O.K. Just Kidding, You'll have to put some work into it!
"Great things are not done by impulse, but by a series of small things brought together." Vincent Van Gogh
When you come up a new business idea and start assembling a team to bring your idea to market, inevitably you're going to have to consider ways to finance it. Depending on how large of a business you want to start and the type of business you want to start will determine the type of financing that you seek.
Many entrepreneurs will start out by bootstrapping the operation using their own money or seeking a Small Business Administration Loan. Others will seek investments from Venture Capital and Angel Investor groups. What do you need to get the loan and what do these Investors look for before they invest with you?
The Small Business Loan Administration will look for :
- A good credit history
- Collateral
- a good team or a potential owner with a good tract record for managing or working in the given field
Venture Capital Groups and Investment Angels will look for rapid growth and a high return on their investment. Venture Capital groups will look for early stage companies and base their investments not on past performance so much as what the future potential is for the company. The Venture Capital Group will invest in the company for shares of the company and expect their return when the Company goes public. Venture Groups will often provide business expertise for the entrepreneur as well if it's needed. The Venture Group is adept at spotting trends and evaluating novel technologies with the potential for rapid and high return. They generally will look for investments in the Biotechnology and the IT fields
Angel Investors are Private Investors who will generally invest any where between $10,000 to $40,000 for a share of the business. They will provide expertise in given areas and like to invest in businesses that are not always but usually with in proximity to where they live.
How do you pitch to the Venture Groups?
Short and sweet!
Your pitch to Venture groups and Investors should be a quick overview of your business plan. Try to get the pitch down to two minutes! I know that sounds difficult but, Venture Capitalists are busy people and have a knack for knowing if something is going to work or not. Be passionate about what you say and make it worth their while. Find a hook to get their attention and then keep it. If your Idea has the potential of making a butt load of money you'll have their attention!
Out the door you want to tell them:
- What your company does
- Who your management team is
- Who your competition is
- How are you going to penetrate the market?
As always good luck with everything that you choose to do in life. Give it your all and make it happen!
The picture is one of my favorites! It's of Kee'e Beach and The Pali Coast in Hawaii
