Raising Capital For New Ventures

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Raising capital for new ventures: Expert advice

Venture capital is financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential. Venture capital generally comes from well-off investors, investment banks and any other financial institutions. But venture capitalists don’t only provide you with the funds but through this type of funding they usually also receive equity in your company and take an active role within the company.

That means you could lose having absolute control over your company’s decisions and direction, which can result in your company evolving into something different than what you and your co-founders had originally envisioned. If that’s something you’re okay with and you’re new to raising venture capital here are some experts tips to get you started as found in an article featured in business online magazine Forbes.

Look for Venture Capitalists in your industry.

If you’re a startup or expanding your business seek venture capitalists that fund in your stage of business development. By learning what types of people your potential Venture Capitalist usually backs. If your business is technological, seek venture capitalists that help entrepreneurs in the tech field. Just as seeking Venture Capitalists that fund entrepreneurs who often get overlooked in the business world.

It’s imperative to research Venture Capitalists thoroughly before you submit your proposal. Your research will help you determine if your business and team are aligned with the venture capitalist’s process, otherwise, you risk running into problems down the line.

Think of Venture Capitalists as teammates.

Since venture capital investors take an active role in your company, think of them as your teammates rather than simply as a source of revenue.

Choose a firm that you’d enjoy working with and that can consistently drive you and your business to a higher level. The investor will only be part of your venture if they think that your business and team can win. As such, they’ll be on your side, trying to make those strategic moves to hit their growth targets.

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