We have always told our clients that capital raising is a form of marketing, like any business, your journey to raise capital should be regarded as a marketing activity.
First is leads generation process: Generating leads ‘” finding private equity firms and venture capital firms ‘” this includes using capital providers databases for instance, which contains thousands of private equity and venture capital providers around the world. Use existing databases available instead of spending your time in finding leads. Also, if you can, minimize your time in contacting prospective investors; as this is a very time-consuming exercise, you should focus your time in negotiating with possible “hot” leads.
Second is prepare for your “Sales Pitch ” ‘” why should venture capital providers look at your business. Have you conducted competitors analysis that maybe your business is just the same as others? Create your unique selling points ‘” so that you can convince the private equity and venture capital providers about it.
Third ‘” Polish Your Executive Summary ‘” create a 3-5 pager summary about your business, and use that as a document to approach private equity and venture capital providers. Some capital providers like to see the whole business plan, but usually start off with the executive summary.
Fourth ‘” It’s all about YOU! Not Your Broker – You are the best sales person for your business, not the corporate advisors.
Have you seen comments that says no intermediaries please? Private equity and venture capital providers are not really interested in talking to corporate advisors at the end of the day, they are interested in talking to YOU!
Fifth ‘” Always go for international markets, your ideas may not be applicable in your local market but in international markets.
In addition, put down your global marketing plan in your business plan, if you have an international plan, you can always have a much better chance in raising capital from venture capital firms. They like global investment ideas, not just a corner shop.
Sixth ‘” Prepare marketing materials ‘” upgrade your website, change them to more investment grade websites, add more contents to your website and implement more marketing activities especially web marketing activities.
These will all impress prospective private equity and venture capital providers.
Seventh ‘” Prepare for interviews ‘” interview with private equity and venture capital firms is not an easy process. I have been through 20 of them myself, both from investor and capital seeker’s perspective.
If you have not been through them, I can tell you right now that they are much harder than job interview.
Some innovative people tend to be conservative, or tend to talk too much technical terms; these are not suitable for private equity and venture capital firms.
Remember, you are asking for money from them ‘” they care about the returns they can make; and there is nothing more difficult in this world than asking for someone to give their money to you, right?
See the following articles on the Frequently Asked Questions for VC Investors in the first 10 Minutes.
Check out various databases available from ResearchWhitePaper on different types of capital providers guide by region and by their industry.