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Tuesday, July 19, 2016

What Venture Capitalists Want: 4 Tips to Secure Funding

Posted by Armanino Technology Group

Ever since there have been start-ups, there have been entrepreneurs vying for investors’ attention. In today’s technology world, access to funds is easier than ever. But it can also be very confusing. Start-ups need money to grow their businesses, and venture capitalists need to invest in start-ups in order to expand their portfolios. So, what are investors looking for? And what can entrepreneurs do to make themselves more appealing? Here are four pieces of advice to help you increase your chances of securing funding.

1. Do Something Impressive
Inc.com published an article in which the author interviewed Harry Weller, one of the world’s biggest venture capitalists. Harry’s advice was simple—he encourages entrepreneurs to get out of their comfort zones and test their ideas on people beside family and friends. Showing that you have evidence your product will thrive across a wide variety of consumers is invaluable to investors, and they will commend you for putting forth the effort.

2. Do Your Homework
You need to research the investors you are pursuing and make sure you’re pitching to the ones who culturally fit your business model. In a way, it’s like dating. You have a better chance of the relationship thriving if you’re a good match. Know the investor’s background and be prepared to sell them on why your start-up is the right fit for their investment portfolio.

3. Follow Through
You can talk all day about your great idea, but if you don’t have anything to show for it, then no one is going to invest. Period. The more you can do by bootstrapping, the more likely an investor will be impressed by you and your ideas.

4. Be Yourself
This might be the most cliché advice out there, but it really is solid advice. At the end of the day, investors are people just like you. They are going to have to work with whoever they invest in, and they want to work with someone they like. So be yourself.

So what do venture capitalists want? They want you to be impressive, do your homework, follow through, and most importantly, be yourself. Once you do all this and the offers start coming in, you’ll need to know how to decide which to accept. Stay tuned for our next blog on that topic.

Technology companies face ongoing challenges, from subscription-based accounting issues in the software sector to supply chain disruptions in high tech. Armanino has the practical expertise to meet the industry’s diverse needs. We combine real-world experience with technical skill to help clients solve immediate problems and implement long-term strategies for success.

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