What do Venture Capitalists look for?

**dude81** · 12-09-2009 11:33 PM

Hello,

We have a idea for unique product on the internet, that never existed till today. We needed funding from some external venture capitalists.

Before we approach Venture Capitalists, we would like to know what they look for when we ask them for Partnership or making shares.

We are from India, Hyderabad/Bangalore.We all of are 6 plus of Internet Industry experience in a technology and Business development.

Thank You
dude81

**akula** · 12-10-2009 12:32 AM

dude....it's too early to discuss vc with you
you have a misunderstanding what venture capital is and what it's used for
your base problem is financing, so the questions you should be asking are "how do i finance my business"?

**dude81** · 12-10-2009 12:58 AM

Okay sounds great, but I did enough research before I posted this question after many inquiries.
Any way, I agree, the base need is finance, do you have answer for the question.
What all I should do to get it done?

Thank You
dude81

**akula** · 12-10-2009 08:12 AM

yea sure...jst read some text books like new venture creation or talk to other tech entrepreneurs about how to finance the proof of concept...or look at this book to see how some of the greatest tech companies of the last 50 years were financed...assume a historical, statistical perspective on how tech ventures get off the ground

financing is done in stages...at the very early, pre product, pre revenue stage entrepreneurs use sweat equity, customer finance, consumer debt, savings, trade credit and donations (i.e. friends helping out for free, uni giving free resources etc..) to show proof of concept. that's what people use to get to later stages where you have a working product, a decent team, some paying customers and an objective to get to break even. at that stage, other sources of finance sometimes become available....but typically, founders fail at getting to this stage, which makes further discussion irrelevant...they fail because rather than talking to customers and building a product they run around for a year looking for venture capital..after which point they get fed up and quit...because they have no idea what they are doing...because they were never taught how to finance tech startup companies

stay focused, try to finance your proof of concept using the methods noted above. the other stuff, don't worry about it. if you want more ideas see Peter at antiventurecapital.com. keep it real, avoid this silly talk about these silly "investor" type things. take a real world educated view on how tech startups are financed.