Just because you have an idea does not necessarily mean you are ready for venture capital funding. The overwhelming majority of the time, a start-up in early stage development does not actually need the money.
Before you seek out funding of any nature, make sure you have a product and know the end user. You must know the business better than the person you are pitching it to because it will be picked apart before you can even get a word out of your mouth.
While you are concerned about prototypes and websites, be aware that raising venture capital is a job in and of itself. Be prepared for the long haul.
Focus on those venture capital funds that invest in your industry. Identify those venture capital firms that are looking for investment opportunities based on the stage of your business development and your business sector.
Make sure you understand your pitch and keep it streamlined. Try to anticipate questions and have back-up documentation ready for review.
Assuming you make it through the pitch, you can expect a thorough due diligence process and ultimately a term sheet. The term sheet will outline the amount of the investment, the return and the other business and management conditions the venture capital partner expects to see in a definitive agreement.
If you get funded, you can expect some level of involvement and dialogue from your venture capital partners. It's their money and they want to ensure they get it back.
There are number of other factors that one must consider before seeking out venture capital funding. This is just a quick overview to make sure you are considering the right issues.
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