Growth Stage

The last stage, sometimes called "growth," includes strategies for the investors to exit the enterprise, collecting their financial returns or mitigating their losses as they go.  In each of these stages, conventional wisdom counsels against using a "finder."  Finders often call themselves venture capitalists, consultants, investment bankers, lawyers, accountants, or business advisers.  Sometimes they will help with writing the business plan, management-team recruitment, or in establishing a Board of Directors.  However, they can come at high price tag, and the work may be that which the entrepreneur could produce her or himself.

What Do Investors Want?

In order to find venture capitalists or other investors who are willing to invest in a "brilliant idea," it is important to understand the transaction from the investor's point of view.   That is, what do they want from the deal?  Generally, they want a sound, long-term capital gain on their investment.  This translates into adequate rewards for the level of risk they are willing to take.  If the investor is a family member or friend, pride in the enterprise might be an intangible side benefit of the deal. Venture capitalists and other investors want a great deal of information prior to signing on to a project.  They will want specific guarantees, and often will require contractual language that allows them to "take over" if the project does not proceed according to plan.   In return, they contribute capital, business skills and expertise to the enterprise.           

Selling the Plan

To be able to convince an investor that a company is an economic winner, one must have several factors firmly in place:  First, the company will need an excellent business plan that gives a clear description of the product or service offered and of the targeted purchasers.  The business plan must describe the size and nature of the projected market and must provide a detailed discussion of the business operations needed to reach that market.  It should include biographies of key management personnel, executive compensation schemes and option plans, as well as a discussion of other staffing needs. The assistance of an experienced attorney may be helpful when developing this very important document.