Rich Russakoff and the team of Bottom Line Consultant experts will answer your business questions on this page. If you would like to submit a question, you may:

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Question: What's the best way to find venture capital for my new business?

Answer: Finding venture capital for a new business is difficult. However finding venture capital for a new concept or an innovative idea that fires the imagination and shows strong upside potential has a much better chance.

Most start up businesses reach out to their family, friends and former business associates for capital. In addition a good place to acquire venture capital is from vendors or clients who would directly benefit from the products or services your business offers.

New businesses in high tech areas such as the Internet or biotech are going to attract a wider range of initial interest. Virtually every city in America has Venture Capital clubs, consultants, and accounting and law firms who specialize in assisting companies find venture capital. There is a cost for these services, but they offer great guidance and more importantly have contacts with prospective investors. In addition there are dozens of books and hundreds of articles available on funding startups. Do some research.

Another way to find sources for venture capital is to set up an advisory board of business owners, professionals and others who can open doors for you. Even if these efforts don't initially lead to financing, these investors will certainly watch your performance and may be willing to loan you money after you have demonstrated that you can turn your plan into reality.

Your ticket to get anyone's attention is a dynamic, well-written, professionally prepared and well thought out business plan. If you do not have a high caliber business plan, no one will take you seriously or give you the time of day. It is an essential tool for both growing and starting a business.

It is a selling document. As your ticket of admission to venture capital, your plan is intended to sell the stakeholders in the business. The plan should make it easy to understand your future, describe where you've come from, where you're going, address potential problems and strategies, and outline how you deal with adversity.

What the Business Plan will accomplish for you:

• It defines your mission or niche in the marketplace.
• It presents a vision of what the business can accomplish if it is successful.
• It demonstrates you can track your money.
• It illustrates how well thought out your strategies are and how you are prepared to deal with adversity if it arises.
• It outlines specifically what you are going to do and how you will accomplish it.
• It identifies the resources you will need and how you will access the capital to acquire them.
• It projects where you will be in three to five years and what additional challenges you will face.
• It shows you can organize your ideas in writing.

Here are some of the things you should be aware of that turn Venture Capitalists on:

• Choosing a field you understand.
• Starting smaller rather than larger.
• A clear business plan with realistic projections showing revenues, expenses and an appealing bottom line.
• A solid oral presentation. (You don't have to make it.)
• A mission.
• A clearly defined market niche and marketing plan.
• Evidence that you have clearly researched and even tested your market.
• Evidence of professional assistance.
• A long range strategic plan.
• A back-up or "what if" plan?
• Investors are not interested in how much good your product or service will do, but how much money it will make.

Venture Capitalist may also require:

• High growth opportunities which will yield returns of 30%
• A percentage of the company, in many cases as high as 51% which will give them controlling interest
• A seat on the board of directors and a strong voice in management decisions
• An exit strategy such as an IPO or a sale to another company so they can cash out

In conclusion, a strategic approach to winning over potential investors includes:

• Aggressively and persistently shopping your proposal and looking for more than one investor.
• Looking for seed money to continue your research and development costs.
• Asking potential investors their interest level.
• Asking for constructive criticism.
• Pre-testing your proposal.
• Consider the use of a consultant to help make your proposals.

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