Know Your Venture Capital Potential

By  |  0 Comments

It’s never been easy asking for money from someone, even your parents, but funding a business and asking random investors to trust your new idea will be a success is even harder. Yet, sometimes startups don’t have any other choice but to utilize venture capital opportunities to find their business.

Venture capital has been used to expand and create new businesses for decades, according to Wil Schroter. He believes it’s important to understand that U.S. venture capital had modest beginnings. The Small Business Act of 1958 aimed to help small businesses raise money to fund their companies. It’s also important to note that when going and asking for venture capital money, you have to be at a stage that will be appealing to these firms. Schroter writes, “Venture capital comes into play when a startup has established itself as a profitable business and is seeing very rapid growth.” Prior to asking venture capitalists for support, there is typically monetary backing from friends and family.

Crowdfunding, Schroter says, should not be the enemy of venture capital companies. Rather, “Crowdfunding is the perfect precursor to later funding rounds because it gives entrepreneurs the opportunity to gather the traction they need to attract later stage investors.” Yet before reaching this stage, entrepreneurs must also acknowledge that venture capital might not be the best fit for their company. Even if your startup has seen success, it may be more difficult for those outside of the technology realm to find interest from venture capitalists.

To read further into venture capital, click here.

Kara is a Summer Associate at [L]earned Media. She is in her third year at Syracuse University studying Communications, but is an original New York City girl. Kara has had extensive training in social media marketing and plans to pursue journalism, as well as her passion for acting.

You must be logged in to post a comment Login