Resources for Business Capital Part 3 : Venture Capitalists

Resources for Business Capital Part 3 : Venture Capitalists

In this third part of a three-part series on “Resources for Business Capital” I will be talking about Venture Capitalists, their role, who they are, why you should consider them, and also provide links to databases and other miscellaneous places to find and learn more about Venture Capitalists. If you haven’t read the first two articles I have written on “Business Plan Development – Resources for Business Capital” you may want to take a look at them first before moving onto VC’s. Here are the links to both of those articles; Resources for Business Capital: Small Business Grants, Resources for Business Capital: Angel Investors.

In the last article I talked about how business Angels differ from VC’s in what their expectations and requirements are. But what are venture capitalists exactly? As Rhonda Abram’s sums up succinctly in her book Successful Business Plan: Secrets & Strategies;

“As you search for money, you probably will hear the term “venture capitalist” quite often, but those who use the term may be referring to different entities. True venture capital firms are among the most sophisticated investors available, typically providing an entrepreneur with more than money. Their knowledge, experience, and connections may prove to be as important to your company as the dollars they bring.”

It would appear that VC’s are incredibly risk aversive but looking for greater returns than a CD from a local bank. Because of these naturally conflicting financial prerequisites VC’s have a large network of support to increase your success probability. However that may mean if they like your idea, but think your role in the company as CEO or whatever position you want is not the best fit for the company and their investment, than they may require you to take a different role in the company. Sounds like the old cliché “it’s business….nothing personal” type of attitude which you must be willing to accept as a prospect if you decide to take VC money.

I have decided to feature VC’s last in this series because they are fickle about who and what they invest in. They want extreme high-growth in the companies they choose and they expect hundreds of millions or even billions of dollars to be made by that company in the future. Thus for the majority of entrepreneurs or small business owner’s-to-be (and current owners as well) VC’s are just not a viable option. You would be better off trying to look for loans, grants, or Angel investors before contemplating a VC.

However if you are looking for a VC and think your company meets their stringent criteria than listen to what Ann Winblad a VC with Hummer-Winblad Venture Partners has to say on what to expect from a VC if you decide to pursue them;

“An entrepreneur should only go to a VC if they want the added value a VC can bring. With a VC, you’re asking them not only to invest money, but to use every leverage point they have, each business and industry contact, leadership and support in subsequent funding rounds, and an honest critique of your business.”

So with that said you now have decided whether you are at the stage or have the kind of idea a VC wants. From this point on I assume you are moving forward with where to find VC’s and/or gain more knowledge about them and the networks that support the VC industry. I am going to provide some links I have uncovered in my searches that I think will be useful in your endeavor and a short description.

As I stated in my previous article I have to say how impressed I am with the Center for Business Planning’s website. They have an extensive range of information on writing business plans, marketing plans, coaching, products, services, and support. I was able to find a well-detailed and extensive database of over 300 investing firms. This alone is like a one-stop shop for finding and targeting investors. When you first go on the site you can narrow your search by type of investor (Angel or VC), and their funding stage (Seed, early, mid, late, and merger). Not only can you narrow down your selection they give you the name, address, area served, and a link to their website as well as the industries they focus on and information about their funding stages and capital investment range. This is definitely a page worth bookmarking.

Another website I was able to track down was vFinance.com. They have this one particular place on their site that you can search for Venture Capitalist firms using their VCSearch tool. The only catch is that they charge you depending on how you utilize their search engine. Most of the ways you can search are free though. Here is their pricing menu when searching for VC’s. I have also included a link to what a sample search result would look like. I like that you can search by industry, location, keyword, the stage of development your company is in, and how much money you are trying to generate amongst other things.

There are many other databases I have come across and I provide some links to each of them. PSEPS claims to be the largest open VC and private equity directory. MyCapital helps connect with all kinds of capital including a VC directory that provides a questionnaire to help narrow your search. The National Venture Capital Association provides a database of VC’s that’s free and a plethora of news and membership services. If you know more about the NVCA site please email me because I would like to hear any personal experiences you might have with them. INFON.com has a free searcheable VC database as well as other paid services. BusinessPartners.com introduces businesses to partners and capital including banks and professionals as well as information on a variety of business and investing topics. RaiseCapital.com is yet another search engine with over 4,800 listings.

In regards to individual VC firms I have uncovered a few of them on the web that I was personally impressed with. Garage Technology Ventures is an early stage VC investment firm. NEA specializes in information, energy, and healthcare technology. They appear to invest at any point in the company’s growth phase. Edison Ventures has a very modern looking website. Of course it might be explained by the fact that they heavily invest in information technology start-ups. Draper Fisher Jurvetson backs “extraordinary entrepreneurs everywhere who set out to change the world”. They appear to have a focus on the internet tech, mobile communications, clean energy, and healthcare. They have backed well-known companies such as Skype, Hotmail, and Parametric Technologies. Accel Partners is a venture capital firm with offices and investments all over the world. They have backed companies such as Facebook and Walmart.com.

Well that about wraps up this series on Business Plan Development – Resources for Business Capital. As I have stated in previous articles I welcome your comments on new information you may come across that will help make this article better. Your feedback is most appreciated whether it is new information about other sites and organizations I haven’t listed here or information regarding sites and links I link to. Also if you have any positive or negative experiences you’d like to share after using any of the particular databases or VC’s found through this article please share them with my other readers by posting a comment.
I hope you have found this article useful and if you like my site or these articles please share it with the world on Facebook, Twitter, and/or any other social media outlet you may use. Don’t forget to like my Facebook page and at the top of the web page Recommend me through Facebook. Good luck on your journey to raise capital and I wish you much success in your business ventures. Take care and stay tuned for more.

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