How to ask for money | Предприниматель

How to ask for money

In order to find a worthwhile project, venture investors have to search through a huge number of applications. For example, a venture capital fund Bessemer Venture Partners (BVP), which manages $ 2 billion, a number of projects coming to 150, every year fund chooses companies to invest 20-30. According to the BVP partner Jeremy Levine, in order to select a worthwhile project, he and his colleagues have to listen to year, thousands of presentations. Esther Dyson, president of the venture fund EDventure Holdings, invested in the initial stages of 23andMe, and Flickr, for example, even difficult to say how many candidates for the investment it has to communicate every week. “Somebody just e-mail reply,” Thank you, no, “but with someone have to meet to find out whether my project criteria,” – said in an interview with Forbes Esther Dyson. And Igor Taber, director of Intel Capital fund in the CIS, says he gets 10-20 offers a week. With half of applicants met personally. As a result, investment will be only one (only since 1991, Intel Capital has invested more than $ 9.5 billion in 1050 companies in 47 countries). Investor’s important to understand whether it can get your money back with a vengeance, working it in this niche, with this entrepreneur, it is with this team. Often, it becomes clear in the first conversation. Forbes asked the five partners of the world’s leading venture capital funds that, that costs and what not to say , presenting his project. Here are their tips.

Igor Taber, director of Intel Capital fund in the CIS

1. Do not try to give accurate financial forecasts, because in reality no one can predict what will be the company’s revenue in three years. Much more important to show what assumptions you use, and predicted earnings and costs in their business model. Stating that the company needs $ 20 million investment, but without revealing the key assumptions in your financial model, you very few people are interested in your project.

2. Show that you have significant experience in the field, which you do, that you understand your market, know the key people on it. Show that your team believes in you, that you are the entrepreneur who must lead this company.

3. Do not try to prove that you know everything. Failures are as important as successes. All things being equal, I am more likely to uphold an entrepreneur who has been a failure and who understands its causes, than someone who has never made a mistake and thinks that all knows.

4. Be honest. Project, based on misleading consumers, it is better not to show. If you are disingenuous with customers, why should a potential investor to believe that you do not do unto them as well?

5. Focus. The report, which lists all the steps that the company intends to undertake in the hope that at least one of them will work, is unlikely to be interested. It is not necessary to list alternatives, he make out of their own.

Giuseppe Tsokko, a partner at Index Ventures Fund

1. Do not argue about who afterwards you could sell your business. investor interest to invest in a company that focuses on development and not for sale .

2. Do not say that your business can scale up to infinity. It is not.

3. Do not tell me about a dozen possible sources of income. Effectively manage them too hard, you should focus on.

4. You do not need to pronounce each item in detail on the slide.

5. Speak clearly. Show your product and tell us about its features at the beginning of the presentation. It is advisable to do this in two or three sentences.

6. Explain why your product is vital, why your team should do this project. Let this be an impressive history.

Jeremy Levine, a partner at venture capital fund Bessemer Venture Partners

1. Do not send VC thick “business plan» . If your concept is so complex that its meaning can not be present in the 15-page presentation, it is unlikely that idea like a venture investor.

2. Focus on three key issues most interest to investors: the team, market size, the uniqueness of your product. If you can not clearly explain these three things, the investor does not make sense to spend time on you .

3. Do not use corporate jargon. All of these phrases create a feeling of ‘somewhere I’ve heard, “even if the idea is really innovative.

4. During the call, do not dwell on the “Privacy”. Believe me, the benefits of free exchange of ideas outweigh the risk that someone will steal your ideas. Ideas are cheap, and their expression in life – much more expensive. It is better that you presented the investor trustworthy man – he can be a guarantee that the investor will not deceive you. Check whether to invest in a competing venture fund development.

5. Before you sell your project investor, examine portfolio of venture capital fund . Appropriate reference to the company, in which the fund has invested, increases the chances that he interested in and your development. If the project does not correlate with any of the investment portfolio of the fund, you probably should look for another investor.

Alexander Galitsky, a managing partner of venture fund Almaz Capital Partners

1. Clearly define the problem, you decide. Find out who she cares – representatives of a particular industry or a particular social group. The creators of startups are too often carried away the beauty of global problems.

2. Show what the originality of the solution. It is important to demonstrate its competitive advantage not only in technical terms, but also in terms of business efficiency. Choose as competitors of similar size companies, do not go on the warpath with Microsoft or Google .

3. An assessment of the market should be well founded. Investor wants to get a high return on invested capital. The market should be large enough so that the company was able to expand into adjacent niches.

4. Describe the business model to gain market share. No need to paint a lot of market opportunities, and all groups of potential customers is important, “threw out” the most efficient way, the least expensive way to enter the market and prove the possibility of monetization ideas. Show investors that you have all figured out.

5. Tell us about your team and about whom it is lacking. That team determines the success of the project , it is important that it be balanced. The entrepreneur must soberly assess their capabilities.

6. Tell me, as you need money and they will be used . On this question of the most difficult to achieve startups answer. Need not be complex calculations – it is important to demonstrate an understanding of when and on what money is needed.

Esther Dyson, president of the venture fund EDventure Holdings

1. The venture capitalist is not just looking for a place to invest. We take a company and help it grow. So for me it is important to you, what the company was interesting to me. In the U.S., are projects related to health in Russia range of my interests is wider. I really like to invest in companies that focus on solving real problems, whether it is logistics or health, and offer people new opportunities. I have to understand what happened to me this company will be able to achieve more than without me.

2. One of the biggest mistakes – when the contenders for the investment does not even bother to learn about other companies in which I invested, I wonder if they are equal, and my criteria. If it was difficult to make inquiries about me, do not have enough energy to develop their business.

3. The belief that the business is enough to start a good idea, wrong. Most of the ideas can be copied. So it must be the best in the embodiment of his idea. And to change the business to changing market demands.

4. To get my attention, you need to know exactly what problem your project and who needs it.

5. Be sure to look for information on the team – who is it that these people have done before. Interesting not only successes but also the errors from which they could extract valuable experience.

6. Describe the market, product or service you offer, the competition.

7. I need some financial information. I never believe these numbers – the numbers have never not confirmed. But these calculations help to a perception of cost, income and liabilities of the founders. Need to know, for example, how many people need and what level of …

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