VC funds have the largest war chests with which to invest in seed and growth stage companies that offer a high rate of return. Moreover, VC investors bring the portfolio companies much more than capital. Following a VC-led round, the portfolio company generally ends up with one or more first-rate VC professionals on its Board of Directors, who are capable of providing high-quality financial and strategic advice, management oversight, valuable business contacts, and a pipeline to future financing capital. Typically, VC firms view themselves as entrepreneurs first and financiers second.
Before settling on working with a VC, speak with at least one chief executive in your industry who has raised money using a VC. Learning their experience will help you decide whether this route is for you. Venture capitalists are a tough crowd to reach as they are bombarded with business plans. Once you have decided a VC is the route for you, the first step is to research and identify an appropriate fund. VCs generally do not look at a plan submitted by anyone they do not already know, and the key is a personal introduction to a fund’s partner.
VCs expect a detailed and scrupulously accurate business plan. In addition to the basics, plans for VCS require special emphasis on the following three factors:
- Management team: intelligence, experience, temperament, entrepreneurial skills, technical training, R&D sophistication, and expertise in production, distribution, marketing, finance, and administration – as required by the particular venture
- Size and attractiveness of the market: dynamics, competition, barriers to entry
- Uniqueness of the venture: what some call the USP or unique selling proposition
If you are just starting out on the road to seek venture capital, you need to allow time in terms of preparation and accessing investors and you may need to pitch on several occasions before finding interest from investors. If you have immediate needs for finance, it is unlikely that equity finance is appropriate. As a guide, a minimum of eight weeks is needed from reaching agreement in principle to conclude all the due diligence and investment procedures, but this can vary tremendously according to the complexity of the deal and the degree of alignment between the investor(s) and the business. It is worth bearing in mind that it can take considerable time to reach an agreement in principle. From the first contact with interested investors to final investment, you could take three to six months.
At Azione, we can help you to find appropriate investors for your project. If you can convince us that your project is worthy of receiving venture funding, we can give you the opportunity to present your project to be visible to our network of investors. We only select companies that we feel have the best chance of raising finance.
If however, we think your proposition has real potential for receiving venture funding but you are not quite at the investment level yet, we will try to recommend someone from our extensive list of contacts that will be able to assist you to reach the investment readiness stage.
If on the other hand you are selected by Azione, we will invite you to put together a presentation which will be sent to every investor for consideration. We will offer you some tips and guidance for the presentation and only present it to our investors when we are sure that it meets their requirements.
Our investors are accredited institutional investors, with an interest in investing in start-up companies.