In the realm of startups and burgeoning businesses, the term “angel investor” holds significant weight. These individuals play a pivotal role in fostering innovation, fueling entrepreneurial aspirations, and driving economic growth. But what exactly is an angel investor, and what distinguishes them from other forms of investors? Who Is an Angel Investor? Angel investors are […]

Starting a business requires a lot of resources, and one of the most significant challenges entrepreneurs face is securing funding to turn their ideas into reality. One of the most common sources of funding for startups is venture capital. Venture capitalists invest in early-stage companies that they believe have the potential for rapid growth and […]

There are some excellent alternatives to venture capital that you should also explore in your search for funding sources.  One such alternative is an angel investor – a term for an investor that takes you under its wing and lifts you up to the next level of growth.  Angel investors typically do not have deep […]

Put yourself in the place of potential investors when determining how to describe your product or service.  An investor would want to know what you offer and why it’s better than what’s already available on the market.  How is your product or service new and different?  If the product or service is not yet on […]

The business plan is a detailed road map to your venture and how you plan to grow it into a successful business.  It’s a crucial document for anyone seeking capital, and is typically developed with two audiences in mind: 1) angel investors – wealthy individuals who personally invest their money, expertise and experience in your […]

The first professional investor to a deal at the start-up stage is referred to as the Series A investor.  This investment is followed by middle and later stage funding – the Series B, C, and D rounds.  The final rounds include mezzanine, late stage and pre-IPO funding.  A VC may specialize in provide just one […]

This section should include the names, backgrounds, and qualifications of key management and what their respective responsibilities are in your venture.  Discuss why the management team is well qualified to make this business successful.  If any of your management team, board, or advisors have had prior success as an entrepreneur, note this – it will […]

The exit strategy is the VC’s way of cashing out on its investment in a portfolio company.  A VC often hopes to sell its equity (stock, warrants, options, convertibles, etc.) in a portfolio company in three to seven years, ideally through an initial public offering (IPO) of the company.  The company becomes liquid through the […]

As an entrepreneur seeking venture capital funding, crafting a strong investor pitch is critical to your success. Your pitch should be concise, compelling, and tailored to the needs and interests of your target investors. Here are some tips for crafting an effective venture capital investor pitch: Start with a clear and compelling problem statement: Your […]

This section tells your potential investors exactly how you make your product or service available to customers and how you plan to get the word out about your product or service.  Here, you should discuss your marketing channels and provide sales targets.  It’s best to give a number of different marketing strategies, possibly beginning with […]

This is one of the most important sections of your business plan because it lays out the viability of your venture.  You should have at least a basic understanding of the numbers you’re presenting – sales forecasts, profit-and loss statements, balance sheets, and cash flow projections, etc. – before you speak with any prospective investor, […]

A term sheet is a document that sets out the basic terms and conditions under which the VC will invest in your company.  Work completed in the due diligence phase of the funding process is used to draft this document.  The term sheet is generally non-binding and is used as a template, along with further […]

Venture capitalists look for businesses that have the potential to grow quickly to a significant size, yielding a significant return on the VC’s investment in a relatively short period of time.  VCs are not just interested in start-ups.  Your company’s current size is less important than its future aspirations and growth potential.  A target company […]

At the end of your business plan, you may want to consider including an appendix.  The appendix contains any additional information you think would be helpful to share with potential investors.  This may include resumes of your management team, additional charts, graphs, and/or financial information, any articles or other press coverage of your company, and […]

The executive summary is by far the most important section of your business plan because it’s the first thing the busy VC or prospective investor will look for and read to get an idea of your investment opportunity. If your executive summary is compelling enough, the VC will read further, contact you for more information, […]

Venture capital is money provided by an outside investor to finance a new, growing, or troubled business.  The venture capitalist provides the funding knowing that there’s a significant risk associated with the company’s future profits and cash flow.  Capital is invested in exchange for an equity stake in the business rather than given as a […]