While it may seem logical to pursue the path of raising money and courting venture capitalists, it pays to spend some time assessing if this is the right step for your startup or whether it would be better to abstain. There is no one-size-fits-all approach to raise venture capital, and so, you’ll need to analyze your own particular needs before you proceed.
The issue of timing is also vital, as it may be the best possible pursuit not now but at a time further on down the road. There is no doubt that the infusion of funds from a financial partner will radically change your trajectory, and here are some ways to discern if this will help you realize your objectives.
Do You Want To Share Control?
The first step to raise venture capital is to evaluate how your company is run and who makes the executive decisions. It may behoove you to remain independent if you feel that it would be detrimental to your company to have less of a say on what goes on. Keep in mind that you can negotiate the degree of power you cede to your potential partners.
If, on the other hand, you do not fear having a board with new members on it and feel this may contribute to the overall wellbeing of your startup, you can experience the added benefits of having a professional to help you navigate uncharted waters.
Consider The Industry You Are In
It needs to be said that not all businesses are equal in terms of their overhead and their earning potential. Review the particulars that govern the marketplace in which you seek to excel to determine how much money it will take to get your vision off the ground.
Companies who wish to break into the biotech world, for example, will need a great deal of financing to accomplish their goals. You may do well to use your revenue to build your firm little by little in a more natural way if your firm is smaller and its costs are low.
Are You Poised To Carefully Manage Your Windfall?
The prospect of receiving a large sum is no doubt exciting. It means you may be able to fast track ideas and plans and that you can get to work making your dreams a reality. Just like with anything, the things you obtain will require careful attention and maintenance.
Do you have personnel who are ready and capable of meticulously tracking where your newfound investments are spent, and if not, are you amenable to finding someone who can do this? In addition to accounting, you will need to determine who will sign off on purchases, and it is vital to create a method whereby you can determine what to proceed with and what to skip.
Do You Require Networking?
If you’re the new kid on the block in a field that requires strong connections, the relationship with a venture firm can open up a world of opportunities that can allow you to meet people in related occupations who can be of service to you. This is essential in helping you raise venture capital.
Getting your foot in the door early and establishing mutually beneficial relationships can make the difference between enjoying greater or lesser success down the road, depending on the avenues needed to break into your particular section of the marketplace.
Fidelman & Co. exists to walk alongside you, as you prepare materials with which to court investors and financial institutions. We can also use our specialized expertise to provide you with valuable insight in the areas of financial consulting, and in the crafting of superior management strategies. We invite you to contact us with any questions you may have, and we look forward to serving your needs.
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