Any luck with Venture Capitalists?

**CIsaac** · 04-11-2008 11:44 AM

Hey guys,

Just wondering...has anyone been lucky enough to achieve venture capitalist funding or know anyone who did? If so, how did it work out and how were the stipulations? Just curious because I have gotten some conflicting information from some people.

**CIsaac** · 04-11-2008 04:27 PM

Wow! No one huh? Kinda answers my questions regarding the VC market. Probably would make a difference if the guidelines for most firms were a little bit more lenient maybe? Or the minimum amount lowered?

**Fanatik** · 04-11-2008 07:20 PM

There are plenty of VC's out there willing to listen if you approach them correctly. Furthermore, there are also plenty that have lower threshholds to invest. Think of how many clients they'd have knocking the doors down, and how many shitty proposals they'd waste their time with, if they said "We're willing to only invest $10,000 if you need us!"

Have you tried contacting any VC's and seeing their reply to this question? Have you done research on your own to find some VC's in your area? Have you made phone calls? Do you even have a business plan yet? Marketing Plan? Projected income?

There are plenty of common-sense things to have in order before you even think of VC. If your business can be run as a sole proprietorship, why would a VC want to invest money? If you're not looking to give them a decent ROI, why would they consider? Are you planning to expand; maybe capitalize on an opportunity and bring on more people? Are you offering a product or service that hasn't been offered? Do you know your target market, key market, allies, competition, etc?

These are all questions I'd want answered in a 10 minute time frame, maybe less as a VC.

Just a thought or two.

J

**CIsaac** · 04-12-2008 12:11 PM

Thanks for the response J. I am well aware of the procedures to receive VC funding and the steps necessary to solidify one's proposal. I guess I didn't phrase my question right. I wanted to know if anyone has heard of someone who may have received such funding and what their opinion was afterwards (although I'm sure it helped their business venture tremendously for the present). What I'm curious about is the after-effects--any positive/negative feedback? I have dealt with some conflicting opinions from some who have received it and was just wondering if anyone in the YE community has ever had similar/or not so similar experiences.

I have been seeking opinions fron an array of forums because I think it might help me as I help the small business clients I work with.

**jasaunders** · 04-12-2008 01:50 PM

The answer to your first question is yes. However I don't understand your second question. Opinion afterwards on what?

**CIsaac** · 04-12-2008 02:10 PM

Originally Posted by jasaunders

The answer to your first question is yes. However I don't understand your second question. Opinion afterwards on what?

Afterwards meaning no regrets, minimal regrets after a few years? Would they do it all over if they had to or achieve financing in a different way? Did they find out that after paying VC ROI that they were in same place where they started (minus investment of course) or maybe they found numbers tripled and everything paid off?

I'm just babbling with a few questions and I know that every situation isn't the same but I could use some opinions.

**Fanatik** · 04-12-2008 02:21 PM

Gotcha. That is a decent question indeed. I'd be curious to see a reliable response from someone - although YE may not be the prime spot to get that kind of feedback. I'd imagine you could get the whole spectrum though... people that love it and people that love to hate it. I think one of my past businesses could've done well with VC help, but since I didn't have it, I had to work that much harder. Now, the business that's on the cooker right now, I believe will do well either way.

I think the context of your question is definitely valuable, but like you said yourself - different circumstance will warrant different responses. Some people may have grande ideas in thinking a VC will be their God-send... and others not so much.

I know I was absolutely no help! Haha, I'd like to see some good replies though!

**CIsaac** · 04-12-2008 02:40 PM

Lol..

It still helped because what I got from it was if the experience is to be rated it was a "B" but not necessarily an "A" or "C?" That helps. And I'm sure there are varying positions arising from different business backgrounds. I hope to hear more!

**akula** · 04-25-2008 02:23 AM

Originally Posted by CIsaac

Just wondering...has anyone been lucky enough to achieve venture capitalist funding or know anyone who did? If so, how did it work out and how were the stipulations? Just curious because I have gotten some conflicting information from some people.

yes, i've closed a 1m+ round for an internet company
...it was pretty straight forward because we came through a referral and a strong endorsement
to answer your question, in a general sense, I don't like venture capitalists and I think this form of finance is more destructive than not. of course, I reserve a range of exception to the above...it's not an appropriate form of finance for anyone who hasn't been around the block...although it's pretty good if you've had a prior exit and can afford to buy a decent stake in your startup

**CIsaac** · 04-30-2008 02:57 PM

Thanks Akula. Your straightforward answer helped a lot. Your answer is has in it part of what the conflicting answers I've received have--the concern about ownership stake in the company. Most of the clients I deal with are first and second business owners and young entrepreneurs who have not been exposed yet to VC firms but have some interest and I've just been doing a lot of research (through VC alliances, surveys, content search, background, etc) to decipher when it makes sense and when it doesn't.

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**capforge** · 04-30-2008 05:50 PM

In my opinion, it makes sense every time A) VC is an option, and B) you have absolutely no other viable options to accomplish the same result. In any other case, avoid it like the plague.

**ChrisBenjamin** · 05-17-2008 12:47 AM

I've raised about $12M+ thru VC's for clients. Fun process. Little bit elusive for the every day entrepreneur, but if you find the right VC that your project catches their interest, it can happen.

Agree with akula, it's not for everyone, and it is really only for those who've been around the block. Not only that, they probably won't even talk to you unless you've been around the block and have some experience. They are investing in your company and in YOU to run it (or the management team as a whole I should say) so they want some experience there, not just a good idea.

**GlobalIT** · 05-26-2008 10:52 PM

If you get into VC you better know what you are doing. They can take everything you worked hard for. But in some few instances VC has help many of companies grow. I have stayed way from VC and only use it as a last resort financial option. If you do use VC make sure to pick one that will add value to your business and not just money.