Forums: Discussions for entrepreneurs and small business.

Hello SUNsters~

I recently asked for some feed back on a website idea in a different post and got an awesome response. Simultaneously, I posed the idea to some VC groups as well.  I have gotten some exciting and unexpected responses from them too.  I currently have 2 meetins set up to discuss the "next step".  I have had no experience in working with VCs in this capacity. Has anyone worked with them? Or are you a VC? And if you have or you are, can you give me an idea of what a VC expects in the "next step" discussion. Any help is greatly appreciated! Best Wishes!

Ken~

Ken:

Congratulations.

There are a number of questions and comments that might apply. The first one is:   Do your homework and some due diligence. Learn all you can about them.

I assume you mean these are firms that manage & invest other peoples money.

Robert Johnson

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Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com

Yes. These are firms that manage and invest other peoples money. Thank you for the advice. I am in the due diligence stage right now. Best Wishes!

Ken~

Ken,

Awesome news.  Keep us all posted.  Sounds very very exciting.

 

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Bryan C. Fleming

http://www.BryanCFleming.com

VC`s want to know what is possible exit strategy.  How quickly can they be liquid.  Your job has three main goals, 1) get the money 2) show them you can handle and manage the business 3) show them that you turn that investment into liquid cash

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Dalouman

Thank you all for your support and advice. I will definately keep you updated on how things are going. Best Wishes!

Ken~

If you`re personally dealing with VCs, always be mindful of what terms of ownership they want.  Many small business owners have avoided reading the fine legal print and did not realize exactly how much control they gave to the VC until it was too late.  To be clear, firms that engage in sell-offs or hostile takeovers are a minority.  VCs are definitely not the bad guys and are a great "next step".  But there is only one of you and a multitude of VC firms, so you can afford to look around for the most favorable terms. 

Knowing who owns and runs the VC firm can often be a good predictor of their investment philosophy and how much leeway they give the companies they invest in before they decide to liquidate their stakes.

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"Forget inspirational quotes to keep you going. If by doing what you do, you get an hour every day to relax, be with the ones you love in comfort without doing wrong, then it is all worth it." -Anon.

Thank you for the advice, David. I am definately keeping my eyes open and my cards tucked away. I appreciate your input. Best Wishes!

Ken~

Dear Executeksearch

I have deal with VC`s before and let me give you a little advice that will hopefully help you.  VC`s are different from during the dot com boom (bust)  Most VC`s nowadays want to see cash flow upfront and see that you are well on your way to becoming successful.  Gone are the days when VC`s just throw money at an idea.  Most VC`s want a "working model" to initially invest in with a first round of financing.  Then once revenues grow, they are generally open to a second round of financing.  There is also another twist here.  Most of the time now VC`s want to have an exit strategy after the second round.  This generally, but not always consists of buying you and your partners out or to broker a deal with an interested buyer.  Many VC`s will now utilize "forensic accountants" to go thru every detail of your cash flow.  Depending on your level of revenue and stage of startup development, you might wish to contact Austin Ventures in Austin Texas and pitch your idea to them.  They have very deep pockets and work well with their clients..  Don`t expect to do an "elevator pitch" with folks at this level though, they play hardball and are extremely successful at what they do.

Hope this helps and if i can be of any future help please don`t hesitate to contact me at sdstillings@earthlink.net

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Big Tex Consultant

I`m back!!!!!

Thanks Big Tex. I wanted to update everyone on how things have been going and why I have been absent lately. Well, I found a private equity investment group, locally, that is funding the development of a new online venture for my company. Here is the strange part. My life long best friends dad is the managing partner in the firm! I had no idea that he was throwing his capital around or else I would have given him my "elevator pitch" a long time ago! I am hoping to have a launch date of Jan. 1 2007. The absolute best part of this venture is that for every dollar that it brings in it will essentially take $5 away from my competitors!!! I am so excited and that is why I have been absent lately. I hope you all didn`t forget about me. Yes, I will remember you all when I am on the cover of Forbes, don`t worry! Best Wishes!!!

Ken~