Venture Financing:

Step-by-step Guide

Venture Capital (VC) Basics

 

By Venture Planning Associates. Used by permission.

 

 

 

Did you know, that there is more money looking for "a good deal" than there are "good deals" looking for money?

3Ws of Venture Investing

Venture Planning Associates, a business planning and venture capital consulting business in Honolulu, was founded in 1989.  VPA specializes in assisting disruptive entrepreneurs and start up companies with financing and assisting them in becoming profitable enterprises

Many entrepreneurs Download PowerPoint presentation, pdf e-book would receive more serious consideration from investors and financial angels if they would realize that they are selling a financial package to the financial marketplace, rather than their product or service to a consumer.

The goal of every business plan should be to address upside potential, downside risk, management, potential dilution, and liquidity issues.  >>>

Investors are constantly comparing one investment against another and ranking them in numerous categories >>>

Team & Venture Assessment by using Innovation Football game

To properly evaluate your own project, VPA recommends that entrepreneurs put themselves in the place of investors, who want to know the answers to these six simple questions:

Documentation

To attract and hold investor interest, the business must provide top quality documentation: 

Basic Elements of a Good Deal

There are six basic elements that will entice an investor to take a serious look at your project.  They are:

  • Do I like the feel of this project, its market area, and its management team?

  • Will I get my capital back off the top? (hopefully not off  the bottom)

  • Is there a big upside potential?  Stock conversions, possible IPO, early payouts, etc.?

  • What assurances will I have that the business plan will be followed and can be executed?

  • How will I be involved? Director, consultant, officer, employee?

  • What other opportunities are there available that is better than this one?

Critical Deal Criteria

  • Early investor return of capital.

  • Premium paid for the risks involved.

  • Kickers or other incentives not necessarily monetary in nature.

  • Options to increase equity share or liquidate early.

  • Tax and legal considerations including state securities laws.

  • Is the entrepreneur being adequately compensated so that he remains focused on the business and can afford to live during the startup stage?