Tips on Choosing a Reliable Venture Capitalist
Venture capitalists can come in very handy when you need to finance an idea. If you need to start up a venture or expand an existing one, venture capitalists can avail the finances you need. Below are some tips on choosing a reliable venture capitalist.
Investments from venture capitalists always come at a cost. The capitalist can demand a share of your venture or simply a return on his investment. A wise move would be to review the terms of investment before making a decision. you can easily know what is in store for you after the investment in critically assessing the terms offered to you by a venture capitalist. If the terms are conducive to your as a party in the deal it is recommended that you take up the deal. Take a preference of venture capitalists who take up a share of profits rather than those who want a share of your venture.
The second factor you need to have in mind is what the venture capitalist brings into your business. Some venture capitalists not only avail financial resources but also can connect your business to a broader market and marketing resources. The full potential of your brand can easily be tapped with this kind of resources a hand. Before going into a deal with any venture capitalist, ensure that you have assessed the complete value of what they are bringing on the table.
Thirdly, always remember that you are choosing a partner and not the money. Chance are high that you will spend a lot of time with the venture capitalist. Their presence is due to the fact that they need to protect their investment and see its success. The venture capitalists may enlighten and steer the decisions you make as board members in your venture. It is therefore recommended that you choose a venture capitalist whom you can spend a lot of time with and whom you share in ideologies.
As you choose a venture capitalist you can look into past businesses they have invested in. Consider looking into the amount of money invested by a venture capitalist, the returns requested on investment and how successful the investment was when choosing a venture capitalist. If reviews from previous entrepreneurs are available it is recommended that you read through them. You can assess the personal attributes and character of the venture capitalist through the reviews.
To finalize, ensure that you base your choice of a venture capitalist on the industry your venture is in. This enables you to easily understand one another with minimal time wastage. As you choose a venture capitalist let the above tips guide you.