Every start-up entrepreneur dreams of the day when his pet project will be among the top companies and will have huge incomes. But to reach those heights, a company has to go through many stages, each more difficult than the previous one. One such important stage is funding from a Venture Capitalist firm. It is the firm time that a company is bequeathed a huge amount to fund their future plans so it is obvious that no will want to screw this up. So we bring you a list of things that you should keep in mind before deciding to approach a VC
SHIFTING YOUR BUSINESS
You might be a IT business that is running out of small city and the VC before investing I your company may ask you to shift to let say Bangalore which is the Indian hub in terms of start-ups. So you must be quick to decide or better, beforehand prepare yourself to approach this situation. You must understand the pros and cons of such a proposition before taking a call.
Almost half the people that runs a start-up have no prior experience. This doesn’t mean that they are incapable of running a company but it can put them on back foot when facing a VC who are very well bread in the entrepreneur environment. To gain some experience, you should hear some great businessmen who have already proved their metal and see what their views and how can you learn from them.
Your team is your most important asset. A great team that is ready to take any challenge head on is more like to succeed in a challenging work industry than a team that is not. You need to build such a core team very carefully. Money will follow if you have the right team. Also know the strengths and weaknesses of your team. That is something that will give you an advantage with the VC.
UNDERSTAND THE LANGUAGE
You should have an understanding about the language that is prevalent in the VC circles and start-ups. You might face an embarrassing situation when you are asked about your USP and you don’t know what USP is. (Google it if you don’t know)
Don’t send out your business plans to each and every VC you can on the internet. Instead research about the different VC and understand what niche they usually invest in and then approach the one that might be really interested in your idea.
MONEY IS NOT ALL
This goes beyond saying that money is important but can be even more important is the additional incentives that a VC can bring to your firm in form of networks, understanding and experience of the things you will be facing in the future.
ACCEPT THE FAILURE AND MOVE ON
It is not prophesized that you’ll get your funding in the very first or second meeting. It may be possible that you will get rejected even after 10s of meeting but don’t lose hope. As long as you believe in your idea, you will make it through.
It is important to understand that this is a make or break stage in your business. This is one step that separates you and your firm from greatness. You MUST NOT blow it.