Every small company or business looks up to investors for capital. This is especially true for startups. Stories about Silicon Valley investors offering small businesses millions of dollars over coffee are common. Such stories often seem too good a deal to believe, but they are true. To get such a big deal, you need to make your business stand out. Below are four steps to get the attention of any venture capitalist:
1. Seek a venture partner, not a firm
When you are looking for venture capital for your small business, identify potential venture partners. Don’t just target firms or companies as a whole. A partner can be different from their firm when it comes to interests, capabilities, operational experiences and temperament. One way to find a reliable venture partner is to speak with startup CEOs that have had recent success in raising funds. Their experience can provide invaluable insight into the venture capital industry. Thousands of startups receive venture capital each year, with $130 billion in financing being realized in 2018 alone.
2. Approach a venture partner and be open
After identifying potential venture partners, look up their cyber presence and find out as much as you can about them. Follow them on social media and even subscribe to blogs run by them. Once you are satisfied by their online presence, send a private message with a link that is relevant to their business. Be authentic and moderate in your approach. To get their attention, determine what you can do to help them. If your potential venture capitalist has an investment portfolio that is related to your business, your proposition may be relevant to their portfolio.
3. Seek meaningful referrals
Fundraising books often tell entrepreneurs to get referrals from lawyers and accountants. But referrals are more important. The best referrals come from people who are not trying to reap from your success. Referrals from top-level executives in the portfolio from a venture capitalist are usually effective. To get an introduction from a top investor, you must garner enough patience and plan well.
4. Have a preview meeting and organize a follow-up
A good technique to use when you want to get investment capital is not to ask for funds initially. Let your ideal venture capitalist know you want to give a preview of your venture. Approach them with the intention to get their advice. The purpose of a single preview meeting is to let the partner know your venture’s background and your goals. Also, this meeting allows you to get free advice. In the process, you might just stir the investor’s interest. After your meeting, have a follow-up email with the venture partner updating them on what you have accomplished since the meeting. This is eye candy to them and it shows them that your business can execute its goals.
You can indeed do many things to capture the attention of a good venture capitalist. The goal of any startup should be to create a good story. Startups with a good background story always win the hearts of investors. Be sure to highlight the story of your company and you will attract the eye of ideal venture capitalists.
