Recently, Newser.com, the news site founded by Vanity Fair media columnist Michael Wolff and entrepreneur Patrick Spain, landed $2.5 million
Freelance Writer, Business Insider
Recently, Newser.com, the news site founded by Vanity Fair media columnist Michael Wolff and entrepreneur Patrick Spain, landed $2.5 million in its first round of financing. Since Spain and Wolff are well known in the tech and media worlds, they had a running start in rounding up financing. For those of us who aren’t media elites, getting the attention of so-called angel investors might be a harder. But not impossible.
The National Venture Capital Association estimates that of every 100 business plans a venture firm receives, 10 get a serious look, and one gets funded. Still, in 2007 there were 3,813 deals that totaled $29.4 billion, according to the PricewaterhouseCoopers/National Venture Capital Assn. MoneyTree Report.
“The most important thing to remember is investors invest in two things: product and people,” says Keith Zakheim, the president of Beckerman Public Relations and an advisor to small business clients seeking funding.
Venture firms focus their investments on the handful of industries where explosive growth is possible. Biotech and medical devices made up 23% of 2007's venture deals, according to the MoneyTree Report. An additional 24% went to software companies. Location counts. California is home to 41% of the companies VCs funded in 2007. 13% were in New England.
Here are some guidelines to nailing down financing.
• The product. Is there a market for it? What are the margins? What is the competition? Are there early adopters in place? Is it an existing market segment or a pioneer?
• Sell yourself. Have you been involved in a success story? Is there media coverage? People want to invest in a winner and media coverage suggests a winning business.
• Pay attention. Does the brand exude excitement, growth, and success?
• Plan. Not every company has a superstar that will steward the ship and a marketing plan that will enable an angel investor to realize bountiful rewards. But every company has a PowerPoint, a business plan, and projections.
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