Venture Capital and Angel Investment: What's the Difference?
Before delving into the venture capital process, it's important to understand the difference between angel investment and venture capital. While the two play a similar role in funding startups, there are some important differences to be aware of. When many people think of venture capitalists, they think of the stars of shows like Dragon's Den, when in actual fact, the investors on Dragon's Den are really angel investors. The main difference is that these "angels" are usually investing their own money, while venture capitalists manage money and investments for several different people and companies. This means that angels are usually willing to take on higher-risk investments while venture capitalists are looking for a more sure-fire return.
Where to Find Venture Capital
While you may be able to find an angel investor willing to invest in your company, most companies will have an easier time securing funding from a venture capital firm. There are plenty of venture capital firms out there, so you'll have to find some way to narrow down your choices if you don't want to waste your time. Instead of approaching firms at random, see if there's anyone within your business or personal network who has a connection to a venture capital firm. Any sort of personal connection will help your business get noticed among the huge crowd of startups that are seeking venture capital funding.
How to Approach Venture Capitalists
In order to secure venture capital, you'll need to prove that your startup is a solid investment. Rather than looking for the latest high-risk/high-reward investment opportunity like some angel investors are, most venture capitalists are more interested in investment opportunities that will provide a sure-fire return, even if that return is smaller. For this reason, a bulletproof business plan is a must when approaching a venture capital firm.
Is Venture Capital Right for You?
When you're looking for venture capital, it's important to be aware that venture capitalists are not the type to simply throw money at your business and let you take it from there. When a venture capital firm makes an investment, they'll likely want to have some control over how that investment is handled. Depending on where your funding comes from, you may be giving up a lot of your independence when you accept venture capital. Before agreeing to anything, make sure you understand the terms of the investment, and make sure the investment will truly be good for your business.
Starting a business on a shoestring isn’t easy, and finding venture capital can be a challenge. Approaching venture capitalists takes courage and a solid plan. If you’re looking for venture capital for your business, having a serviced office is a great asset. A prestigious and fully outfitted office space that you can show potential investors will give them the impression that you are serious about making your business a success. To find the perfect serviced office in your area, visit us at http://www.servicedofficesmayfair.com/