The Process

Beginning the Venture Capital Process

In order for venture capitalists to justify taking on the high risk involved in providing capital to a startup, primarily they will need to be satisfied that what they are investing in is innovative and offers high growth potential, whilst demonstrating that the market is conducive to growth is also important in the business plan. It is important to consider market conditions and offer prospective venture capitalists an attractive business model.

Preparing a Business Investment Plan

Venture capitalists frequently search for startups which offer something distinctive to the market. It is of great importance to have a unique product/service with high barriers to entry. The product/service should ideally be trademarked so as to allow the startup some room and time to develop and gain traction in the market.

With venture capitalists knowledgeable in the areas they wish to invest in, it is essential to develop a business model which is uniquely attractive. To entice investors to consider your startup for capital, it is crucial to demonstrate that you have a compelling idea.

Medena Holdings advises that entrepreneurs should consider market saturation, economic data, level of consumer demand and company projections when constructing a business plan. Focusing on market conditions and future projections derived from data analysis can play a big part in convincing venture capitalists of company potential.

Due Diligence

Should the venture capitalist be enticed by your business plan, they will then undertake the process of performing due diligence. They will take in an-depth look at the business plan and apply scrutiny to the data provided, examine proposed management structure, and thoroughly examine the product/service. Throughout this process they will consider terms and conditions for any future contact.