How To Meet the Criteria of Initial Screening of Venture Proposals by Prospective VC investors


The Size of Your Venture Proposal

Most venture capital firms are interested in investment projects requiring an investment starting from $250,000. Startups requiring under $250,000 are of limited interest because of the high cost of investigation, due diligence and administration; however, some venture capital firms will consider smaller proposals if the investment is intriguing enough.



Elements of a Venture Proposal

Executive Summary of the What and Why of the Project

Purpose and Objectives: Your entrepreneurial vision and product vision.  What is your compelling 'Why?' and what do you want to achieve?

Proposed Financing: You must state the amount of money you will need from the beginning to the maturity of the project proposed, how the proceeds will be used, how you plan to structure the financing, and why the amount designated is required.



Marketing: Describe the market segment you've got or plan to get, the competition, the characteristics of the market, and your plans (with costs) for getting or holding the market segment you're aiming at.

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History of the Firm: Summarize the significant financial and organizational milestones,

Description of employees and employee relations, explanations of banking relationships, recounting of major services or products your firm has offered during its existence, and the like.

Description of the Product or Service: Include a full description of the product (process) or service offered by the firm and the costs associated with it in detail.  

Financial Statements: Include statements for both the past few years and pro forma projections (balance sheets, income statements, and cash flows) for the next three to five years, showing the effect anticipated if the project is undertaken and if the financing is secured. (This should include an analysis of key variables affecting financial performance, showing what could happen if the projected level of revenue is not attained.)

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Revenue Model

Capitalization: Provide a list of shareholders, how much is invested to date, and in what form (equity/debt).

Biographical Sketches: Describe the work histories and qualifications of key owners and employees.

Principal Suppliers and Customers, Problems Anticipated and Other Pertinent Information



Provide a candid discussion of any contingent liabilities, pending litigation, tax or patent difficulties, and any other contingencies that might affect the project you're proposing.

List the names, addresses and the telephone numbers of suppliers and customers; they will be contacted to verify your statement about payments (suppliers) and products (customers).

Provisions of the Investment Proposal.