Business Money Matters: Winning Over Venture Capitalists

Business Money Matters: Winning Over Venture Capitalists
  • Opening Intro -

    Venture capitalists provide initial assistance to start up companies. Not just any company will do — these individuals are looking for early-stage, high potential companies with promising growth.


In exchange for assisting you, the venture capitalist will hold a stake in your business. The following are the steps you can take to win over venture capitalists.

Step No. 1: Understand the Market

Venture capitalists want to make money and plenty of it. Therefore, your business must align with what they are looking for.

For instance, if your business has a promise of providing an advanced medical breakthrough, then you need to work with a venture capitalist that funds your type of business. This means conducting research, typically by online search, where you pull up various names of venture capitalists and learn what types of businesses or initiatives they fund.

Never apply to venture capitalists in an unrelated field. You’re wasting your time and you are wasting their time.

Step No. 2: Develop a Corporate Statement

If you have not written a business plan at this point, you must do so right now. You cannot apply for capital unless you outline a plan of action for your business.

You should also develop a corporate statement or a mission statement that briefly highlights what you are about. You can do this by jotting down some ideas on paper and then choosing the three or four most important points to include in a statement. That statement should flow from you naturally much like an elevator pitch where you have perhaps 20 seconds to make your point.

Step No. 3: Make First Contact

Venture capitalists typically have websites where they thoroughly explain what they are looking for and other requirements. If you find a match or something very close to it, then plan to make first contact with the VC.

A VC’s preferred method of contact should be followed. For instance, If there is a web form that should be filled out, then go ahead and do that. Pay close attention to the instructions and proofread your statement before hitting the submit button. It is the little details that VCs often scrutinize when deciding whether they will work with you or not. If you come across as disorganized you may short-circuit the process, effectively eliminating yourself.

Step No. 4: Make an Appointment

If the VC responds favorably to your request, then make an appointment to present your idea. This also means gathering your facts and developing a presentation that will interest the VC.

Your presentation should get directly to the point and can be offered along with a handout, slides or a PowerPoint presentation. The VC may have a preferred way for you to present your ideas, Therefore, follow those instructions carefully.

Step No. 5: Attend Your Appointment

Plan on attending your VC presentation fully prepared. This means knowing in advance where you will go, what time you must be there and how best to get there. You must allow enough time to get there on time—that means building in some extra time in case of traffic or if an emergency arises.

Consider bringing with you at least one other executive who is or will be working with you. This person should be able to answer questions that you cannot answer or is better suited to answer. That means knowing when to defer to one of your people.

Step No. 6: Make Your Pitch

The VC is on hand knowing that you will ask for money. You should know in advance what your needs are and how much you plan to ask. The VC may already have an amount in mind, though most likely you won’t know what that figure is.

Even so, you should make your pitch based on your needs and those needs alone. Your request must be clear, interesting and convincing. Whether the VC chooses to partially or fully fund your operation, let alone offer his backing, will depend largely on the case you make.

Step No. 7: Field Questions

VCs will have questions about your business proposal. Some may interrupt your pitch and ask questions as you go along, While others may wait until you’re done. Regardless of the procedure, you must allow for questions and be prepared to supply answers.

That means you or one or more executives will field questions and provide answers. Your team should be prepared to answer all questions on the spot or find the answer out before the appointment is over.

VC Considerations

VCs are busy people. Your presentation may be just one of many that they will hear on any given day. You should value their time and get right to your point. When you are done with your presentation, then thank the VC for his or her time. You might also ask when their decision will be made. If you are extremely fortunate, you may get an instant and positive decision to fund your enterprise. Do not count on it, but be prepared nonetheless.

See AlsoBusiness Money and How to Get It


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Categories: Small Business

About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Matt's Musings", his personal blog. Matt covers campus, consumer, business and financial topics on various websites and blogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".