Financing Your NEXT Billion$$$

FINANCING OPTIONSWhile there are numerous financing options there is no one size fits all or most. Where your company currently stands financially and its business credibility will be determining factors in which options are available to you. We begin by taking an in-depth look at what it takes to do business with a Venture Capitalist (VC). CAPITAL RAISEVenture capital is the process of raising money from individuals and firms that invest in high growth, high risk companies. To compensate for higher risk, venture capital investors (VCs) expect a large return on their investment, higher than say a bank would expect. In addition, in exchange for their investment, VCs get partial ownership in your company, called equity, and some measure of control over decision-making.Raising venture capital is a tough endeavor and isn't right for all companies. But if you're considering this route for raising money, read on to learn the answers to the burning questions you have about why you are not attracting money. "Financing Your NEXT Billion$$$" will tell you everything you need to know about how to raise venture capital funding.DOES MY BUSINESS FIT THE VC MODEL?The first step in raising venture capital (VC) is making sure venture capital is right for your business. For many businesses and business owners it is not. Here are some questions you should ask yourself to assess if you're a good fit.ARE YOU WILLING TO LET GO OF SOME CONTROL OF YOUR BUSINESS?A lot of businesses owners underestimate the fact that raising venture capital means selling part of your company (i.e. equity) to sophisticated investors. Most business owners are used to being able to call all of the shots. Raising venture capital means being answerable to other people. You will need to have a plan that makes sense to your new partners. You will need to report monthly results to investors. And you will have to answer to others if you fall short of company goals. It's possible you may lose control of your company depending on how your capital raise is structured and how well you perform.WHAT DO I NEED TO PREPARE?Every business is a little bit different in what it will need to prepare for a VC round. Here's a general list that most companies will need to prepare for potential investors. You won't need all of these to start but you should have them ready before any potential investors start asking for them.Business PlanPresentation Pitch 10-20-30Product DemonstrationDetailed Product DocumentationReferencesEssentials in your 2-page Business PlanEach plan is different here are some common things you should probably cover in the detailed portion: Market opportunityWhy your solution is 10 times betterProof that you can sell and deliver your productGo-to-market planTeam, BoardScalabilityFinancials and projectionsKey risksThe order of these and any one item is less important than creating an overall convincing case that you've got a winner on your hands.DUE DILIGENCEMost business owners think of due diligence as a formality that a financier goes through just before closing the deal. That thought process is highly flawed. Due diligence begins the moment a VC is approached. While actual due diligence questions will vary depending on the type of business you have, here are some common areas. It's best to get prepared for all of this before engaging a VC. Financing Your NEXT Billion$$$ gives you a list of 26 Due Diligence items to get you on your way to investor compliance. To make the due diligence process go as smoothly as possible, do the following: Setup a Virtual Data Room. It's a good idea to keep a data room or a file sharing service (e.g. Dropbox), so investors can access and return to documents in an organized way.