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    Thinking Like a Venture Capitalist

    The best way to secure the venture capital financing you need for a new business is by thoroughly understanding the way venture capitalists think. When you understand their thought processes and what motivates their decisions, you are better equipped to present them with a winning business plan.

    No matter what your reason to start your new business, whether it is purely for your own financial gain, or to make life better for the world, you need to present your business to the venture capitalist as a money maker. After all, the venture capitalist is looking to make money off of their investment, not help others. You may have wonderful dreams about your business, dreams that are dear to you, but as harsh as it may sound, your potential investors do not care. They want to get a high return for their investment.

    One thing they will look at when looking at your business is you. They will only have you to look to as a representative of the business. As such, you need to present yourself as a professional, with an eye for detail. Do not appear at any interviews without giving ample time to your appearance. You will likely be rejected if you are messy, wrinkled, and otherwise disheveled. Also, you need to be approachable in your demeanor. Part of venture capital financing involves having the investor as part owner of your new company. As such, they may have suggestions for you, and they need to feel that you will listen.

    When the venture capitalist looks at you and your business, they are looking to see the investment potential. If they see that they will make money from investing in your business, they will. If they cannot see the potential, you will be rejected. Your goal should be to make them see the potential.

    If you are having trouble thinking clearly about your business, you may want to have another business person look at your proposal. If you have an emotional connection to the business, then you might have trouble looking at your proposal with a clear mind. But remember, the venture capital firm is not going to share your dreams, and they are going to look over your proposal with a very scrutinizing eye. Getting two or three opinions about your business plan will save you time that you would waste a poorly written plan to the venture capitalist of your choice.

    So remember, the venture capitalist is thinking of one thing and one thing only, and that is the bottom line. Your job is to convince the investor that you and your business are a good investment with a reasonable amount of risk. If you can do this properly, you will likely land the venture capital that you need. The key is to look at your proposal from the eyes of your potential investor.

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