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Thread: Venture Capital

  1. #1
    Join Date
    Nov 2006

    Venture Capital

    I am at a point now where I am about to seek out investors. I was wondering if anybody was familiar with venture capital type funding??

    If so, I am exploring it and was hoping to receive more information regarding the concept. My business is making more and more money each month but if I could get a source of funding it could really push it over the edge.


  2. #2
    Join Date
    Feb 2005
    What is your business?

    VC's are looking to invest in businesses that will be making $50+ million in revenue after X years. They want companies that will either go public or hold some kind of value in terms of potential to be bought out at some point and leave them with a nice return on their investment.

    Most people who go looking for VC funding really aren't suited for it. I think there's something like 4,000 businesses every year funded by VC's.

    Discouraging things aside, there are other options, assuming your business isn't actually something they fund.

    1) As Guy Kawasaki says, the three F's - Friends, Family, and Fools. This isn't a bad place to get an investment at all.
    2) Banks - they want less risky returns, and will want something as collateral.

    I have to ask - what kind of business is this?

    If you meet a VC, two of the important parts are going to be what problem your business is solving and the team behind it.

    If you give us some information on yourself (age, background, past experience, schooling, etc.) and your business, I can recommend some books and what to consider. Tell us about who else is involved (no specific names needed on an open forum, but their experience, age, etc. is valuable) and what kind of competitive advantages your business has.

    If you want to discuss this in private, send me a message on here and we can arrange a phone call or exchange email addresses or something. I haven't gone through the entire process myself, but work on a few teams where funding was already set aside for us.. I've also done some reading and so I have an idea as to how the game works. I'll recommend those books once you give us an idea what kind of business this is

    By the way, congrats on your business doing well, but just remember, work smart, not hard. (Doesn't mean to be lazy, and once you've been through the process, you'll know what I'm talking about)
    Last edited by Peltier; 01-18-2008 at 09:30 PM.

  3. #3
    Join Date
    Nov 2006
    Hey thanks for the well thought out response.

    From what you have spelled out and from what I have been able to read in the last few hours has really convinced me that VC funding is not what I am after. I am still looking into investors at some level other than running to the bank. A bank may be the safest bet but sounds boring.

    My business is very simple and is filed as an LLC. We do not have a lot of assets and there are only 2 owners. All those who work for us are contracted out and not employed. We have very little overhead.

    We primarily run online entities such as communities, magazines, do affiliate marketing, and act as a media source for our industry. We have been looked at numerous times by large companies in the industry and we have landed one nice deal with an industry leader that has made my head swell.

    The issue I am having right now is that we have a lot of industry leaders checking us out but I don't feel I am getting enough interaction with them. In other words.... I feel we should be making more money from what we currently have going. Secondly, I can see MANY smart moves I could make that would benefit our company in the long run but these moves are small investments. It would give us more assets and more revenue.

    The old saying goes... it takes money to make money... and this really is a prime example of that. At times I am stuck because I don't have the funds I need in order to grow properly.

    I started this business with nothing and have never borrowed money. I have many services that I could provide for my industry and I have a lot of connections through the people I work with directly every day. There are times we need to invest in simple things to allow us to grow but have had to hold off to make more money before proceeding forward.

    I am 32 years old and my niche is Hunting, Fishing, and the Outdoors. We are strongest in the hunting industry.

    I simply feel that if I could find some source of funding or a way for other businesses to invest in what I am doing, I am confident enough to believe that this money would be well spent that I could pay it back over a 3 year period for instance.

    The key would be to show with substantial evidence that I have a well planned out mission and what it is I would spend my money on specifically.


  4. #4
    Join Date
    Feb 2003
    Generally with VC funding you're giving up a *large* portion of the company to someone else; that could cause the company to have to make decisions in a different way, perhaps even incur more overhead.

    A simple bank loan works well, but you should have a plan to pay it back and stick to it. Benefit here is that (as long as you pay your loan) nobody has a direct influence/stake/control in your company.

  5. #5
    Join Date
    Apr 2003
    Kansas City, Missouri
    Rem, Have you checked out a local Small Business Development Center? Usally hooked up with a community college or school. They may have some answers for you. Also local chambers of commerce may have names of folks that want to invest local.

    Some of the specific ways the SBDC can help your business include:

    Small Business Management

    # Develop a strategic plan
    # Provide professional business analysis
    # Develop a human resources plan
    # Marketing Strategies

    Market Research and Analysis

    # Identify target market segments
    # Tap sources that can provide customer lists, site analysis, and demographic and competitor information

    Financial Analysis

    # Analyze and prepare projections of your cash flow requirements
    # Take a financial inventory to determine growth potential and capital needs
    # Explore financing options and assist in developing financial plans for banks and investors

    ALSO, check out

    The Kauffman Foundation is working to further understand the phenomenon of entrepreneurship, to advance entrepreneurship education and training efforts, to promote entrepreneurship-friendly policies, and to better facilitate the commercialization of new technologies by entrepreneurs and others which have great promise for improving the economic welfare of our nation.

    Access to Capital and Markets

    The Kauffman Foundation has created a network of angel investors, trained future venture capitalists and future company leaders, and studied the history of investments in minority-owned enterprises.

    Good Luck and keep us posted.

    Last edited by infoZine; 01-19-2008 at 11:03 AM.
    Richard Greene

  6. #6
    Join Date
    Jul 2017
    Surfers Paradise, Queensland, Australia
    What are the advantages of a Venture Capital?

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