Growthinks Insider Secrets to Raising Venture Capital

SPECIAL REPORT

From: Dave Lavinsky, President, Growthink Dear Entrepreneur: In this Special Report, Insider Insider Secrets to Raising Venture Capital, Capital I provide you with a sneak peak at one of our most effective strategies for getting meetings with venture capitalists. For my complete, StepStep-ByBy-Step Guide to Raising Venture Capital, Capital go here: http://www.growthink.com/products/venture-capital-guide To Your Success,

President, Growthink, Inc.

OK, lets get down to business

Who is going to invest in your venture?

There are hundreds of venture capital firms that you could potentially contact. But you must understand that not all venture capitalists are created equal. Some are not a good fit for your venture, but others may be a perfect match. As with any marketing activity, you need to have a targeted campaign.

Develop a targeted list of VC funds.

The first thing you need to know is that venture capitalists dont just invest in whatever companies they find personally interesting. Each venture capital firm invests based on particular characteristics, including: o Market Sector: Sector Many venture capital firms focus on specific sectors such as healthcare, information technology (IT), wireless technologies, etc. In most cases,

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even if you have a great company, if you fall outside of the VC's sector preference, they'll pass on the opportunity. o Stage preference: preference VCs tend to focus on different stages of ventures. For instance, some VCs prefer early stage ventures where the risk is great, but so are the potential returns. Conversely, some VCs focus on providing capital to firms to bridge capital gaps before they go public. o Geographic location: location Most venture capital firms only invest within 100 to 200 miles of their office(s). By investing close to home, the firms are able to more actively get involved with and add value to their portfolio companies.

So, for instance, if you are a pre-revenue software company based in Chicago, your best bet is to find a venture capital firm within 200 miles of Chicago that has experience funding pre-revenue software companies.

Make sure the VC is active.

This is a critical step, because if theyre not active, they wont invest. Go to the press release section of the VC's website and/or search Google News to see how active the VC is. If the VC has not done a deal in the past six months, they probably are not actively investing in new deals and may not be worth contacting. What you will be left with is a list of VCs that are actively seeking companies like yours. Once you have your investor list, the challenge is to find the appropriate contact person at the VC firm and get in touch with them.

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Find Find the appropriate person to contact. contact.

VC firms are comprised of individual partners and associates. Once you find active VCs that fit your sector, stage and location, find the partner(s) that you think might be most interested in your company. The ideal partner has invested in companies that are similar to your company and/or has a background in your space. The ideal partner also has some time to focus on a new project. For example, if a partner currently sits on seven boards, they may be too busy to get involved with your company.

Next, contact contact that partner. partner.

But, before you make first contact, its important to establish a relationship with the partner. At the very least, you should learn more about the partner, so that your initial contact is as relevant as possible. For example, you can find out if the partner has a blog (many do). If so, read their blog to learn more about them and what excites them. It is also smart to post comments on their blog so you can establish a relationship with them. You might also see if the VC is active on Twitter (many are). If so, follow them on Twitter and see what theyre posting about. See if there are opportunities to start a dialogue. And all the while, think of these online interactions just as if they were offline in the real world. Act just like youd act as if you were meeting at a cocktail party. If they don't have a blog or arent active on Twitter, then research them on Google to learn more about them. If you are a member of a business-focused social network such as LinkedIn or Spoke, see if you can create a connection to them through that network. You should definitely join LinkedIn and other types of online professional networking sites if you are not already a member.

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Send a teaser email.

Next, once you have some history or at least a context from which to make a relevant introduction, email the partner. partner Usually the email address is listed on their website. But if its not, then call the VC firm to find out the partner's email address. Avoid the all-too-common mistake of emailing a generic email address (such as info@venturecapitalfirm.com or businessplans@venturecapitalfirm.com). These types of email addresses are like black holes youll never see a response. In the email, ideally you can make a connection to them via their blog or research (e.g., I read how you are involved with this and that. Based on that, I think you might be interested in my venture).

THIS IS IMPORTANT!! IMPORTANT!!! !!! Do NOT send VCs your business plan.
You must realize that VCs are drowning in unsolicited business plans. They are NOT going to read your business plan if you send it to them in the initial email.

Actually, you shouldnt even send an Executive Summary or a PowerPoint in this first
email. So what should you say in your email?

Instead of sending your business plan, give the VC teaser points about your venture.

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What do I mean by teaser points?

