A few years ago, start-ups with any whiz-bang tech idea could court venture capitalists. Today, start-ups are hard pressed to find interested VCs. That's because VCs are proceeding with caution, either making investments in existing portfolio companies to ensure success, or looking very, very carefully at new investments to prevent getting burned.
Indeed, it's tough going these days to obtain venture capital, but it's not impossible. If you're a start-up with huge growth potential (think tens of millions in revenue here) or a fast-growth company already hitting the revenue mark, venture capitalists might be interested. Here Inc.com shares advice for finding and securing venture capital, including some back-to-basics information on your capital search, ways to target and court the appropriate VCs, and how to make your business plan and pitch irresistible.
Do You Need VC Money?
Evaluate your need for venture capital before you seek it.
- Show Me the Money
- You can look for money in all the wrong places. Or you can take our quiz.
- Capitalization Plan
- Thinking ahead about your capital requirements can better prepare you for finding the right amount of money when you need it.
More conservative investors and less cash make raising capital challenging.
- How do you raise money for a new business in tough times?
- There's still money out there. Here are suggestions on tapping investors in a tight market.
- How to Get Funding Now: Two VCs Weigh In
- Raising venture capital has never been easy, and it's getting harder. Two Inc.com mentors discuss how venture capitalists are evaluating potential investments in today's dwindling economy.
- Are You Ready to Get Funded?
- Determine how prepared you are to talk to investors about your company.
- More Strings Attached
- Today, even veteran CEOs are having a tough time raising funds, and what money they do raise comes with a lot of strings attached.
Finding a VC who's willing to talk to you can be challenging if you don't know whom to approach and if you don't have the right contacts.
- Targeting the Right Venture Capitalists
- Before you approach venture capitalists, make sure they even want to talk to you by discovering what types of businesses they invest in.
- The Fast Track to Face Time
- To attract venture capitalists' attention, get referrals.
- Capital Training
- Looking for funding? High-tech venture capitalists recommend keeping your business plan short, perfecting your "elevator pitch," and networking extensively.
- How Do I Get Investors to Read My Business Plan?
- An intermediary can help get investors to notice your plan.
Quick tips: keep it short, know your audience, and know your numbers.
- Pick the Target Audience, Then Tailor Your Plan
- It's a prime rule of business plan writing: focus, focus, focus. Author David Gumpert in How to Really Create a Successful Business Plan offers strategies on how to tailor a plan for your intended audience.
- Persuasive Projections
- Venture capitalists want to see your business's potential spelled out in numbers. Here are some dos and don'ts when putting together your business plan's financial projections.
- Finding the Perfect Pitch
- Watch three rookies gear up for the investor presentation of a lifetime.
- The Seven Habits of Highly Effective Presenters
- Making a verbal pitch to investors is very different from submitting a written business plan. Here are seven good practices gleaned from a venture-capital boot camp.
- Pitches We Love ... Or How not to Find Capital
- Learn from the confusing pitches one investor has received from small businesses looking for capital.
From community-based funds, to down rounds, companies are securing capital despite the poor economic climate.
- The Numbers Game
- How should you fund your growing company? Just ask the Inc 500 class of 2002.
- Capital: The Bucks in Your Backyard
- Community-development venture-capital funds serve geographic regions as well as lower-tech markets neglected by the traditional venture-capital industry.
- A Standout in Her Field
- Susan Davis pushes socially responsible business by drawing elite investors into her circle of networks.
- The Down-Round Dilemma
- Once CollabNet was the darling of VC firms. But in 2002, its CEO was trying to determine whether or not to seek new funding through a down round -- a stage of venture capital financing that results in a lower company valuation.
- The Match Game
- Need a million dollars or more? Thousands of new investment bankers can lend a hand. Just watch costs, and read the fine print.
Read these articles to learn about specific venture-capital resources.
- Directory of VC and Entrepreneurial Boot Camps
- We've compiled a list of boot camps and forums across the country where entrepreneurs interested in acquiring capital are learning to fine-tune business plans and refine pitches to potential investors.
- Help For Socially Responsible Businesses
- Finding capital for your socially-minded business won't be too hard, once you check these VCs out.
- For Women Mostly
- Here are a group of start-up resources and investment groups that focus on women-owned companies.