Venture investors: alien or human - part 2.

KNOWING SOMETHING ABOUT VENTURE venture capital fund managers can help you plan your venture fundraising campaign. It can also help you negotiate and work more constructively with investors in your business. 

Consider the following factors that influence the average venture capital fund manager:

• They receive thousands of pitches, most of which do not fit their plan. Many of the plans they see do not fit any rational person's investment plan. 
• Their resources are limited. Their staffs are small. They have to screen plans quickly to survive.
• Their upside is tied directly to the success of the companies they invest in. It's called carried interest. Mistakes are costly to them. Unsuccessful portfolio companies drag down their fund returns and reduce their carried interest.
• They invest OPM - other people's money. So they are accountable to others for their success or failure. If they are not successful, their investors will desert them. 
• They have to keep raising new money to invest. Most have to return money to their investors as their investments mature.

There is more about this topic in Richardson's Growth Company Guide 5.0 ​but even this partial list provides some insight into your potential venture fund investor and future board member.

A few observations pop out from this partial list. Do your homework and screen the funds you can as best as you can. Do they invest in your market or your stage of investment? Do they have money or are they in fundraising mode? 

​And, have you prepared a convincing deck and a worthy written plan to back it up? Think about how can you tailor your approach to stand out among the many who apply? Do you know someone who can make and introduction and increase their interest in considering your company?

​Image from Roswell, NM. Copyright Clinton Richardson.