Venture Capital Funding

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Venture Capital Funding

When you decide that you want to own a franchise, the first thing you have to do is get some money so that you can buy it. This involves going to see a venture capital specialist and convincing them that you have a great idea and that they should invest in you. So, there are a few steps that you should take before you even go to the venture capitalist.

Finding a Venture Capitalist

First thing you will need to do is draw up an idea. Take your time and make certain that everything looks great. You’ll want to sit down and say to yourself, ‘If I was this person, have I made an convincing enough argument to want to give this person the money they need?’

The next thing you’ll need to do is to put together a detailed business plan. You want to show the venture capitalist that you have done your research and you know what the risks are. You will want to show the information regarding your competitors, how you are going to grow the business, and even though you may not be comfortable with it, show the unfavourable as well as favourable projections about it. You may think that this is going to turn them off, but if you present it to them in an honest way, you don’t have to worry about the possibility of the venture capitalist thinking things are going to be worse than they really will be.

You will want your plan to show the venture capitalist that there is an expanding market for your business and that you have protected it against the competitors. Some examples would be copyrights or a patent that you hold for your product. Make certain that you make a point to show that you are planning to make the business more robust as your franchise succeeds.

Another thing to remember is that you don’t want to choose the first venture capitalist that you come across. Do some research to find out what venture capitalist firm will be the one that will best suit your needs. There are different venture capitalist firms that deal with different types of ventures. You want to make certain that you are going to go to one that is right for you. After you talk to them, it doesn’t hurt to do a background check on them, or to take up the references that they might offer you. If they are trustworthy, they won’t have a problem with it.

When you are approaching a venture capitalist, one thing that is always a good idea is to make your first contact with the venture capitalist a professional one. Those who make a professional contact rather than calling the person on the phone, sending an email that is unsolicited with your business plan, or walking in off the street have a better chance of succeeding. The best case scenario is if you have a connection that can contact the venture capitalist for you, but if not you can use the Internet to make a connection with someone who might help. Remember, you are asking the venture capitalist to invest their money in you. You want to present yourself as professional as possible.

Something that you will need to do is know your product very well. Be prepared for any questions that they might have and anticipate what their questions will be before you sit down and talk with them. You don’t want to find yourself unprepared because if you don’t look as though you know what you’re talking about, your chances of being approved will be reduced.

When you are rejected, don’t get discouraged. You are going to hear the word no a lot, so be prepared for that. It doesn’t mean that your idea is a bad one, it simply means that you are going to have to work harder to find someone who will work with you. Don’t give up and don’t get discouraged. It’s easy to say, but take your time and you will find one that will work with you.

The following are a concise list of tips to remember when you are trying to set up venture capital.

  • Be professional – You are going to people to ask them to invest in you. You want to show them that you are serious about your business and that you won’t give up when the going gets tough. This will be, above all else, a business proposition.
  • Show that you know what you are talking about – When you are talking to a possible investor, you want to show them that you know your product, know the industry, and are confident with what you believe you can do. The last person that someone wants to invest in is one that doesn’t know what they are talking about, who flounders when asked questions, and who doesn’t believe in what they are doing.
  • Show that you are serious about your business – It’s a good idea to attend seminars and discussion panels whenever you can. Not only will this show that you are serious about your business, but it is also a great way to make connections. The more you show that you are interested in bettering yourself and your business, the better chance you will have at attracting positive attention and having people who are interested investing in you and your business.
  • Perfect your business plan – Workshops are a great place to go to find out how you can make your pitch and your plan something that will make investors stand up and take notice. The more time that you invest in your company and yourself, the more people will see how serious you are about what you are doing. Use the Internet to find programs and workshops that you can attend in your area. You will find that this is time and money well spent, as you are investing in your future and the future of your company.
  • Prepare yourself – If you have someone that is interested in possibly investing in your company, the real work has just begun. You will find yourself and your company being scrutinized and looked at from all possible angles. You may find yourself having to attend meetings and answering the same questions over and over again. Although it may be tedious, it’s extremely important and it will help you in the long run.

It’s important to remember that there is a lot of hard work that must be put into a business, not only when it comes to finding investors but also doing everything that you can to make certain that your business has the best start that it can get.

Think of your business like a baby. A baby isn’t going to grow by itself. You have to feed it, you have to nurture it, and you have to invest time in it. When the baby is learning, so are you. You are learning together, and the business is your baby.

Things like seminars, workshops and discussion panels can help you to learn, and by that process you help your business to grow. Be patient when it comes to getting someone to invest in your business, because it can be a slow process and it could be months before you find someone that will invest in it. When you get rejections, think about why that person may have rejected you and then see what you can do to make a change so that you don’t get rejected next time. The time investments that you make in your business will pay off, and you will find that the more time you put into your business, the more interested people will be.

Take the time to make your business work for you. It’s a learning process and you will find that the more time you invest the better off you and your business will be. A business doesn’t just need to have money invested in it, it also requires time. Time doesn’t seem like a very important element, but if you want to be a good franchisee, you’ll make certain that you find out all you can about the franchise. And of course you will need to spend time at the franchise, otherwise you will find that there are a lot of problems that may be hard to overcome.

So devote time to your business and you will reap the benefits.

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