Venture capital is funding invested into your businesses success. Venture capital includes funds that are made available by a private group of investors into a business with high growth potential. A group of investors will invest money into a business with the goal of earning a profit on their investment. They will invest in all stages of a company if they find it worthy of an investment. Venture capital is best suited for companies with a new, unique product or service that has a large national [...]

6. Is the market that you will serve huge? In our example above the Venture Capitalist may not care so much about customer support if the market is so large that it out weighs the cost to educate the consumers. Your oven may have such mass appeal that after development it can be sold to General Electric or Whirlpool for introduction into the market. 7. Can your product produce gross margins greater than 50 percent? If your "margins" are below 50% than the margin for error is too low. [...]

Why is a business plan so vital to the health of your business? A business plan is a written description of your business’s future. That’s all there is to it. It is a document that describes what you plan to do and how you plan to do it. If you jot down a paragraph on the back of an envelope describing your business strategy, you’ve written a plan, or at least the seed of a plan. Business plans can help perform a number of tasks for those who write and read them. They’re used by investment [...]

4. Tax Status Federal and state income tax returns for the last three years Detail of any tax audits 5. Contracts and Agreements List of Bank and non-Bank lenders Joint venture and partnership agreements License agreements Purchase agreements Liens, equipment leases, mortgages or any other outstanding loans Insurance contracts and agreements Contracts with suppliers, vendors and customers Any additional [...]

If you passed the Initial Venture Capital Qualification Test, now the real work begins. Raising venture capital is a pain staking process that must be done in a methodical and deliberate manner in order for you to maximize your opportunities for success. I know as any good entrepreneur you are tempted to pick up the phone and begin dialing lists of venture capitalists and tell them your wonderful story YOU’RE NOT READY YET. Before you make that first call make sure you are prepared by completing [...]

Most venture capitalists say that plans over 50 pages tend to end up in the round file, but remember it is the introduction to the VC that counts and if you have their attention before you present your plan, then if you need 100 pages to convey the "Big Picture" it won’t be the kiss of death. It will depend on the nature of your business. If you have a simple concept, you may be able to express it in very few words. if you’re proposing a new kind of business or even a new industry, [...]

10. Management and Personnel Management organizational chart and bios of senior personnel Detail of any labor disputes Employee compensation plans including pension, options, profit sharing, deferred compensation and retirement Management incentive plans including pension, option, profit sharing, deferred compensation, retirement and any non-cash compensation Employee confidentiality Agreements Listing of any consulting Agreements [...]

4. Completing your business plan and executive summary: If you haven’t already completed your business plan, then you must. If you have completed it you need to review it and make sure it is complete, accurate, and supportable. Potential investors or advisors will immediately start asking you questions and if you don’t have the answers on the tip of your tongue you are sunk. The act of writing your business plan will force you to address every issue and to know the answer to the questions that [...]

Want to know what investors are looking for in the numbers of your financial statements? Most investors usually look at the income statement first to see whether gross, operating and net income margins are in line with industry averages. If not, it’s a negative. Then again, it doesn’t have to be the kiss of death. Many companies have not reached the critical mass on sales that will reduce the effects of fixed costs, or may be experiencing high costs because they’re growing. Next most equity [...]

Along your entrepreneurial journey, take the time to thank those who help you. If you will treat others the way you would like to be treated, you will find that people will go out of their way to help you. I have tried my best to give you the benefit of my knowledge and experience. I sincerely hope I have helped you. In 1995 I founded BusinessFinance.com to help business owners just like you. Our mission statement is "To Help Businesses Grow and Succeed". Today I am still the CEO [...]