For most business owners, of course, reality will never
match the dream. Saying that most businesses will not be funded is to
understate the obvious. In fact, less
than 1 in 1,000 companies are funded by VC -- and that is of those that bother
to apply.
Nonetheless, just as athletes dream of Olympic Gold and
climbers pine to scale Mt. Everest, entrepreneurs will always strive to attract
VC dollars. If you find yourself
dreaming of venture capital, dream big, and follow these simple rules:
1. Spot the Big Trends
Venture capitalists succeed by staying ahead of the
curve. The nature of their business
demands that they invest in markets and industries that are rapidly expanding.
If you are not in today’s hot markets, it’s unlikely you will get the attention
of early stage investors.
It’s generally accepted that technology firms make good
venture investments, but those in the fastest growing segments, like
biotechnology or nanotechnology, will have an even better chance of attracting
attention. Industries that are in vogue
with VC change, however, so beware. Keep
an eye out for the big trends that will shape your market, and align your
business to take advantage of these trends.
In the end, even if a venture fund does not take a shine to
your company, this strategy can pay off in faster growth. So keep the wind at your back and your eye on
the horizon.
2. Target a Big Market
The corollary to being part of a big trend is having a big
market. To justify a large venture
investment you’ll nee to project a big return in a small amount of time. There’s no way to do that without selling
into in a large, lucrative market.
