"Show me the money!"
entrepreneurship blog – Post 8 
                                                             

Raising money for your venture demands a different kind of patience from the professional patience we’re used to in our work, whether salaried or freelance.
It’s a bit like a battlefield.  You train for months for an encounter that could be decided in 15 minutes.  To be successful, you must make sure you prepare properly.
You must also put aside sufficient economic resources to win over potential investors – you’ll need the cash flow of the venture, but you’ll also dig deep into your own pockets.
In an ideal world the venture would be automatically financed by the state, the extended family (including grandma), your meager savings, and your dream list of philanthropists who believe in you as much as you believe in yourself.  If there are any such investors within your reach, that’s the first place you should go bearing your business plan.  (Without a proper business plan, even the most favorably inclined investors won’t want to waste their time or their money.)
If these avenues are exhausted, then you have to look further afield for your investors.  There are lots of options:

·         Private investors (angels) who you can find through family and friends, or through private brokers.

·         Organizations such as “angels’ clubs” – groups of private investors.

·         Government backed R&D programs financed by the Chief Scientist.

·         Venture capital funds (we’ll have more to say about these later).

·         Partnerships with strategic partners or complementary companies overseas, etc.
Obviously the amount of investment and involvement you will get from each of the above changes and is related to the subject matter, the individual needs and the venture’s maturity.

Time
The process of raising money is longer than you’d expect, between 3 and 6 months.  To find the proper match you need research, to fill out your business model and show a clear strategy, and intensive networking.  An investor who understands the industry will generally be more open to the idea of investment.
Once you have an interested investor, or one who has a weakness for the field, you must seize the opportunity and prepare the ground for a meeting!
Timing is critical.  Investors are often looking for openings into particular areas.  For example, in our case the words Web 2.0 proved to be the buzz words currently interesting many old and new Internet investors.
The window of opportunity for Web 2.0 internet ventures is narrow.  The whole market is aware of it, so if you get to the investors who have their hands on the pulse, that will be very helpful for raising finance.  (Timing as we said is critical:  if you get to an investor who has just invested in something similar, he probably won’t be particularly interested in your idea.  We found that out the hard way in our dealings with venture capital funds.)

Capital raising plans
Without a proper capital raising plan, suitable for the stage of your venture, you won’t get far.  But here there’s an obvious conflict:
On one hand, you want to increase the value of your company before you get to investors.  The more developed it is in terms of the team, the product, the customer base and future plans, the more attractive it is likely to be to an investor.    This requires a lot of planning and preparation.
On the other hand, as I said, the window of opportunity is small, and the entrepreneur who is striving to improve his cost tables, could be sucked into the research and preparation process and miss the chance.  You must be alert and sensitive in order to know when to cut the umbilical cord and go out into the world to meet investors.

More to come…