How To Convince A VC For Venture Capital Financing

Venture capital financing has become a palliative term for the current startup ecosystem. When all doors close, only that of venture capital remains as the last viable option for an entrepreneur. More interestingly, seed stage startups are keener in chasing VCs despite knowing that these investors are more inclined towards growth stage ones. This is because there are many VC firms that make seed stage investments the moment they find a unique business idea. However, this is quite a big challenge that first-time entrepreneurs fail to understand.

If you are a first-time entrepreneur looking to raise venture capital, here are the basic prerequisites that you must have with you.

Venture Capital Financing

Basic Things To Attract Venture Capital Financing

A Billion Dollar Idea

VCs get attracted only to money-making ideas and there is no doubt about it. If your idea sounds unique in the sense that it can easily grab the attention of the target market, it is worth the investment. You need not come up with a whole new product. Even offering an existing product with an added feature that can bring a world of difference is a brilliant idea!

A Great Management Team

A Scalable Business

Is your business ready to face any market condition? Market keeps changing and in order to attract venture capital financing you must show up with a highly-scalable business. It is critical for any business to be scalable to thrive a competitive market. Remember, your rivals are constantly aiming to capture the market and scalability is the first thing they would aim for.  Make sure you too have a scalable business model so that VCs consider it as a lucrative investment opportunity. 

A Powerful Value Proposition

An idea looks more appealing when it actually starts working. Venture capitalists tend to look for a working model of your business to gain confidence. If you have one that shows why customers would buy your idea, you are a winner! You can do this with the help of a group of beta customers who show trust in your product and are even ready to wait for it to hit the market. Try this and see how VCs get exciting about your business.

A Great Team

A great management team is always at the core of a successful business. Try to create a team of talented individuals who are dedicated, smart and committed. It is a fact that investors get easily drawn towards businesses with great leadership teams. They visualize these individuals as the strong foundation of a flourishing business. 

Conclusion

These are the basic things that any venture capital firm would like to see in your startup. For more information on venture capital financing, feel free to visit http://mergeralpha.com/.

Happy fundraising!

Pros And Cons Of Venture Capital Finance

Raising Venture Capital

Venture capital finance has emerged as a saviour for the current startup ecosystem around the world. When no other financial organization shows the courage to invest in your seed-stage business, it is a venture capital firm that dares. No wonder, you too must have a unique plan so as to attract a VC firm.

While it is all about raising fund at the end of the day, it is also equally important to select the most suitable funding option. You never know a wrong option might instead waste your time and check your company’s growth. Here are some pros and cons of venture capital financing that can help you decide whether or not to opt for this source.

Venture Capital Finance

Pros

●        Capital

It is undoubtedly the most powerful source of capital that your startup can get access to. The amount of capital you get from a VC is, any day, higher than what you receive from other investors. Moreover, VCs remain with you till the end and hold your hand during crisis periods. 

●        Additional Services

Apart from offering capital, venture capitalists also offer many value-added services such as offering guidance, sharing knowledge and contacts, etc. They also use their contacts across the industry to help you build successful strategies.

●        Credibility

Raising venture capital is a great achievement. Having a VC by your side gives credibility to your business and helps it to attract more investments. Typically, venture capitalists prefer to rely on startups that have already raised capital once.

●        No Repay

Unlike loans, venture capital finance is solely profit oriented, i.e. you need not repay the capital after a fixed period. Rather, the investors wait for the time when your company starts earning revenues. Once you have made enough profit, they take their share of the profit and exit the venture.

Cons

●        Danger of Losing Control Over Your Business

Your control over your business often remains a major concern with VCs constantly eying the small and big decision of your business. While they do this with an intention to help your startup make the right move, it often results in a loss of control on the part of the owner. If you are too conscious about your ownership over your startup, you may need to think twice before approaching a VC.

●        Expensive Funding Option

Venture capital requires you to spend a lot of money in the initial phase like hiring a financial lawyer, hiring a financial advisor to assist you in valuing your business, creating your leadership team, etc. You have to ensure that you have enough liquid cash to pull out these phases successfully, or else, you may consider some other funding option. 

