Venture Capital: Presenting Business Plans to New Investors

The new generations of entrepreneurs who have developed their business to the point of needing investors to build larger, are hesitant about giving up control of their business. CEOs that are raising capital for their business want to know that the investor can bring a benefit to their business. Entrepreneurs are more likely to give up some control of their business, if they feel solid chemistry between them and the investor and if the investor has great skills with plenty of contacts to help grow the business.

Venture capital firms are looking for businesses with solid business plans that are realistic. The business plans should outline the financial planning for the future growth of the business that covers all aspects. The plans should prove beyond a doubt that the projected plans are solid and why more financing is needed. Documents need to show how much money is needed so the business can grow into profitability.

Most investors are also looking at those businesses where the owner has put up his own money for the success of the business. If the owner is willing to take the risk on himself, investors seem to be more willing to put up the extra capital needed. Entrepreneurs who are willing to take a personal risk are usually harder working at making the business grow.

When presenting the business plans to investors, make sure the presenter has a good knowledge of management and can be forceful in bringing the facts to the table. Make sure the whole team presenting the business plans to potential investors, are well versed on presenting the plans. Investors want to see a positive attitude from those that are going to be running the business and spending the money from the investors.

Investors will want to see financial statements and budget plans for the business. If the business is, up and running create a quick layout of the financials and how the business is doing. Investors are not looking for a perfectly financially sound business. They are looking to see how the finances are handled and what improvements need to be addressed.

Capital investors are in great demand. Make sure that all the business plans are completely prepared properly and that all presenters are equipped with the right financial reports, charts and budgets for the business. A poor presenter could diminish the chances of the business gaining the financial money needed to grow or expand a business. Investors will ask all sorts of questions and the answers need to be the ones the investors are looking for without any hesitation from the presenter. Presenters need to know the business inside and out and be able to have the patience for answering questions from more than one investor.

The final step would be to show exactly how much money is needed and how it will be spent to improve the business for future growth. Do not inflate the amount of money needed. Investors are very knowledgeable about business finances and do not play games when investing their money.

Venture Capital Investors Will Want You to Follow This T.I.P.: A Team, an Idea and a Plan

Entrepreneurs who want to raise finance for their business will have to begin with an outstanding business idea in order to convince their investors to raise finance for them.

You should not focus on one aspect only. Entrepreneurs need to understand what the investors really want, especially if you are into venture capitalism. Here is a T.I.P. for you: You need to have a TEAM, an IDEA, and a Business PLAN.

1. Your TEAM.

The best business ideas come from a team that can execute the plan and actualize the goals. You can have greater convincing power if you have a talented, experienced, and team instead of being a lonely entrepreneur.

You should also consider your team members to have some form of financial commitment. In other words, you should consider family and friends as your first investment pitch. Investors simply want to know that when the hot, steamy stuff hits the fan, each of the team members have more to lose than just their time spent and energy.

2. The IDEA.

Investors in Venture Capitalism are looking for a sure return on their investment that is substantial enough to compensate for the many other losing ventures they will back. Venture Capitalism involves high risk of failure especially for start ups, and they want to hear a business idea that shouts significant growth potential.

You may want to ask yourself, is your business idea big enough? Can your idea be turned into a franchise? Or, Can your idea last long enough to be a license, Can you find ancillary products or strategic partnerships for your new product idea?

3. Your Business PLAN.

Entrepreneurs should be able to give a detailed and smooth presentation of how the IDEA will become a business opportunity that is worthy of investment. Lay out a clear strategy of how you and your TEAM will actualise your current strategy. Make sure to demonstrate your knowledge and capabilities in the market.

Always remember that you don’t have to be alone in venture capitalism. You can start by contacting the investor directly and inquiring what they want to see. They can give you priceless recommendations during your initial meeting.

You also have your friends, family, fellow entrepreneurs, and mentors who would be willing to listen to you, advise you, and give feedback as you gather your TEAM, develop IDEA and formulate PLAN.

These people and the T.I.P. can help you decide whether to push or pass on the investment. You will get the chance to refine your approach and be ready to finally deliver your pitch.

Bizangels Network

Venture Capital and Angel Investors

Despite the fact that Venture Capital funding fell during the 2008-2009 fiscal year, venture funding also picked up along with mergers and acquisitions. There is no question that there have been some tough times for both entrepreneurs and venture capitalists alike. There are signs that VC funding will be back in the norm at the beginning of 2012. There is no question that in most cases, when entrepreneurs are looking to raise capital from angel investors or venture capitalists, the odds are almost always against the entrepreneur.

In most cases, the entrepreneur ends up dealing with conservatives who invest in start-ups, which involves a rather high risk to the investor. In any case, for an entrepreneur to have any chance in raising venture capital he has to do quite of bit of work and research to make sure that everything is right and that the investor agrees with the research. The most important thing to look at here is that you need to make wise decisions in your business plan and all your research when going to propose your company to an investor.

As far as different industries are concerned, venture capital firms usually invest in the industries and sectors that their partners have experience in. In most cases this primarily depends on the firm itself and the expertise of the partners in that firm. Through services you can get online you can gain access to many investors with a wide range of different industry expertise. There are thousands of investors with all kinds of different industry, geographic and stage preferences. All of these preferences are very important in choosing investors.

The difference between angel investors and venture capitalists is that, on one hand angel investors invest their own money, whereas venture capitalists invest money from funds that they manage. Furthermore, angel investors are not professional investors, whereas venture capitalists and other institutional investors are professional investors. What does this mean? Well, it is quite simple. Angel investors usually invest their own money and since it is their own money, they have a wide range of different reasons for investing it. On the other hand, venture capitalists and equity investors invest on a professional basis and do not invest their own money. Institutional investors usually work for a private equity firm or, in the case of venture capitalists, a venture capital firm. These firms manage equity and the money invested usually comes from different firms. These funds can come from pension funds, endowments or the private funds from wealthy families.