Angels and vultures: how to get venture capital funding

Posted by Pierre de la Fortune on May 22, 2015 @ 12:01 a.m.

Written by David Wilson

So you have the cool, edgy name - Fast Banana or whatever. You have the connections - your friend's friend knows Guy Kawasaki. You have built up a blogosphere buzz - some sources say that Google should buy your business.

Cue a seven-month dog-and-pony show in front of a dozen investors, who coo encouragingly, but reject you. Damn! Devastated, you wonder how anyone raises venture capital from those stingy vulture capitalists.

Angel angle

According to analyst Tom McKaskill, a doctor of business, the key is to court rich private "angel" investors, who fund one in five entrepreneurs. Angels are inclined to shower blessings on operators who may not have the "A-team" behind them but can prove "high growth potential".

That means a compelling market need for your product or service. That means a focused niche, a keen competitive edge and clear distribution channels, Dr McKaskill says.

Boost your chances by only pitching for a modest sum - less than half a million dollars, he adds. Also, you need "right-place-right-time" sheer luck, especially now because the funding scene is "in disarray".

Economic abyss

"There's lots of good ventures running around looking for scarce capital," Dr McKaskill says. "So even a very good venture at the moment will really be pushing uphill."

Blame the rocky international economy. Dr McKaskill highlights the plight of US-based venture capital seekers who make the schlep to Australia.

"That really tells you something," he says, mentioning Silicon Valley hotshots who attend angel sessions in Melbourne because their base has dried up. "When Silicon Valley closes shop," he says, "the ripples are felt around the world." Still, in his view, a top-tier venture will always win funding.

Primal proof

The president of the investment consultancy Halifax Finance, Lana Larder, echoes him, saying: "good ideas backed by good teams and good plans can win over investors".

The appeal of your product or service becomes hard to resist, she adds, when you show that it reduces "pain". So, your venture should address everyday headaches that bug people - everything from computer freezes to balancing the budget.

According to Larder, people will pay you good money to make such aggravations go away. Prove you can.

Confess competition

And never deny that you have competitors. "No matter what," Larder says, "you have competitors maybe not a direct competitor, but at least a substitute."

If you claim otherwise, investors may deduce you are ignorant. Treat your audition for a cash injection as an opportunity to showcase your edge over competitors.

No frills

Keep your spiel simple, advises Larder.

Minimise scientific jargon and technical detail because investors only care about the key business angles. Two more to address are whether you can protect your product or service - through patents, say - and whether you can pursue development "at a reasonable cost".

Think fiscal

Sabrina Horn, CEO of Horn Group, a communications agency that represents "multiple" VC firms and helps "dozens" of companies get funding, accents the economic angle. "Understand that VCs are financial people," Horn says.

"Everything you show them has to have a financial upside: be it your technology, the strength of your team, your market opportunity," she adds. Prove you are profitable and merit being bankrolled.

Keep pitching

When you fail to persuade your potential sponsors to pay up, stick at it. With each pitch, other analysts say, you improve.

So, to echo serial entrepreneur Wil Schroter, it may be best to pitch everyone, all the time. That way you can gauge how effective your pitch is and if it even makes sense.

For more info please visit:

Is this article helpful?


This Video is Funny and the article is Awesome

This Video is Funny and if entrepreneurs thought like this we would all be in a world of trouble ;-) -Paul

Щ`Х` ٥ө` ` 饤

Щ`Х` ٥ө` ` 饤 Щ`Х`֥å`٥ 󥱩` פäݤ

Related articles: http://netsy

Related articles:


You really make it seem so easy along with your presentation however I in finding this matter to be really one thing which I feel I would by no means understand. It seems too complicated and very wide for me. I am looking forward in your next publish, I w

Write something about this article:

Money Blitz Word of the Day

Input(s) - Technical term for the money and any other resources allocated to a particular project or piece of work.

Money Blitz Quote of the Day

Be an opener of doors for such as come after thee, and do not try to make the universe a blind alley. -Ralph Waldo Emerson

WatchList Quote

Major Index WatchList

EUR & USD Interactive Chart