How to Win Venture Capital

The process of selecting, pitching and ultimately negotiating with a VC can be intimidating, especially to those not accustomed to the world of high finance. I asked Lori Hoberman, head of Chadbourne & Parke LLP's emerging-companies/venture-capital practice in New York, to explain the various steps. Here's what she said:

Pinpoint the ideal VC.

First, an entrepreneur must target the right venture capital investment fund to pitch. That requires some research. It's a good idea to attend venture capital and private equity conferences. Ask an attorney or accountant for a referral. Online databases such as VentureSource (owned by Dow Jones) provide information on the latest venture deals. And most VCs host websites that describe their "sweet spot" and existing portfolio investments, Ms. Hoberman says. Don't waste time pitching your biodiesel fuel business to a VC that only invests in software.

Prepare a "teaser" document.

This one-or two-page document that you send to VCs is your way of introducing yourself—and it's got to be memorable. Tell the VC who you are, what need you fill in the market and how that market translates into dollars. Because most VCs are barraged with investment requests and can give each one only limited consideration, every sentence of your teaser needs to "answer the question about why an investor would ever dream of putting money into you," Ms. Hoberman advises. "It forces you, as the entrepreneur, to think in sound bites." She recommends incorporating text and graphics (pictures, pie charts or graphs) into the document. "The whole idea is to tease the investor into wanting to hear more," she says.

To read the full, original article click on this link: How to Win Venture Capital - WSJ.com

Author: COLLEEN DEBAISE