How to Find and Integrate Venture Capitalists into Your Business Plan
People often talk about having a million dollar idea. The general concept there is that an amazing idea can take one all the way to fame and fortune. That can be true in a certain sense. But like many things in life, theory is quite a bit different than practice. In reality even the best ideas probably aren’t going to get very far unless one has a lot of money to back it up. Phrases like “the rich get richer” and “you have to spend money to make money” might seem cliche at first. But they exist for good reason. The unfortunate reality is that big business requires big money to get started. At the same time though, people shouldn’t take this to mean that their dreams are impossible. There’s one important bridge between where one is now and where a million dollar dream exists. And that’s something called venture capitalists.
At the most basic level one can look at venture capitalists with a very strict definitions. They invest capital in a venture. Or to use somewhat plainer language, they give a potential business funding in hopes of receiving a larger return on that investment later on. It’s an ideal situation for both parties. If the business is successful than the investor will be able to make a fortune with, quite literally, almost no work at all. And the person starting the business will receive the very thing that’s most necessary to start out in a competitive marketplace. Unfortunately things aren’t quite that simple for either party. As stated by Jason Hope, “the investor needs some level of conviction in the viability of a company”. While, at the same time, the potential business owner needs to know which potential funders are likely to come on board without demanding too much control.
This leads in to the very first step in finding a venture capitalist. The most important thing to remember about a venture capitalist is that they’re not some faceless entity. This is probably the single most common and repeated mistake that people make when first starting out. It’s easy to assume that venture capitalists are faceless suits that will either agree or disagree based on objective numbers or sales pitches. And much of the advice given to people looking for help in that sector revolves around this misguided idea. But the reality is that venture capitalists are simply people. In fact, it’s quite common for venture capitalists to have actually once been in the same position as the person looking for help. And this one rule is something that will impact almost every other piece of advice about venture capitalists.