●        Challenge For Seed-Stage Startups

Typically, venture capitalists like to invest in growth stage as the risk associated is comparatively lesser at this stage. And even if they invest at seed stage, it is when they find a unique plan with immense market potential. Naturally, the challenge is highest for seed stage startups.

Conclusion

Once you raise venture capital successfully, it is all worth the effort. It is like reaching that very first milestone which makes achieving the other ones easily. No matter, you must consider both the pros and cons carefully before taking an action.

For more information on venture capital finance, feel free to get in touch with us at MergerAlpha.

Good luck!

5 Tools You Need To Attract Venture Capital Financing For Your Startup

Venture Capital Financing

Attracting venture capital financing has become a preferred choice in the current startup ecosystem. This is largely due to the amount of capital that VCs are willing to offer to high-potential startups. If you want to raise venture capital for your seed-stage business, here are the 5 tools you need to convince a venture capitalist.

Tools To Attract Venture Capital Financing

1.      A Unique Business Idea

Though not impossible but raising venture capital is certainly a challenge. Considering the very small numbers of entrepreneurs who get a chance to raise venture capital, you must think of something that investors cannot overlook. In other words, you need a billion dollar idea that can offer a unique solution to an existing issue. It should be something that your target customers have long been waiting for. Investors find such ideas more reliable than any other type of offering so think something unique!

2.      A Strong Value Proposition

It is an often overlooked aspect of raising capital that you must pay attention to. Venture capitalists are highly learned people having great proficiency in their respective industries. They also know how your competitors are hovering over the market aiming to capture it. At this point, it becomes your responsibility to demonstrate why customers will prefer your product/service over your rivals’. You must come up with a strong value proposition. It is possible when you can prove that your customers can even wait for your product instead of buying from your rivals.

3.      A Great Management Team

Investing in a business is more about investing in the leadership team of the company. This is one of the biggest deciding factors when it comes to venture capital financing. Try to create a team of smart, talented, committed and experienced individuals to take care of the various departments like finance, management and sales. Such a team is a complete package that accounts for the overall success of a business.

4.      A Working Model

Mere pitching your idea without demonstrating it with a working model is an incomplete approach. Before you approach an investor, make sure you are ready with a working model that can help them understand your plan with better transparency. The better they understand, the faster they can reach a conclusion about whether or not to sign the deal. Even if they reject it, you can immediately start working on it for a higher level of perfection.

5.      A Scalable And Sizable Market

Competition is very high and it is a must that you target a sizable market in order to gain enormous profit. Simultaneous, you should aim for scalability as it is the basic nature of a market to change or expand. If you have a scalable business, you will have no difficulty in expanding your business and keeping yourself up to date with the latest trends.

Conclusion

These basic tools are the prime aspects that can either make or break a deal. So make sure you put your best foot forward for the campaign so that you do not end up wasting your valuable time and money.

For more information on venture capital financing, feel free to get in touch with us at Mergeralpha.com.

Happy fundraising!

Best Sources For Venture Capital Finance In India

Venture Capital Finance in India

The venture capital industry in India is rapidly growing in size owing to the entry of large numbers of local and global venture capital firms craving for high-potential startups. However, there is still a lot of scope in the sector as there currently only a few 100 companies in the country offering venture capital finance to innovative startups. However, the funding option isn’t always suitable for all startups so it is best to study both the pros and cons of the option and then reach a conclusion.

So, if you have already determined the suitability of the option and now looking for an investor in India, here’s a list of some of the most active venture capital companies in India that are investing in fast growing markets like Technology, Energy, Finance and various other sectors. If you have an innovative idea that can bring a change to the society and a super-efficient team to execute the plan, there is always money for you in the market.

Some Of The Most Active Venture Capital Finance Companies In India

Helion Venture

Located in - Gurgaon and Bangalore

Makes early to mid-stage investments across sectors like Mobility, Online Services, E commerce, Enterprise Software, etc.

