Guide to finding the right investor for your Venture

In light of the recent global financial crisis everyone seems to have loss hope and it isn’t without justification. A growing number of start-ups are finding it increasingly difficult to attract private investors, and with major commercial banks tightening up the belt on lending, new venture ideas remain just that, IDEAS.

In this short article, we will give some insights as to how to attract the capital you need in order to launch your venture, beginning with the intangibles (selling the right ideas to the right people), as well as the tangibles (having the right presentation and business plan). We will also provide a list with full contact info of some of the more preeminent venture capital/angel investor firms internationally who are currently looking for projects to fund.

We can bet any good money that if you’re reading this booklet you know what venture capital is. Therefore, we need not poor you with a high school essay style definition. But for those of you who need a memory jogger, simply put venture capital “money provided by investors to startup firms and small businesses with perceived long-term growth potential”. So “Venture Capitalists”, are people engaged in the aforementioned act.

For most new firms and firms without a “track record” of even modest success, venture capital has always been the way to go. With the recent turn of events in the economy caused by an atmosphere of deregulation and corporate greed, finding capital has been akin to finding the proverbial needle in a haystack. In this vain, entrepreneurs find themselves having to turn to different ways and means of funding their ventures. Some sought thought home equity loans, but banks began tightening up, some sought credits cards, the traditional “last resort” for entrepreneurial fundraising, but the credit crunch has led banks to not only slash credit limits, but also make the acquiring of the oh so cherished plastic less accessible to individuals and businesses alike.

The above painted picture may seem gloomy but not so fast; let’s analyze a bit deeper and see why there’s always opportunity in a crisis. Many experts are acknowledging the slow but sure recovery of the economy, and investors are beginning to open their eyes again. Remember, many have seen their networths, or their portfolios/assets under management decrease substantially as a result of the crisis. They are looking for ways to make up for bad times, and what area of industry provides for the greatest return on investment? Greater than real estate, greater than oil, greater than any investment you can make in the planet? You guessed right if you guessed yourself, that old enterprising entrepreneur whose idea may very well be the next Facebook, Apple, or Microsoft.

Another key ingredient taking shape is the rise of social networking. Many entrepreneurs have sought refuge in online crowd funding websites like Kickstarter. Entrepreneurs post their projects on Kickstarter, who takes 5% of the overall dollar amount raised, and have the ability to take full advantage of the age old principle of “cooperative economics”. By having backers pledge $100, $50, $20, and even smaller increments, you can easily find your project being funded to the tune of thousands, or even millions in the case of a couple of projects funded through their platform. Will this ever take the place of traditional fundraising through VC? It remains to be seen. What it does accomplish is healthy competition wherein VC firms no matter what they tell you, hate it when an entrepreneur goes elsewhere to find the funding they passed up on.

This is part two in a series of guides we will be putting out quarterly. As we mentioned at the outset, at the end of this booklet we will put the name, contact numbers, contact persons, and contact emails of venture capital firms currently seeking capital. We have tens of thousands in our database but only give out no more than a hundred at a time and have to currently update this booklet due to: phone numbers changing, contact persons changing, firms closing, firms no longer accepting projects indefinitely, managing partner’s dog died, etc. We will also put out contact info at the end for any feedback, suggestions, rants, complaints, firms who you couldn’t reach, and also yes, PE Capital does accept and fund projects (will tell you which ones later).

Now that all that house cleaning crap is out the way, how THE HELL DO YOU APPROACH A VC FIRM? Well, one thing to consider is you approach them like you would approach anyone you are trying to impress and gain their attention, with RESPECT. Weput that in CAPS and in bold because we have seen people approach Venture Capitalists as though they were talking to someone on the street, or as if they were a loanshark and the VC firm owed them money. Please, in anything you do apply the golden rule.

Another important tip, don’t send out a massive emails or massive blind carbon copies (bcc’s). It’s cool if you’re a scammer trying to convince someone that you’re the next of kin of a deceased Nigerian prince who happen to leave behind millions of dollars in an account they can share with you, but it’s bad when you’re trying to get the attention of a VC. Picture this, you’re trying to romance someone and let them know how much you care about them and you write them this beautiful love letter. Then, all of a sudden the one you’re trying to romance just discovered that you wrote the same letter to 150 other people. How do you think they would feel? Same applies here. Always address a person by their name (that’s why we provide names), and always be polite and courteous. Don’t just blindly send a business plan and rant about how you’ll eat Mark Zuckerberg for lunch. Ask, “Mr. Smith I was wondering if your firm is actively seeking projects to invest in. Me and my partners wanted to know, would it be okay to send you our business plan for review?” Plain, simple, and to the point; the mark of a good businessman/woman. We also offer consultation regarding writing a stellar industry specific business plan. Feel free to contact us as time would not permit us to cover business plans in depth in this presentation.

Another important fact we include in the contact info is the industry the investors are interested in. You wouldn’t send an entertainment heavy VC firm a business plan about your dog training business (unless you’re training your dogs to sing and dance). Apply KYI, Know Your Investor, what he/she like and dislike. While we make no guarantees with the information provided in this resource and in the ones to follow, over the years, billions of dollars have been raised. We at PE Capital believe if you do the right things, have the right idea, for the right time, pitched to the right investor, no question you’ll be funded.

We briefly discussed the troubling economic times we faced in the aftermath of the meltdown of 2008. It is safe to say one of the culminating events that took place at the very end of that year is that Bernard Madoff was discovered to have perpetrated the largest Ponzi scheme in American history. Scammers and con-artists (and there is a difference), usually come to the light, and usually sees a green light of opportunity during a financial crisis. In the interest of full disclosure, yes PE Capital is a small scale investment group. However, we do not use our “bully pulpit” to influence our readers or our clients in a negative way against another firm. However, we are duty-bound; when we see an outright fraud being perpetrated to call these companies out, and inform you the entrepreneur how NOT to be victimized.

That as a prefix, here are some simple common sense keys to spotting the con-artists, the fake Investors, people who sit in their pajamas all day at home on their computer looking for victims who are seeking funding.

·        Very difficult to reach over the phone

·        Without hesitation declares their interested in funding your project

·        Last but not least, CHARGES UPFRONT FOR DUE DILLIGENCE FEES

The last point is a real kicker but let’s analyze all three and go over a real life example one of our clients recently experienced. One of the things about the internet is it provides a mechanism for a scammer to remain anonymous. They are able to chat with their intended victims, off times without ever wanting to chat over the phone. Because if you actually get your potential investor on the phone you may discover that Mr. Michael Smith has a West African accent. Let us point out one thing, we are in no way discriminating on anyone group of people, as there are scammers in Kansas and in Nigeria alike.

In all seriousness, we don’t want to see anyone get victimized. That’s why at the risk of being called libelous we will present a list of all the phony investment companies, advance fee scam artists, and crooked so-called “brokers” you need to look out for, on our blog http://pecapital.blogspot.com/.

 

PE Capital is a New York Based firm focusing on small business and consumer finance. We offer an array of products and services in all 50 states, including but not limited to:
 

 

** Note there are no UPFRONT FEES for any loans or investments we make.

For more information contact PE Capital at pecapitol@gmail.com