#9 from 10 – The FREE course for raising capital from VC firms and angel investors

How to identify the right VC firm or angel investor

There are thousands or even more venture capital firms all over the globe and maybe even more angel investors. They do not look for the same thing and each one of them has a different behavior and preference when it comes to investing. A lot of entrepreneurs waste valuable time and eventually fail to identify the right investor. There are certain factors you must know about before searching for a venture capitalist.

Investors in most of the cases do not invest further than 200 miles from the place they work. They invest close to their location to be able to get involved and analyze the potential of the venture correctly. There are exceptions, of course.

Most investors will only invest in certain sectors they are experts in and can carefully asses the market situation. Even if your company is outstanding if the VC partners don’t know much about the sector you activate in, they will not invest in you.

We have talked about the stage preference of the VC firms. Each firm prefers one or two stages depending on how much risk they are comfortable in handling. If the risk is great the potential return in high and some angel investors and venture capitalist like that, but other do not.

The experience and knowledge of the partners is critical. They tend to invest only in what they know. If the partner has experience in your industry, you can consider yourself lucky. The companies that are most likely to invest in you are the ones that have invested previously in ventures similar to yours. If they have a portfolio like that, you should contact them.

Look for angel investors and venture capitalists, which have deep pockets and can deliver multiple rounds of funding. It is easier to get funded by the firm that funded you already than going around finding another one.

A very important thing not many people emphasize is to fit with your future investors and partners. You will work together to grow the company and you will see them often and make decisions together. Make sure you are after the same things and that you do not have very different personalities.

As you may have already realized finding the right investor is not as easy as it sounds. You have to have a strong database of investors and somehow be able to select only the ones who are more likely to invest in your venture. To make things a lot easier you should get the VCReporter database, which includes over 4300 updated contacts of venture capitalist funds all over the world. You will save huge amounts of time by selecting the right investor by the stage of development they are likely to invest in, their location or the industry they prefer. Think about how much time and legwork this would require if you would do it by yourself. You do not want to wait that long to use that rocking teaser email you have done.

Get the VCReporter software or try it free right now and do not forget to read the next newsletter to find out how you can identify the right partner from an investment fund and create your own list of investors.