Getting funding is one of the most difficult challenges startups face when forming a business venture. To overcome this, the concept of venture capital investment came into existence. These days, the concept is becoming an increasing trend which is being fueled by a number of factors, such as improvement in the IPO market, promising new technologies, favorable government policies and abundant entrepreneurial talents. Venture investors are helping startups a great deal in launching and developing new technologies and business concepts.
In this article, you will discover some useful concepts and ideas about how to attract venture investors. If you are struggling in your initial phase of business due to a shortage of money then this article is going to help you. Ideas Should Be Unique and Hot
The best way to attract venture investors or venture capitalists is to have hot and great ideas. Think of a new and exciting concept that may add value to existing services or products. With a hot idea in place you can attract potential venture capitalists to invest in your venture or idea. For example, in the late 80s when the computer became a tool for household use, people started thinking how to use the computer interface to replace traditional modes of marketing and the idea took off.
Now, most of the traditional modes of marketing are almost dead and everything has become digitized. So, in the late 80s, investing on this concept was a good deal.
The world is poised to witness the next trend and that is marketing brands through handheld devices like smart-phones and mobiles. Making marketing possible through mobiles can be a hot idea over next decade. So, any idea with this concept in mind could be a win-win situation for both parties.
Ensure the Viability of Your Venture
Another important thing which startups should focus on is to ensure that their idea is viable. Does it have the potential to be reduced into practice? Unless you can reduce it to practice, it is useless. You should ask yourself whether your idea is more than simply a misguided dream. If this is the case then nobody is going to invest in plans which are not practical . Small startup companies should think a lot on this.
Ensure the Profitability of Your Venture
Money has always been a motivating factor in every sphere of life. The same is the case with new ventures and businesses. Profit and growth are the reasons why we are doing all these exercises. If investors are not going to get the best return for their money out of your plan then they may bypass your concept and plan right away. So, startups should consider and ensure the profitability of the venture right at the beginning and convince investors about the handsome return. For this reason, it is essential for any entrepreneur seeking venture capital to make sure that the core viability of their business is sound and has some growth potential.
Build a Smart Team
Human resource is one of the key features to get maximum return out of your business. A hot idea with a poorly talented and inefficient workforce may just be a waste. It is important for every business to build a team of efficient and skilled professionals who can add to the business plan. Investors enquire a lot about the team who will be working on their plans. They are reluctant to invest money in a plan accompanied by an inefficient and unskilled work force, even if your idea is great. Thus, when garnishing your business plan to attract venture capitalists, it is very important to include an efficient team.
Build an Effective Network
Building a network is one of the most effective and essential tools for conversion and new clients and the same tool can be utilized to attract Capital Investors. Just as you are looking for people who can invest in your venture, the same is the case with investors who are looking for ideas to invest in . There are many people who have money, but they don’t have ideas in which to invest their money. They too are continuously looking for people who have great ideas so that they can multiply their existing amount. Thus, businesses need to network. Good and efficient networking enables you to reach potential investors.
Networking with Social Media
Networking can be done online as well. Offline exercises which help in building an efficient network are meeting the potential customers physically and convincing them of the profitability of the products that you offer. Attending seminars and events and delivering your thoughts as a speaker is another effective method through which you can build up your network. However, there are many online networking sites available which can be utilized to tap new investors. This includes Linkedin which has lots of features and tools which enable professionals to reach investors.
Hence, we can say that venture capital investments provide your budding business with the resources it needs to grow to its full potential. It may be a tough task to achieve, but with planning you can attract investors and can garnish your business plan. Garnishing your business plan to attract venture capitalist becomes even more accessible if you were to purchase new machinery, or develop a technology with well planned research.
