Successfully connecting with venture capitalist can be an exciting time for an entrepreneur who’s trying to raise capital for their up and coming start-up, however this now means they’re progressing to the next stage in obtaining their funding: negotiating. Negotiations can be a daunting process, especially for a new entrepreneur who hasn’t gone through the process before. Here are three tips to keep in mind when negotiating with venture capitalists.
Treat the negotiation as a partnership
When negotiating with venture capitalists, treating them like a partner will bring about better results than treating them as an adversary. You need to keep the negotiation process friendly, while still being firm with the terms you’re proposing. Reaching an agreement will be easier when you consider that the VC is there to help your company, not take it over.
Have a good lawyer
Having good legal representation is always a smart decision when trying to negotiate a deal. Find an attorney who has previous experience handling venture capital funding, and who’s able to point out potential hazards in a deal and suggest how to best handle the negotiation process.
Don’t negotiate when you’re desperate for capital
If you’re in dire need for capital, you’re at a real disadvantage at the negotiating table. When you’re desperate for a VCs help, you are more likely to be willing to give up too much in the negotiations, leaving you with a deal that doesn’t benefit your company as well as you’d wanted.
You have a great idea, a catchy name, and the ambition and drive to launch your dream business – but you’re missing the cash. Financing a start-up is an uphill battle, and there’s no secret that it’s getting harder to get funding in the current financial climate. However, just because it’ll be a fight, doesn’t mean your idea isn’t worth fighting for. Here are three ways you can finance your start-up:
Yes, people can and often do use credit cards to finance their business in it’s earliest stages, and the reason being is for the immediate access to needed items and cash advances. However when financing your business with credit cards, you need to take into consideration whether or not you can afford to pay off the monthly balance.
This is often thought of as the go-to option for early-stage business financing. Many small businesses are finding success with bank loans, as long as their credit score is good and they can convince the banks that they’ll make a profit and pay their loans back.
Crowdfunding is a fairly new and increasingly popular option that people are going with to fund new business ideas. Entrepreneurs often use crowdfunding platforms (like Kickstarter and GoFundMe) to raise money from a crowd of individuals. This process often cuts out professional investors and institutions by putting the funding in the hands of regular people. Depending on the appeal and popularity of your idea, crowdfunding is a fantastic method of turning your great idea into a great business.
To be a successful entrepreneur, you’ll need to be able to quickly adapt to low-level, day-to-day changes and challenges while also maintaining a big picture philosophy that serves as the foundation for your daily decisions. Without strictly adhering to your most high-level priorities, your entire business strategy runs the risk of falling apart. Here are three fundamental entrepreneurial priorities:
Though it may sound surprising, many entrepreneurs get into the game without any real monetary desires, which there isn’t really anything wrong with. However some people lose sight of the importance of profitability in favour of growing their business. Even the business was started for non-monetary reasons, profitability is still vital in the sustainability of the business; without profit coming in, you’ll be unable to improve the business and invest in its future. Profitability isn’t everything, but it’s certainly an aspect that every entrepreneur needs to consider when pursuing any new venture.
Constant improvement should be one of your top priorities as an entrepreneur. Consumers, economies, and businesses never stay the same for very long, so you need to ensure that you’re gradually adapting your business. To stay relevant in any market, you need to improve your product and service, keeping it fresh and unique. Only the adaptable can survive the constantly evolving market landscape.
Innovation should always be first priority, and it must be kept at the forefront of your mind during the entire course of your businesses development; without innovation, there’s nothing to distinguish your business from your competition. Furthermore, innovation doesn’t necessarily require you to come up with an entirely new idea. It could involve combining two complementary, previously independent ideas together to create a superior product/service. However you choose to innovate is up to you, but it must always be your number one entrepreneurial priority.