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10 Ways to Improve Your Chances of Raising Venture Capital

Published: 12/14/2006 6:08:45 PM
(Previous post - #1 in a series)

As part of an ongoing series of the Top 10 Ways to Improve Your Chances of Raising Venture Capital, I’ll jump into number 2:
 
#2: Put your best foot forward. 

Don’t send an executive summary that is more than 6 months old. We all know it can take time to obtain funding. It’s not surprising to see the funding process take 4-6 months in a normal situation. Since a lot can change in the marketplace in 6 months, most investors are going to notice the old dates on exec summaries or business plans, or that the information appears to be out of date. Remember, investors are focused on finding the inconsistencies or mistakes. Don’t make an obvious one. 

Not turning off “track changes” in MS Word; not spell checking your documents. One of the first “tests” of an early stage team, which is usually only 2 or 3 people, is whether they can work together closely to create a document that makes sense and presents well. If you can’t do that with a few documents, how can you expect an investor to think you’re going to do that with his money with your company?
 
Insisting on showing a flaky demo and hoping for the best. Some entrepreneurs think that it’s really their idea that counts, or their enthusiasm/salesmanship, or that the investor is lucky to be given the opportunity to invest. Sophisticated and successful investors usually see quite a lot of deals, have many to choose from, and tend to be very picky - otherwise they wouldn’t be successful investors! Your demo is the main introduction to you and your company. The demo doesn’t have to be fancy or the coolest thing, it just has to clearly communicate your vision for the company. Sloppiness in this area indicates either fuzzy thinking or poor organization.
 
Being late to your meeting (blaming it on traffic, etc.) It shows poor planning to an investor if you’re late. A typical investor sees very little information about your company before making an initial judgement. If you can’t get to an important meeting with the investor on time, what is he to think you’ll do when arriving at an important meeting with that first marquee customer you’re going to sell?
 
The bottom line with all of these cautions is that you need to show your investors your ability to deal with the details of the process as well as the grand vision if you want them to take you and your company seriously.
 
Don Jones
 
VentureDeal

 

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Don Jones
CEO, VentureDeal

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