How To Raise Venture Capital for Your Startup

Venture Financing Chain





High-growth ventures demand an unbroken financing chain, from pre-seed capital to stock market. High-growth start-ups usually go through multiple funding rounds. The financing chain is no stronger than its weakest link.

  Venture Financing Gestation Stage Inception Stage Prototype Roll-Out Stage Growth Stage Expansion Stage Maturity Stage Founders: Bootstrapping Methods Business Angels Corporate Investing in External Ventures Venture Acquisitons IPO Venture Capital Firms Dealing with Banks Venture Management Venture Financing Revenue Model VC Investors Venture Funding Stages Venture Financing Chain, Venture Financing Curve: Sources of Funds for High-Growth Firms




Equity financing conventionally follows the below trajectory:

▪ founders, friends & family (the "3Fs", sometimes spelled out as "founders, friends & fools"), or bootstrapping phase;

business angels;

venture capital (VC); and

▪ initial public offering (IPO) or mergers & acquisitions (M&A).




The Critical Role of Your Business Model

Many venture capitalists see themselves as investing in a business model. Consequently it often is the venture capital investor that pushes for a change in the business model when it becomes apparent that the original model is not working.


Venture Financing

Step-by-Step Guide to Venture Financing

Yin-Yang of Venture Financing




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Banks are businesses too.  They have stockholders to whom they must report and they are highly regulated by federal and state agencies. You must prepare a comprehensive documentation if you to obtain a commercial loan for your venture... More


Debt vs. Equity

4Cs of Commercial Lending

What Banks Look For

Credit Rating




Vadim Kotelnikov advice quotes

Give innovative entrepreneurs a venture capital fund, and you'll feed few of them for a while. Give innovative entrepreneurs Innompic Games, and you'll feed all of them for centuries ahead!

Vadim Kotelnikov

Vadim Kotelnikov, founder of 1000ventures - personal logo    Business e-Coach    Innompic Games icon





Yin-Yan of Venture Financing

Venture Funding Stages

Getting Funding

Step-By-Step Guide

Ways to Finance Your Startup

Select Investors

Startup Pitch for Investors

  6Ws  |  10 Tips









"You may know where the market is going, but you can't possibly know where it's going after that." ~ Heisenberg Principle of Investment



Startup Business Plan


Bootstrapping is a means of financing a small firm through highly creative acquisition and use of resources without raising equity from traditional sources or borrowing money from a bank. It is characterized by high reliance on any internally generated retained earnings, credit cards, second mortgages, and customer advances, to name but a few sources.

Bootstrapping is the most likely source of initial equity for more than 90% of technology based firms. It offers many advantages for entrepreneurs Download PowerPoint presentation, pdf e-book and is probably the best method to get an entrepreneurial firm operating and well positioned to seek equity capital from outside investors at a later time. The entrepreneurs should learn bootstrapping options and practice bootstrapping strategies to be able to bridge successfully the equity gap... More

Mergers and Acquisitions

The role of mergers and acquisitions had evolved as a strategy tool for fast-track technology-led companies. Any pure technology company looking to get funded that views an acquisition strategy as a likely outcome, ideally needs to position itself to fill a future technology need that more than one major company is likely to fight for. The short-term technologic advantage realized by start-ups may be best exploited by seeking a merger partner... More

The Iceberg Principle

The Iceberg of Opportunities' Principle, which our Business e-Coach is to help you reverse, illustrates a tremendous potential for bridging the equity gap - the gap between venture capital (VC) sough by start-up firms and VC available with prospective investors, but not used. To illustrate:

  • VC receiver side. Only 6 out of 1000 innovative ideas get funded by venture investors on an average. The main reason for rejection is that though first-time entrepreneurs may have great technology or business ideas they lack skills for converting these ideas into a successful business. To venture capitalists, "ideas are a dime a dozen: only execution skills count."

3Ws of Venture Investing

  • VC supplier side. The size of the angel market could potentially become 10 to 20 times larger, however. It is estimated that only 7% of potential business angels invest in start-up ventures. The remaining 93% are virgin angels who would like to invest but don't do it for a number of reasons, which include lack of proposals matching their investment criteria, lack of quality business proposals, lack of trust in the entrepreneur Download PowerPoint presentation, pdf e-book or management team, underdeveloped strategy that should have a strong sustainable competitive advantage Download PowerPoint presentation, pdf e-book, lack of experience in valuating and pricing deals, and lack of experience in due diligence and monitoring.

This equity gap is seen as a problem by many, but this gap is also full of opportunities >>>

Business Angels

Business angels are a source of pre-revenue seed funding and management guidance for start-ups.  Business angels are wealthy individual investors - usually, people who have made their own money as entrepreneurs. Better equipped and more flexible than banks and most capital funds to assess the potential of very young business, they contribute not only equity but also much needed business expertise, offering company hands-on support and advice. Angels bridge the gap between the personal savings of entrepreneurs and the 'early stage' or 'second round' financing which venture capitalists are able to offer... More

Venture Capital Firms

Venture investing is a process by which investors fund early stage, more risk-oriented ventures. Being a principal funding source, venture capital can not finance innovation on its own. Too many VC firms remain unwilling to invest in high-tech start-ups in the early stage, often because they lack the investment appraisal capacity to act as the "first investor". To be fully effective, venture capital must form part of an unbroken investment chain, from seed capital to stock market.

To target and pursue the appropriate professional venture capital providers, it is a must for the venture capital seeker to understand their investment strategy and preferences... More

Corporate Investing

Corporations are a major - and rapidly growing - source of funds for new ventures. In today's new entrepreneurial economy, the real shareholder value is created by companies whose corporate strategies include well-developed venture strategies.

Partnership between small innovative firms and large corporation is mutually beneficial. While entrepreneurial companies can discover  technology and market opportunities and move faster to capitalize on them, they can achieve enormous leverage through technology and distribution agreements with large global corporations... More

By now, spinouts, a new form of creating and financing a high-tech company has become more popular. This novel approach has a number of advantages over a merger or acquisition and it plays an increasingly high role for high-tech companies... More


Stock Markets

Stock markets for high growth companies stimulate venture capital activity by offering an 'exit route' of flotation. They offer a means for venture capital funds to realize a return on investment in new companies. Compared with other exit routes, typically an Initial Public Offering (IPO) realizes the greatest return on investment.