Band of Angels

Located in - Mumbai

Primarily invests in healthcare, wellness and software; makes seed, early and later stage investments.

Light Speed Venture Partners

Located in - New Delhi

The company invests in Software, Enterprise Software and Mobile; prefers seed, early, later stage investments along with Private Equity, Debt Financing and Grants.

Bessemer Venture Partners

Located in - Mumbai

Preferably looks for startups across Mobile, Software, Enterprise Software and makes seed, early and later stage investments along with Private Equity and Debt Financing.

Battery Ventures

Located in - Mumbai

The firm mainly invests in Analytics, Software and Enterprise Software; usually makes seed, early and later stage financing along with Private Equity and Debt Financing.

Matrix Partners

Located in - Mumbai

The investors look for innovative ideas in Software, Enterprise Software, E commerce, Mobile, Financial Tech, and SAAS; make seed and early stage investments.

Accel Partners

Located in - Bangalore

The firm invests in Infrastructure, Internet and Consumer Services, Cloud Enabled Services and mobile software. It prefers growth stage investments.

Jumpstart Ventures

Located in - Bangalore

Makes early, later stage and Debt financing with prime focus on Internet, E commerce and Software.

New Enterprise Associate

Located in - Bangalore

Prefers seed, early, later phase investments including Private Equity and Debt Financing with interest in Mobile, Biotech and Software.

Canaan Partners

Located in - New Delhi

The company prefers sectors like Biotech, Software and Healthcare. The preferred stages of investment include seed, early, later and Private Equity and Debt Financing.

Conclusion

Nothing can stop you if you have the right set of things to convince a VC firm. A unique business idea, a capable team, a strong value proposition, a sizable and scalable market and an innovative business model are some of the basic prerequisites for raising venture capital. Ideally, you should also get your business valuation done as it will enable both you and the investor to recognize the real worth of your business.

For more valuable information on venture capital finance, feel free to get in touch with us at http://mergeralpha.com/.

Happy fundraising!

Advantages And Disadvantages Of Venture Capital Funding

Venture Capital Funding

Raising a business is like raising a child. Both demand dedication, love, sincerity, effort and time. However, raising a business often calls for raising capital which comes with huge responsibilities as you are expected to delight your investors with huge profits after a certain period. As a first-time entrepreneur with a seed-stage startup, you may find it very difficult to convince banks or other financial institutions. So the common options you are left with, typically, includes friends and family, incubators, crowdfunding and venture capital funding.

While the other funding options do not require much forethought, venture capital funding do require a good amount of homework as it comes with a lot of terms and conditions which might not be always favorable for your startup. So to determine whether or not it is a suitable option for you, you can read the advantages and disadvantages of VC funding mentioned below. If you think the points under disadvantages don’t really bother you, then yes, you must chase a VC!

               

Advantages Of Venture Capital Funding

●        A venture capital firm can give you access to maximum amount of fund that no other investor can think of.

●        You can raise your business with other people’s money.

●        You can not only grow your business but also expand your company with venture capital.

●        A venture capitalist can add great value to your company by investing in it.

●        They offer many other additional services apart from capital such as knowledge sharing, offering guidance and mentorship, sharing valuable contacts and expanding your business network.

●        You get introduced to many influential people in the startup eco-system who can offer your new ideas on business building strategies.

●        Venture capitalists, typically, have years of experience in managing finance and business. They are always available to offer you proper guidance on how to utilize the fund to gain maximum profit.

●        Once you manage to partner with a VC, finding another VC becomes easier.

Disadvantages Of VC Funding

●        There is huge competition in the VC industry. Out of 100, a VC firm usually selects only 2 or 3 startups for investment.

●        The investment tenure is typically, 3 to 5 years after which investors prefer to exit with their share of profit. You have to ensure that you startup can manage to make that much profit within the time-frame.

●        Legal and accounting fees are often very high. If you are aiming for a small-scale business, you must give a second thought to VC funding.