Teaser points are 5 to 6 bullets (200 words or less) about your venture with the key points of it. The goal of the teaser email is to: Create intrigue and excitement Show that the market size is big enough Show that the management team is unique Prove that the venture is capable of generating significant revenues over time Create a sense of urgency (e.g., implying that you will get financing within 90 days with or without them)

If the VC is interested, they will email you back to request an executive summary, PowerPoint deck, or even your full business plan.

This strategy works.

As just one example, I used this strategy over a four week period to schedule over 50 VC meetings for a company who eventually raised several millions of dollars of venture capital. Ive included the teaser email on the next page (edited for confidentiality purposes).

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SAMPLE teaser teaser email: =================================

Subject: XYZ Company Introduction

Dear [Name], I am contacting you because I am confident that our company will interest you. Key facts about our company include: Leader in developing XYZ technology to improve ABC. 3rd party research shows that this market is poised to grow from $100 million in 2008 to $2.5 billion in 2012 Our president is one of the world's leading authority on XYZ technology . He has six XYZ patents and was one of twelve experts worldwide who spoke at the recent XYZ technology conference Our technology provides critical advantages over ABC devices (the technology it displaces) and other XYZ firms

2008 revenues/grants total nearly $500K Key strategic alliances/partnerships have been formed with Partner 1, Partner 2 and Partner 3 Our company is based in Madison, WI

We expect to close this round of financing in the amount of $5 million in the next 90 days. Please contact me directly at [555-555-5555] if you would like to learn more about our company and/or to schedule a meeting. Regards, Dave

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I hope youve enjoyed what youve learned in this Special Report. This methodology is time-tested and proven. In other words, if you have a fundable business and you follow the tips in this report, chances are you will get at least one meetings with a VC. Why am I so confident? Because getting meetings with VCs is actually pretty straightforward if you dont make the obvious bone-headed mistakes that hundreds of entrepreneurs make every day. But theres one (BIG) problem Lets say you follow the tips in this report and you are able to secure 10, 15 or 25 meetings with venture capitalists. Well, you might think youre about to get funded, but in reality

Getting VC Meetings Getting Funding.

In other words, even even if you get TONS of meetings with VCs, VCs, your chances of actually raising raising venture capital capital will still be slimslim-toto-none, none, if you dont know what youre youre doing. doing. Let me be blunt If it were quick and easy to raise venture capital, everybody would do it, and everybody would be multi-millionaires or billionaires but thats NOT the reality. In reality, its not the meeting that gets you funded. Rather, its what you do before the meeting, at the meeting and after the meeting that will determine whether or not you get funding, and whether that funding comes on favorable terms, or whether you gain or lose control over your companys future. The vast VAST majority of entrepreneurs fail to raise venture capital because theyre unprepared, they lack the necessary knowledge of how VC really works, and they lack a proven, step-by-step action plan for getting funded. I created Growthinks StepStep-ByBy-Step Guide to Raising Venture Capital for precisely this reason to show you all the pitfalls ahead of time (so you can avoid them), and to give you the expert advice and tools you need to successfully raise venture capital. The Step-By-Step Guide to Raising Venture Capital will answer all the questions you MUST know, including:

What you need to accomplish before raising venture capital The 2:6:2 rule of venture capital and how to modify the way you present your company to play into it The types of companies VCs love to finance and how to position your company as one of them

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The exact criteria VCs will use to judge your company How to create your high concept pitch, and why its so amazingly effective in attracting VCs The one, overlooked section of your business plan that is critical to raising venture capital (HINT: its NOT what you think it is) The ten (10) questions that your investor slide presentation must answer, and how to order and format your presentation to maximize effectiveness How to find the right partner to contact at each VC firm How to tell if a VC is serious about funding your business...or just wasting your time The exact technique a 22-year old college dropout used to raise venture capital What it means to over-shop your deal and how to avoid this like the plague What information to cover in your VC presentation and what NOT to say How to properly answer the trick questions that virtually all VCs will ask you How to develop rapport with VCs that results in a big financing check The fifteen (15) most important venture capital negotiating issues and which ones to fight hard on and which ones you can give in to How to gain leverage to better negotiate the terms of your financing What you MUST do before signing a term sheet, or your financing could disappear forever... Two (2) insider techniques to raise venture capital while protecting your business ideas and intellectual property (IP) How to expertly follow-up with VCs and when persistence is a good thing (and when its not) What to do if your management team is not complete

If youre serious about raising venture capital, you can learn more on this page, here: http://www.growthink.com/products/venture-capital-guide To Your Success,

President, Growthink, Inc.

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