Internet venture capital is funds made available for internet firms a with exceptional growth potential. Venture capital is a type of equity funding for new or growing businesses. These types of investments are very risky for a venture capitalist so they require a large rate or return on their investment or a large ownership stake in the company.
The main things to consider before seeking venture capital funding are:
- Does your business have a new, unique product or service that targets a large group of people?
- Can your business compete and become a leader against the top companies in your market?
- Does your business need between $500,000 and $5 million to operate and get your product to market?
- Is it easy to get the public to notice your unique product or service?
- Will your product or service require tons of customer support? The less customer support needed, the better chance you have of obtaining funding.
- Can your product or service generate gross margins greater than 50%?
- Is your management team knowledgeable about the new product and service, and do they have prior successful business experience?
- Can your business achieve gross annual revenues of $25 million in 3 years if the necessary venture capital funding is provided?
It can be difficult to obtain venture capital financing, but it is worth trying. Regular bank loans can be another option for you to obtain financing. If your business has been turned down for bank loans it could also point to the fact that you don’t have any business credit scores established. Your credit scores are the first thing that a bank will look at to determine your businesses credit worthiness. It is important to have separate personal and business credit scores as well. Since your credit scores are the first thing a lending institution will look at, if you don’t have good business credit scores they won’t spend the time looking at your business model. It is a possibility that your business isn’t being financed because your business model is risky, but because you don’t have solid business credit scores established.