venture capital fund

How to Raise a Venture Capital Fund

Raising venture capital is one of the most rewarding ways to accelerate your company’s growth, but it is also a daunting task that will take at least six months to complete, and no one gives you guarantees that you will get a positive response after that much time of waiting. Therefore, it is also not advisable to devote all your time to attracting investors and forget about other important business operations. In this article, we will break down how to raise a venture capital fund most effectively and increase your chance of investing.

Is seed funding the same as venture capital?

Both seed money and venture capital are private equity investments. In the first case, however, the amount requested is much smaller, and therefore, seed funding is only the first step in seeking venture capital. Its main purpose is to help the company get off the ground and get further into the business world, and it keeps you afloat. Venture capital, in turn, is a more powerful lever that encourages further growth of the company. Also, seed funding tends to be contributed by individuals, whereas large venture capital comes from entire organizations.

With seed funding, startups have the opportunity to hire a team of professionals and start producing a line of their products or services, while venture capital expands your scale of productivity.

Ways to raise capital – best practices

Below we provide tips on how to raise venture capital. By following these ways, your chances of funding will become much better:

  • Prepare in advance, identify your needs

You need to work on your business plan to establish what your needs are. Having one in place will help you estimate the amount of funding you require and what your specific needs are worth spending it on. Once this is decided, you can immediately know where to go, how to express your business proposal, and when to start looking for funding.

A business plan is also very useful for recreating and articulating your goals, market, customers, competitors, product definition, and future projections.

  • Search for potential investors online

When you research venture capitalists, their interests in investing, and what offers they receive most often, you can understand many things. Do you have any chance of getting funding?  Do the existing investment offers to match your needs?

Of course, the best thing to do would be to find investors from your target market. This way, experienced professionals will be able to give you valuable advice on developing your business.

There are several useful platforms on the Internet where you can find what you’re looking for:

  1. Tech Nation
  2. Crunchbase
  3. Investor Hunt
  4. BVCA

All of these solutions are capable of finding you investors that fit your business goals.

  • Network to build relationships

This network can bring you some benefits beyond investment opportunities such as having like-minded entrepreneurs with whom you can collaborate and help each other. The best platforms for such purposes are:

  1. Capital Enterprise
  2. Business Funding Show
  3. Paradigm Talks
  • Hire an advisor for expert information

In the case of TechStars, the most appropriate venture capital firm is a Capital Advisor, an advisor who can provide you with advice on issues such as the optimal design of your pitch to investors and points for raising capital. Advisors are usually part of a network of venture capitalists, who would be curious to learn about your idea. Advisors can also be your go-between and help enhance the conditions of your transaction.

But don’t rely on them too much, the main job is still on you, you should be familiar with the fundraising and development basics.