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How To Succeed At Raising Venture Capital

How To Succeed At Raising Venture Capital

by Guest AuthorDecember 3, 2015

Everyday entrepreneurs enter the marketplace with novel ideas and products that are meant to revolutionise the way in which things are done. Whether it is a physical product or intellectual property that goes beyond what is currently on the market, nothing would get very far without operating capital, especially in the very beginning. If you are an entrepreneur seeking funding for your venture, there are some things you should know prior to seeking venture capital from financial backers. Here are some thoughts to help you succeed at raising venture capital to fund your startup.

Incorporation of Your Company a Must

Long before seeking financial backing, venture capital, it is vital to legally incorporate your company. This particular ‘step’ in raising venture capital is important on a number of levels. First of all, no venture capitalist is going to place money into a fly-by-night project that may never see the light of day. Show potential investors that you intend to be around for the long haul by developing a brand and registering your company to do business in the UK or abroad as the case may be. Forming a corporation implies intent to establish yourself firmly in the marketplace and this, of course, is crucial to investors.

An Idea Is Not Enough – Give Potential Investors Something Tangible

After you’ve registered your business to trade, it is now important to develop at least one working prototype of your product. Yes, it is possible to pitch and successfully sell ideas but you will get much farther and more investment capital if you can demonstrate a working model of your products. Investors want to know that they will be getting back more than what they’ve put into a fledgling business and a prototype will help them better understand what it is they are investing in.

Prove Your Product Can Be Sold

Taking this concept of a working prototype one step further, you may want to actually manufacture a small batch to prove that it can be sold. The two best ways to begin selling a new product line is to weigh in heavily on a marketing budget for online strategies or by taking your new products directly where you will likely find the most customers. Companies like the Finesse Group can design appealing exhibition stands so that you can stand out from the competition at live events. The idea is to have an initial customer base to authenticate your product’s ability to be sold. Remember, that 90% of sales is in demonstration and presentation, so make sure to put your best foot forward when bringing your product and/or brand to market.

The bottom line when raising venture capital is to have the proper credentials registering you to do business and a sound business plan that maps your road to success. Show that your product has potential to sell when brought to a larger market such as live marketing events and of course, give investors something tangible they can see, touch and work with. If you have any hope of raising venture capital from investors, you need to be able to show them a potential for profit on their investment. These steps can put you well on your way to raising the money you need to expand, so follow them closely and you will see that raising money is not only possible, but probable as well.

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