Many first-time entrepreneurs don’t have access to capital markets and will need to seek outside funding in the form of venture capital, a source of finance provided by wealthy investors who see a lot of potential in the business idea.
It’s a scenario akin to that which we see on Dragon’s Den, although without the made-for-TV bickering between investors.
This infographic from All Finance Tax outlines how the venture capital process works, the qualities that a VC-seeking entrepreneur should demonstrate and the most common mistakes that entrepreneurs make when approaching venture capitalists.
While approaching hard-nosed venture capitalists in an attempt to persuade them to invest in your fledgling business can be nerve-wracking, you’ll need to exude self-belief when making that all-important pitch.
If they see an entrepreneur who is nervous and uncertain, they won’t want to invest in them. Self-confidence is ideal; arrogance is not.
Be assertive, certainly, but also be willing to take on board the advice of venture capitalists. They’re seasoned veterans in the business game and you’re a hopeful entrepreneur who hasn’t even set foot on the bottom rung of the ladder.
Essentially, if you’re a self-assured yet humble business owner who has a clear, structured idea of where you expect the company to be in the distant future as well as the short-term, and if there’s a sense of chemistry between you and the venture capitalist(s), you stand a great chance of receiving investment.
Take a look at the infographic below to find out plenty more about venture capital so that you will be well prepared for a prospective meeting with venture capitalists if you’re hoping to secure this precious source of funding.