Gordon has covered venture capital a few times recently on his blog. His blog is the one entitled The Scottish Entrepreneurial Input lower down on the right hand side of my blog.The question SMEs often have is whether or not they can access venture capital. The answer is yes, but it is not that simple.
The questions you need to think through and have answers to, are as follows.Do I have a good management team in place? Remember that Venture Capitalists (VC's) do not staff your business. Do I have a vision that is very big in scope?
VC's are not looking for deals to invest in much under the US$1million mark if not US$10million in som cases. They are looking to invest big money in return for even bigger returns. They are wanting a product or service with mass appeal and the ability to have a long product lifecycle, or a product or service which is essentially unique and which will command a premium.Am I prepared to sell it all in the next five years? VC's do not hold businesses for long periods. They want to get in and out, either through the sale of the business or a public offering/listing.These three questions are all that often keep the entrepreneur out of the VC funding race. Most entrepreneurs cannot answer these questions the way a VC wants them answered.These three requirements generally demand a major shift in the thinking of the average entrepeneur. Have you got what it takes?