3 Components of a Venture Capital Evaluation
Picture your last job interview for a moment. Remember the jitters and your desire to have all your ducks in a row? The same goes for being evaluated by potential investors, including those who might invest venture capital in your business. Here are three vital components to have lined up before you head to your evaluation:
Going to Market
Venture capital is also called startup capital since it’s specifically allotted for new businesses which have the capacity to grow exponentially in a short amount of time. In other words, investors are looking for quick success. Part of your business’s success depends on how great the market is for your product so be sure to evaluate these questions: What is your target audience? Are you addressing a particular need in a unique way? Will the market grow over time, necessitating increased output of your product? The answers to these questions will help you know if you have a big enough market for your business.
Selling Your Product
Your financiers won’t likely invest in a reinvention of the wheel. They want to see something that’s one-of-a-kind, attractive and exciting. Do some research and find out if anything similar to your product is already on the market. This doesn’t mean that you have to invent something entirely new; rather, it could be different in one small but important way and still have a cutting edge against your competitors. Get an idea of what customers are interested in by asking your family members, friends and neighbors or by conducting surveys in your community. The more you can find out about the potential success of your product, the better.
Managing a Lot
Last but certainly not least, you’ll want to show that you have plenty of experience in managing. You should know and actively practice the keys to being a successful manager. For instance, do you work well with other people and delegate responsibilities when needed? Can you show that you have an excellent work ethic and aren’t afraid of putting in all the extra hours that it takes to run a business? Can you demonstrate to your investors that you’ve run successful projects or worked your way up through a company in the past? Thoughtfully answering such questions will assure your financiers that you have what it takes to make a business soar.
With these key components in mind, you’ll be equipped to take the edge off of those jitters and talk confidently with your potential investors about obtaining venture capital.