Venture capital financing has grown tremendously to augment traditional financing models. Venture capital or VC as is famously abbreviated entails the injection of funds into a potential business, mostly a start-up, with a view of upscaling the business. In the fullness of time, venture investors cash in their capital when the business has achieved exponential growth.
There are no hard rules for winning investors’ hearts. Most financing is won on a case by case basis. However, there are factors a start-up founder can overlook and end up losing the opportunity. In this article, read several tips on increasing your chances of venture capital funding.
Innovation and Unique Business Idea
To secure venture capital, the business idea has to be uniquely innovative. Venture capitalists would not be won over by a business as usual approach. They need an idea that will break new grounds in the marketplace. An idea that will bring a radical change like Internet vikings SEO hosting multiple ips in how things are done. The first checklist in your startup is, therefore, to assess whether whatever you want to do has been tried before. If yes, then you will likely not get funding.
Potential for Growth
Venture capital investors are in the business of making money. It is never free money or philanthropy. This means that your business has to exhibit untapped potential that will propel it to growth in not so distant future. Venture investors do not want to remain in the business forever; they prefer investing and cashing in their stake like in the venture. Your business must, therefore, demonstrate the potential for growth in the short to medium term.
Solving a Problem
To increase your chance of funding, your idea has to demonstrate that it is solving a particular intractable problem in society. You need to ask yourself what problem your business is solving.