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Saturday, October 18, 2003
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Site Offers Fundraising Lesson for Small and Midsize Businesses
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VFinance is one of the best online sources for entrepreneurs, startups and existing businesses to raise capital. In fact, according to Yahoo, it's THE best.
vFinance targets business owners who see opportunity but can't go after it due to lack of capital. The site claims to have a database of over 1,600 venture firms and 60,000 angel investors. In addition to providing information on equity investment (venture and angel), the site also offers access to lending sources.
One of the most helpful features of the site is the VC Quiz. In 20 questions the Quiz tells an entrepreneur or business owner how venture capitalists assess business opportunities. There is a charge of $19.95 to get the completed Quiz results. But business owners can gain tremendous insight into the VC mindset just by taking the Quiz, even without receiving the emailed final report.
The Quiz comes across loud and clear with a message I find myself repeating over and over to entrepreneurs and small business people: In the current climate, an opportunity has to be quite large, market leading, and offer huge potential returns in order to interest VCs.
The truth is, small businesses do not interest VCs. If there isn't a $500 Million market for which you have a plan to capture majority market share within 4 or 5 years, a VC will not consider your opportunity a good use of VC investment capital. VCs are not in the business of seeking modest returns on modest proposals.
Small businesses--and startups that have the potential to grow into nothing bigger than small or midsize businesses--are better off approaching family and friends, local angels (if you can find them), and lenders. It's no longer the 1990's, when venture money was given away like M&Ms to trick-or-treaters. Those days are long past.
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By Anita Campbell | Permalink |
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More news... more trends... more insight... |
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