Can You Find Venture Capital in 2010?
For most business niches, 2010 couldn’t come fast enough. 2007 was not great. 2008 was really scary. 2009 was less scary and more a brutal grind despite what technically appears to be economic recovery. So, what does 2010 portend when we look at the field of venture capital? Let’s take a look.
Venture capital firms have hardly been exempt from the demolition derby known as our economy the last few years. Mergers and failures have happened and they will continue. This is because venture capital firms are looking for funding from investors to fund, well, your business. 2009 was a year when even a great idea like Google would have been hard pressed to get a cash infusion. Credit markets are tied up and banks aren’t loaning a red penny.
Unfortunately, 2010 appears like it will be more of the same. The credit markets will have to loosen up at some point, but most believe it will be later in the year if not in to 2011. The concerns about housing and employment that are making financial markets nervous are not going away. Real estate looks particularly troubling as any momentum in residential will be threatened when the first-time homebuyers tax credit expires in the second quarter. At the same time, the commercial real estate market is going from bad to worse. With even the most optimistic expecting unemployment to remain a major issue through the year, 2010 is shaping up to be tough. I hope I am wrong, but venture capital will be impacted by what happens regardless.
The good news is all venture capital firms want to invest. This is because investing in startups and small businesses is what they do. The only question is if they will have the funds to do so. Some will. The key is to find them. This must be done by finding the venture capitalist that is in harmony with your business.
Your first step is to research, research and research. You want to approach only firms and angels that have shown a keen interest in the exact niche you are mining. You might have the greatest smart phone program in the world, but approaching a VC fund that is interested in hardware technologies isn’t gong to get you anywhere. Be as specific as you can because “worried money” is going to stick to what it knows.
If you have a successful history with investors, emphasize that. Everyone is very risk sensitive. If you’ve shown you’re a successful bet in the past, make sure that those you are approaching are full aware of that. This is one market where what you’ve done lately is almost matched by what you did in the past.
Finally, consider cutting your program back and funding amount requested. This is a tough market. There is not a lot of optimism. Asking for smaller funding amounts is, again, a method for limiting the risk that is being faced by the venture capital fund and its investors. You can then map out a plan where things speed up in two to three years when markets are positive and funding is much more readily available.
I would love to tell you things will be wonderful in the venture capital market in 2010. Maybe the will, but I really doubt it. That doesn’t mean you can’t get funding. It is just going to be more of a challenge.
Author: Thomas Ajava
Article Source: EzineArticles.com
Provided by: Make PCB Assembly
