What to Consider Before Seeking Venture Capital

Dr. Lindsay Rosenwald maintains expertise in several areas of finance, from direct investing to venture capital. Today, many entrepreneurs, like Dr. Lindsay Rosenwald, turn to venture capitalists for the money they need to realize their ideas. Before seeking funding, however, they must consider several factors.

First, entrepreneurs must have a clear market for their product and be able to demonstrate to investors how and why the product or service will generate money. Some ideas that sound great on paper simply lack a viable market, thus making them unlikely to receive funding. Additionally, the market must be large enough to attract substantial revenue. Venture investors typically look for markets of a certain size before they will even consider putting money into a new idea.

Entrepreneurs should gather a team of experienced, knowledgeable managers capable of developing the envisioned business, particularly when asking for funding at a later stage of the enterprise. When leaders can point to the past successes of team members and clearly spell out their contribution to the current project, they will more likely convince a venture capitalist to invest in the plan.

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