borrow only enough to acquire the improvement(s) and stay liquid during business operations.

Stay on top of your business cash flow.  If your business manages cash effectively, you will also be well suited for potential venture capital investing in the future.

Congratulations!  You’ve submitted a pinpoint precise business plan.  Your presentation to the VC firm was outstanding, well-rehearsed, and provided all the right answers to questions.  And the venture capital firm says they want your business as part of their portfolio.  What happens next?

Before your business sees a dime of VC funding, you will be required to allow the VC group to perform due diligence.  If you’ve made it to this stage, your chances of final approval are vastly improved.  However, all information must be in order and accurate as you have promised – or else you may see your VC dream unfulfilled.

Financial books

Venture capitalists will want to see all recent financial statements from the last few years.  If you have a CPA who prepared the statements, then their certification of accuracy is a big plus in the eyes of the VC firm.  If you have kept all books yourself or hired a non-certified accountant to do the bookkeeping, the VC firm may request to review your ledgers for the last few years.  Be prepared and cooperative in all requests for your finances.

Meetings with your current investors

A VC firm may want to speak with any current investors you may have.  If your business is a corporation, a poll may be sent to shareholders.  If you have loans with other private investors or banks, they may want to speak to them about your payment history and how you manage cash flow.  Again, be cooperative with providing contact information as requested.

References

Up to 10 or 15 professional references may be requested by a VC firm.  These could be customers, business partners, personal references, or anyone who can provide the VC firm with insight to your business approaches and the market.

Additional market research

If your business is in an arena that is unfamiliar to the VC firm, they may want additional market research to help them understand the market niche and where your business fits in it. 

Additional meetings

Most likely, the VC firm will have plenty of additional questions for you and your management team.  Expect to be called for extra meetings to answer questions in-depth. 

You may also be confronted with probing questions that deal with negative aspects of your business they have discovered.  Remember to always keep your calm and be professional.  If confronted, answer all questions as best you can.  You may not have a solution to give them immediately, but always agree to tackle any concerns that the venture capital may have.

Observe you, the entrepreneur

Believe it or not, a VC firm may perform extensive probing to fully understand how you manage business situations.  They want to know how you will react to market pressure and uncomfortable business situations.   Your reaction to probes and concerns tells venture capital firm about your ability to manage a company in tough times.

Obtaining venture capital funding is not easy.  To ensure their investment will be entering into capable hands, a VC firm will want to perform due diligence with all groups they fund.  Be prepared to cooperate and manage with any potential situation with professionalism and genuine enthusiasm. 

Though you may have a stellar business plan and gained the interest of a venture capital firm, you need to prepare for your presentation.  Many entrepreneurs vying for VC funds are turned down at the pitch stage.  Why?  They were unprepared and did not deliver convincing answers to questions.  You can avoid this pitfall by preparing adequately for your pitch with these following strategies. 

1. Rehearse, rehearse, rehearse

Stage performers don’t confront a paying audience after one or two dress rehearsals.  They plan every move, every emotion, and practice each scene time and again until it flows freely and naturally.  Do the same with your presentation.  Practice it until you know the information you want to deliver intimately and can present it comfortably.

2. It’s in the eyes

Nothing is worse for a venture capitalist firm than to watch an entrepreneur who fails at public speaking.  In order to grab the attention and excite your venture capitalists, you need to show excitement and enthusiasm yourself.  When you practice your pitch, also practice your emotional delivery.  You don’t need to speak loudly, but do speak in a good audible tone.  Show your excitement in your face, particularly the eyes.  They will be watching you.  Your enthusiasm can spread to your VC audience.

3. Share the stage

Don’t do it alone.  Try to get everyone on your leadership team to make a part of the presentation.  Different segments of your plan could be divided, such as the financial section or the marketing strategy.  The more your VC audience sees all members participate, the better they will understand everyone’s enthusiasm for your endeavor.

4. Prepare for Q & A

Rarely does a practiced presentation go from point A to point Z as rehearsed.  Expect your VCs to throw questions at you and your team members as you proceed with your pitch.  Oftentimes, a question will arise that will be answered in an upcoming portion of your presentation.  You could give a teaser of an answer, but you may simply and politely inform the questioner that his or her question will be answered in detail in an upcoming point. 

After a presentation, there will usually be plenty of questions from your potential VC group.  You will best be prepared to deliver answers by knowing your facts and figures as best you can.  However, don’t stumble if a question is raised for which you cannot provide an answer.  Simply be honest and inform that you do not have an answer at the time, but will follow up after the meeting.  However, don’t forget to follow up.  Be sure to deliver an answer by email or phone call to the individual or group. 

Getting ready to deliver a presentation should take plenty of preparation time.  You’ve spent the time focusing your business plan, but a live presentation is where you will deliver the emotion and enthusiasm of your entrepreneurial venture.  So be excited, get them excited, and invite them along for the ride. 

Before you ever sell your first product or service, you need money to create and manufacture the product, and money to market your service or product to potential customers.  That is where start-up or seed money comes into play.

First, there are many ways to secure start up money.  Your business could obtain start up money from:

• Your own pocket – If you have capital available to put into your business idea, always start with your own funds.  While you should not take out 2^nd and 3^rd mortgages on your home, other investments that have grown and paid good dividends can be used to help your business take off.  Remember, investing yourself gives all of the returns to you as well. 

• Loans and Grants – The Small Business Association (SBA) has a guaranteed loan program for small businesses where you could borrow tens of thousands, and in rare cases, even hundreds of thousands of dollars.  The U.S. government also has thousands of grant monies available for small businesses.

• Investors – Borrow money from friends and family.  Borrow from other investors who have faith in your business idea.  Venture capitalists are also known to provide seed money to good business ideas.

Once you have the appropriate seed money in hand, what is the best way to use the money?  

Your Beginning Operations

Your new seed money should be used wisely to tweak your product(s) and know your customers.  Perform as much market research as you can afford to do.  Do it yourself or use market research firms who specialize in obtaining good data and helping to formulate proper questionnaires.  The better you know your customers and their buying habits, the better you will be able to develop a product that sells and market it to the right demographic.

Use seed money to conduct your product research and begin manufacturing operations.  Your business won’t sell anything if it has nothing to sell.

Your seed money should also be used to market, market, market.  Get your business name branded and known by your target audience.  Develop your marketing plan and start advertising your products and services.  You need customers, so let them know how they need you.

Getting a new business off the ground and running at full speed is not an easy task.  But money from the right sources makes it easier.  The more you can know about your customers and products, the better situated your business will be to hit the ground running.