Venture Capital for Business Growth: 4 Ways to Get Noticed
Know what venture capital is? See how venture capital firms fund growing businesses and four ways to catch their eye, from SME expos to signing the deal.
Business owners, small and large, each have their own needs when it comes to growing the business. Sometimes, partway through the journey, a company runs short of capital for expansion, even though expansion is essential for the business to last. Owners no longer need to worry, though, because venture capitalists stand ready to help build the company by investing their money in it and receiving a share of the returns in exchange.
There are steps a business owner can take to get noticed by a venture capital firm, so that the business gains extra capital to grow.
- Attend SME Expos
Expos for small and medium enterprises (SMEs, or UKM in Indonesian) are usually attended by investors hunting for start-up companies. This is where business owners get a good chance to win extra capital. Some SME expos even set up a special session for face-to-face meetings with investors, so owners can prepare a business plan that catches investors' attention and makes their company one that investors want to fund. Venture capitalists often organize these events themselves to look for young companies that could prove profitable later, so they can screen the participating companies in person.
- Submit a Business Plan
When looking for venture capital, the business plan is crucial. Its purpose is to lay out the business strategy, estimate costs and needs, raise the value of the business and find sources of funding. Business owners can structure the plan so that it appeals to investors: explain its contents in clear, simple language without rambling, and include accurate, complete data so that it is easy to understand and leaves no room for misunderstanding.
- Feasibility Review
Once a venture capital firm has shown interest in the business plan, this is the right time for the feasibility review. It keeps the entrepreneur busy: investors ask for interviews, evaluate the business and its products, and then weigh their advice for improving the business they have targeted. At this stage, investors decide, according to their own calculations, whether the company is worth funding.
- Sign the Agreement
When a company passes the feasibility review and both sides reach an agreement, the venture capital firm provides the financing the company needs. The business owner and the venture capitalist sign the agreement and complete the required administrative and legal matters. Once those are declared complete, the funds are disbursed to the owner's account and can be used right away as additional working capital to grow the business.
