By Wade Henderson
A small entrepreneur can choose from several options for funding. Banks on the one hand will look at a certain set of criteria in order to provide funding. This criterion is usually based on the financial ability of the entrepreneur to pay back. Venture capitalists on the other hand, finance promising projects with the objective of reselling their stocks at a higher price 5 or 7 years after the business opened.
Venture capitalists analyze projects meticulously before choosing those they are interested in. At the end, they choose to finance on average 5 to 10 out of a hundred projects.
According to a survey of 70 venture capitalists, we find that the vast majority of them use a model of decision support based on the following criteria before making any decision:
The product and the market are highly considered by venture capitalists. They seek to understand whether the market is ready for the product and whether it has tendencies for development.
The other factor is relative to the ability of the business to be strategic and competitive. Venture capitalists analyze the level of competition, their relation with their suppliers and distributors, and whether they can stop new business from starting.
The management and the leadership abilities of the people in charge of the project or business is one of the most important factors for venture capitalists.
Other important factors are also competences in marketing, administration, organizational structure, sales, and production of the business.
Naturally, the project has to be financially appealing, stable and promising for venture capitalists to be interested.
Venture capitalists also study the conditions under which the funding will be granted. The relationship with the organization needs to be effective, harmonious and convenient for both parts. Investors have to manage their portfolio carefully in order to meet the agreements with the contacts.
These elements are fundamental during the qualifying process that venture capitalists and angel investors undergo in order to prioritize which projects they will provide funding to.
Venture capitalists are looking for their mainly on whether the leader and the team have the leadership qualities and management skills to complete the project. It is these qualities that will affect the rest of the project.
A small entrepreneur can choose from several options for funding. Banks on the one hand will look at a certain set of criteria in order to provide funding. This criterion is usually based on the financial ability of the entrepreneur to pay back. Venture capitalists on the other hand, finance promising projects with the objective of reselling their stocks at a higher price 5 or 7 years after the business opened.
Venture capitalists analyze projects meticulously before choosing those they are interested in. At the end, they choose to finance on average 5 to 10 out of a hundred projects.
According to a survey of 70 venture capitalists, we find that the vast majority of them use a model of decision support based on the following criteria before making any decision:
The product and the market are highly considered by venture capitalists. They seek to understand whether the market is ready for the product and whether it has tendencies for development.
The other factor is relative to the ability of the business to be strategic and competitive. Venture capitalists analyze the level of competition, their relation with their suppliers and distributors, and whether they can stop new business from starting.
The management and the leadership abilities of the people in charge of the project or business is one of the most important factors for venture capitalists.
Other important factors are also competences in marketing, administration, organizational structure, sales, and production of the business.
Naturally, the project has to be financially appealing, stable and promising for venture capitalists to be interested.
Venture capitalists also study the conditions under which the funding will be granted. The relationship with the organization needs to be effective, harmonious and convenient for both parts. Investors have to manage their portfolio carefully in order to meet the agreements with the contacts.
These elements are fundamental during the qualifying process that venture capitalists and angel investors undergo in order to prioritize which projects they will provide funding to.
Venture capitalists are looking for their mainly on whether the leader and the team have the leadership qualities and management skills to complete the project. It is these qualities that will affect the rest of the project.
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