Are you seeking venture capital for your startup or to launch a new business or service? You need to take care so that you land the right venture capitalist firm to work with. As much as an investor will give you the amount you desire to set the ball rolling, you need to be careful so that you don’t end up losing more than you gain.
Today we look at the various tips that will help you end up with the perfect venture funding proposal that will not only give you the cash you want but be beneficial for the long term.
Work With a Partner that Shares Your Vision
This is one of the biggest steps you need to consider when seeking for venture capital investment services in Singapore. Remember, when raising venture capital it is not all about getting the check, but entering a business venture that might last ten years, or more. This is because the venture firm will demand and get a seat on your board of directors.
You owe it to your business vision and the future of the company that this investor that gets a seat on the board of directors not only shares the vision of your company for the long term but also helps you to succeed when the times get tough.
With this said, take time and talk to other companies that have worked with the firm before. Your aim should be to find out how the firm reacted when the times became lean.
Plan for the Long Term
The contract you enter into with the investor ought to be for the long term. Most of these investors want to be in for the long haul so that they reduce the chance of losing out on their investments. It is therefore imperative that you also come up with a plan for the long term. If your plan was for 5 years or less, you need to discard it and come up with a better business plan that focuses on 10 years or more.
Avoid Exit Valuations
Most businesses include an exit valuation when they write their proposals forgetting that they are working with experts in this field. You shouldn’t promise what you aren’t sure about, for example coming up with the projected value of the business at the time you decide to take it public might be a good idea, but are you sure you will go public?
You need to do realistic valuations that will not only help you make the right decisions but will also give the investor a realistic picture. The investor understands the industry very well and will find it ridiculous if you give a valuation that is less than or more than comparable companies.
You need to come up with the right aspirations and enumerate your accomplishments without exaggerations. Have a clear distinction between what you have achieved and what you hope to achieve in future. The reason behind this is that the venture capitalist can easily perform a background study and find the truth.
When you base your presentation on lies, you lose the trust of the investor. You end up destroying what could have turned out to be a fruitful working relationship with the investor.
Understanding Any Expected Challenges
Make sure you understand what kinds of challenges you stand to meet along the way. You need to share these challenges with the investor early enough so that you don’t end up losing on possible business.
You need to stay true to you and the business when you decide to make the presentation to the investor. Don’t exaggerate the statistics otherwise you might end up losing out on funding.