●        A detailed business plan along financial projections are a must. The procedure is comparatively lengthy and complex, so proceeding without proper planning can cost you hugely.

●        VC companies are usually actively involved in your company’s decision-making process so there consent is a must at every step.

●        They usually offer the capital in exchange of a share of your ownership in the company. If you are too concerned about your control over your business, you should better look for some other funding option.

●        There are chances of your losing control over the business if you cannot manage it properly.

●        Watch out for your share of profit percentage at the end. 

Conclusion

So these are some of the major factors, typically, associated with raising venture capital. Some are really exciting while some are matters of serious concern. At the end of the day, it is all capital that brings in capital, i.e. you must have enough money to jump into the campaign. And even before money, what you need is a highly innovative business idea that carries a much-awaited solution for the target customers.

If you have a unique idea, a smart and talented management team, an innovative business model, a scalable market, a strong value proposition, an interesting pitch and enough capital for your campaign, you are quite likely eligible for venture capital. So explore your strengths and get ready for the most suitable fundraising campaign! Also, do share with your experiences with VC raising.

For more information on venture capital funding, feel free to visit Merger Alpha. 

Pros And Cons Of Venture Capital Financing - Know What You Need

Venture Capital Financing

So you are determined to set your business off the ground. Great! No doubt you will explore venture capital financing at some point of time as it is one of the most sought after funding options among entrepreneurs. While there is an undeniable potential in the option to help your business grow and expand, it may not always be the best one for your startup.

Whether or not to raise venture capital is a critical question that you must have to answer depending on what matters to you most - getting rich quickly or being the sole controller of your startup and help it grow on its own pace. Here are some of the pros and cons of VC financing that should help you in your decision making.

Pros And Cons Of VC Financing

Pros

●      You get access to huge amount of capital phase by phase.

●      VC financing is targeted to high-risk startups.

●      The VCs offer many additional services apart from the capital such as offering guidance, mentorship, sharing contacts and assisting in building business strategies.

●      Raising venture capital is a great learning experience that helps you rise as a better entrepreneur.

●      You get the opportunity to build and grow your business with other people’s money.

●      Even a single VC can add great value to your startup by investing in it.

●      VCs are familiar with your industry and know a lot about the latest trends so they can always be a good source knowledge for your team.

●      He can help you in critical decision makings.

Cons

●      The funding option is not for every startup.

●      There is tremendous amount of hard work and sincerity required in process.

●      Without a sound knowledge of finance, the VC route is totally dark.

●      The investor would like to take part in your board so that they can track the growth of your business at the same time ensuring that the capital is being utilized in the most productive areas.

●      You may lose control over your business if you cannot handle the business properly.

●      If you are too concerned about your control over your company, venture capital is not the option for you.

●      You may need a lawyer and financial advisor which is going to be little expensive though worth the money at the end.

Conclusion

Typically, venture capitalists prefer to invest in established businesses or at least those that have already started earning revenues. However, there are many firms that are involved in seed-stage funding too so you always have options in the industry - all you need is the right set of tools to raise the money. Some of the prerequisites for venture capital include an innovative idea (product or service), a sizable and scalable market, an innovative business model, an impressive first pitch, a strong value proposition, etc.

Do share with your choices and experiences regarding fund raising in the comment box given below. For more information on venture capital financing, feel free to get in touch with us at Merger Alpha.

Good Luck!

Raising Money? Seek These Investment Funds In Singapore

If you want to feel nervous, excited and thrilled all at a time then be an entrepreneur and raise capital. Yes, capital raising is the most crucial and challenging phase of building a business. If you are already running a fundraising campaign for your newly-started business, then you are definitely one of the luckiest persons on earth because no matter if you succeed or fail to convince the investors, the effort itself is an achievement as it teaches you a lot many things.

So, if it is the city state of Singapore where you are looking for suitable investment funds, there is no dearth of options for you. Today, there are more than 100 venture capital firms in Singapore aiming to invest in high-potential startups with an innovative approach.

