The BizFilings blog covering business tips and trends.
A Few Tips to Attracting Venture Capital Investment
Published on Jan 27, 2011
Read 'A Few Tips to Attracting Venture Capital Investment' at 'Time to Start Up,' the small business blog by BizFilings.
Last year, venture capital investment grew by 19 percent nationwide, reaching a volume of $21.8 billion. This year, as investors acquire greater access to capital, small businesses and finance-hungry startups can expect this figure to jump even higher.
That being said, business owners and entrepreneurs forming a company need to begin preparing themselves for a wave of new venture capital opportunities, especially among companies with high growth aspirations.
Begin by organizing all financial, audit and investment data from the last few years or since the company was launched. Chances are by the time venture capitalists are able to request such information from your company, they will already be somewhat interested. But by having this data prepared in advance, time will be saved and investors will be duly impressed.
Additionally, business owners may need to cut back on excess spending, as VC's will want to see frugality and responsibility on the part of the owner.
"It may seem counter-intuitive that you have to reduce costs in order to bring on outside financing, but showing careful financial control - and maximum cash flow - can make your company more attractive to investors," writes Dan Lubeck in Inc. magazine.
"Ideally," he adds, "you should give yourself at least a year to prepare your company before you seek outside funding."