How to Select a Venture Capital Firm

By Christine Richardson

Not all of the VC firms are equal. They stand in contrast with each other. When looking for a VC capital investment, you ought to constrict your search to firms with the greatest interest in you.

Fund Size. More likely than not, your company will require additional equity capital in the future. If a venture capitalist has a large fund available, they are very likely to be interested in making further investments in the future. Follow-on rounds can be much easier if you simply use the same investors.

Location. As with angel investors, VCs love to invest close to their actual location. That permits more dealings between the investee and the investor. Managing this interaction is better without worrying about geographical problems/time zone dilemmas. VCs like to stay inside their 100-mile radius.

Other Investments. What other corporations has the VC stuck money into? It goes in your favor if any portfolio has additional companies in the same fields. Frequently, they establish a network that's helpful to all. You might be on the same page with said companies. VCs will be more attracted to these firms.

VC Firm Leadership. Remember, venture capital firms are made of people. These people all have specific expertise in slightly different areas, and they seek investments in industries with which they are familiar. If you choose the right firm with the right partners in leadership, they will support the growth and development of your startup with knowledge and expertise.

Stages? VC firms are typically choosy about investing in selective stages of a corporation's growth. Some are in love with providing seed capital, but others are dedicated to corporations with an existing network in place. Get a firm that puts money into corporations such as yours.

Industry. This is part of the most significant aspects in picking investors. It likely will make no sense to talk to medical equipment investors to put money into an enterprise software corporation. Although your company might be a swell performer, VCs will likely not invest in you.

If you spend a little bit of time screening venture capitalists before contacting them, you'll save yourself some time and effort, and increase your chances of successful funding.

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