Today's Top TipOnline business plan scams are alive and doing very well. There's even a new wrinkle: the "crowd funding". Trust me, no one makes money but the promoters in this scheme.
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The term VENTURE CAPITAL seems swallowed up in mystique. The people you meet are not just investors like those who dabble in the stock market. No, these are the investors who hold the key to the future for many companies. And that is what makes them scarry.
Sadly, no more than 2% to 5% of the companies looking for venture capital actually get it. And that is what makes venture capitalists even scarier.
But that small percentage -- that 2% to 5% -- knows something that the other don't. The successfully funded companies know how to position their companies, and how to present them, and how to capture the venture capitalist's attention.
What's that? You think there is no venture money out there? Think again. There are literally billions of dollars sitting in venture capital coffers, just waiting for the right project to come along.
Would you like some of those billions of dollars for you own? Yeah, me too. Let's take a look at what the successful companies do.
Successfully funded companies have a lot of tools in their briefcases. Probably one of the most important is knowing about POSITIONING. "Positioning" means placing the company in a successful industry, especially one that the venture capitalist knows well. For instance, being a chip manufacturer is probably a pretty good business, but being a chip manufacturer in the defense industry in a emerging technology niche is a whopping good business. Being a successful retailer is a strong recommendation; having a chain of ten successful stores is a very strong recommendation.
It is that "whopping good" business, that "very strong recommendation" that venture capitalists look for.
Venture capitalists really like a sense of "Wow", like a kid who discovers a candy jar.
And it is your business plan that must present that "Wow" to them. Without a strong business plan there will be no further discussions. Period.
And that is the second thing that successfully funded companies know: Presentation may not be everything, but without it there is nothing.
Business plans for venture capital will have the most unique approach of all. The SBA and banks don't demand the top quality presentations that venture capitalists demand.
This business plan cannot be "canned". Entrepreneurs who use business plan templates at this level of funding won't get this level of funding.
The presentation must be sophisticated, complete, accurate and ... yes, dynamic. It must represent the company just like an ad in Business Week or The Wall Street Journal would represent the company.
I recommend 3 steps for companies looking for venture capital:
1. More than any other type of business plan, yours must have a solid foundation of marketing stats. Research, research, research.
2. Create the most outstanding business plan possible. There is no second "up", so make that first impression count.
3. Create an outstanding website. Whether your company's business is based on the internet or not, a strong presence here is essential.
It is a truism that venture capitalists don't invest in companies, they invest in people. Without doubt, an exceptionally strong management team with a so-so product will get a better response than a weak entrepreneur with a good product. The theory is that it is easier to improve a product than it is to improve the people behind it. So strut your stuff -- the VCs are watching. (That means "Make that business plan so outstanding that they can't refuse, mo matter what the product is!")
Talent wins games, but teamwork and intelligence win championships.
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