What It Takes to Attract Venture Capital

What It Takes to Attract Venture Capital
07 Mar

There is usually a certain time when an entrepreneur begins to wonder what it takes to attract venture capital. This is when they have reached the end of the financing line. Yet, there are some reasons why they might consider it first and not last.

When a person is starting to wonder what it takes to attract venture capital, they have usually exhausted the normal means of financing. The reason that venture capital has grown in this country some rapidly in the last 50 years has to do with the revolution in technology and the trend toward globalization. We know we need to stay on the cutting edge just to keep up with the rest of the world. Things are moving faster today.

The time when we throw people in prison for insisting the world is not flat is long gone. Today, we need to find them the financing to build a ship and go find out. We can not afford not to encourage technology. So, this is what it takes to attract venture capital; it takes an idea on the cutting edge. Why do you need venture capital when you have the idea for the better mousetrap? Well, because the banks are busy lending money to companies building the old ones. They are proven. They are safe. They won’t make a lot of profit, maybe, but they will make enough to repay the loans.

So, the banks are not going to finance your better mousetrap, and if you want to build it, you will need capital. The good idea is the first thing you need, but it is not the only thing you need. You need to have your idea clearly thought out. You need to know what it will take to build your mousetrap, and you must be able to prove to some very skeptical people that it is feasible. The presentation must be good. Venture capital firms are fond of the term, due diligence, and it means they are going to take a very, very close look at your idea.

The next thing you need to attract venture capital is a bit of humility. The venture capitalist is going to want some equity interest in your idea. The banks lend you money and go away and wait for you to repay them with interest. The venture capital firm gives you the money and makes sure you make the better mousetrap and sell as many as possible. If you were experienced in how to produce and market a product and how to lead an emerging company form start-up to profitability, you would be a venture capitalist or angel investor. If you are willing to accept what they can give you, that is one of the ways to attract them.

Venture Capital

Yet, in the end, nothing is more important than having a well thought out plan that represents a major advance in some cutting edge technological field. You must have the ability to present it and prove its viability to some pretty sharp and demanding people. This is what attracts venture capital. If you have this, you should be looking at venture capital firms already. If your idea was so commonplace that you thought the banks would finance you, you most likely would not attract venture capital anyway.learn more updates at

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