W.T.H. is Venture Capital

We’re here with the second part of “fundraising for entrepreneurs”.

So far, we’ve understood that seed investment is the very first round of investment for any business. It basically represents an “I believe in your business” gesture, whose proceeds are used to develop plans to take to more sophisticated funding sources. One such sophisticated source is called venture capital funding.

WHAT

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A venture refers to a risky undertaking. A capitalist refers to an investor who wants to make profit. Put the two together and you have a venture capitalist, an investor who wants to capitalise on the high risk - high growth potential of a venture with the expectation of earning huge profits.

VC funding can come from a single / group of investors or a firm that pools money of high net worth individuals.

HOW?

Approaching a professional financial player such as a VC can get intimidating. Here’s a guideline on how to go about it:

  1. PITCH - Your business idea is your USP. A simple and effective AF pitch deck (which is a brief presentation on your business plan, created using Powerpoint, Keynote or Prezi)
  2. RESEARCH- Find and shortlist a list of VCs based on which industry they invest in and how much funds they invest.  For starters, you can have a look at the members of the the Indian Private Equity and Venture Capital Association (IVCA) (https://www.ivca.in/members_firm.php)

  3. NETWORK - Instead of cold emailing, use platforms such as LinkedIn to see if you have any second- or third-degree connections with people who work at VC firms. Ask fellow founders or your personal / professional network if they can introduce you to anyone in the VC industry

  4. Connect, pitch, follow up and close the deal

WHY?

Apart from bringing in the money, VCs come with a plethora of business acumen, experience and expertise. They serve as a support system and insight well for decision making and strategizing. VCs also have a lot of connections and can help your venture with operationalizing plans.

Stay tuned for the next part boss ladies!

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