If you think you are ready with what it all takes to convince a VC, below are some of the best names for you from which you can choose a suitable investor for your dream venture. The investors differ in their sector preference and stage of investment so it is best to first identify the right investors and then start chasing them.

         

Popular Investment Funds In Singapore

Ardent Capital

Headquarters - Bangkok

Stage - Seed and early stage investments.

Industry - E commerce, Finance, Venture Capital

Adam Street Partners

Headquarters - Chicago, IL

Stage - Seed, early and later.

Industry - Software, Enterprise Software, Biotechnology

Carlyle Group

Headquarters - Washington, DC

Stage - Early, later stage and Private equity investments.

Sector - Healthcare, Software, Web Hosting

JFDI.Asia

Headquarters - Singapore

Stage - Seed, early and grant investments.

Sector - E commerce, Mobile, Software, B2B Enterprise, Web.

Jungle Ventures

Headquarters - Singapore

Stage - Seed and early phase investments.

Sector - Consumer Internet, Enterprise Tech

Welden International

Headquarters - San Francisco, CA

Stage - Seed, early and later phase venture capital finance along with Private equity investments.

Sector - Semiconductor, Security, Software

Extream Ventures

Headquarters - Singapore

Stage - Seed and early phase investments.

Sector - Software, Social media, Enterprises

GGV Capital

Headquarters - Menlo Park, CA

Stage - Seed, early and later phase venture investments along with Private equity and Debt Financing.

Sector - Mobile, Internet, E-commerce, M-commerce, SAAS, Digital media, Enterprises, etc.

Gobi Partners

Headquarters - Shanghai

Stage - Seed, early and later phase investments.

Sector - Advertising, Photography, Travel.

Golden Gate Ventures

Headquarters - Singapore

Stage - Seed and early phase financing

Sector - Software, Enterprise Software, E commerce, SAAS, Logistics, Mobile, Payments, etc.

Intel Capital

Headquarters - Santa Clara, CA

Stage - Merger, acquisitions and Private equity investments.

Sector - Enterprise, Mobility, Digital Media, Consumer Internet,

Innosight Ventures

Headquarters - Singapore

Stage - Seed and early phases.

Sector - Finance, E commerce, Security.

SingTel Innov8

Headquarters - Singapore

Stage - Early stage investments.

Sector - High-tech startups.

JAFCO Asia

Headquarters - Singapore

Stage - Seed, early and later phase investments.

Sector - E commerce, Mobile, Games

SEAVI Advent

Headquarters - Singapore

Stage - Early and later phase along with Private equity investments.

Sector - IT, Cleantech, Telecommunication, Energy, Retail, etc.

Infocomm Investments

Headquarters - Singapore

Stage - Growth stage investments.

Sector - Advanced Technology.

IGlobe Partners

Headquarters - Singapore

Stage - Early and later phase investments.

Sector - Software, Manufacturing and Cloud Computing.

Stream Global

Headquarters - Singapore

Stage - Seed and early stage financing.

Sector - Digital Media, Mobile Tech and ICT.

McLean Watson Capital

Headquarters - Toronto, ON

Stage - Seed, early and later stage investments.

Sector - IT, Internet, Telecommunication, Energy, Software, etc.

Upstream Ventures

Headquarters - Singapore

Stage - Seed, early and later phases.

Sector - Software, Security, Biometrics, IT, IDM, Internet, etc.

TNF Ventures

Headquarters - Singapore

Stage - Seed and early stage investments.

Sector - Payments, Consumer, Travel, etc.

Conclusion

Convincing any of these investors can be very easy once you have all the prerequisites in the right place. Starting from a unique idea to having a smart and intelligent team, an innovative business model, a strong value proposition, a sizable and scalable market, an impressive first pitch and of course, the right attitude are some of the most valuable things you must have with you.

Do share your fundraising experience with us in the comment box given below. For more information in investment funds in Singapore, feel free to get in touch with us at Merger Alpha.

Good Luck!