As business owner, you sure want to grow your business day by day. However, in business development process, funding is very critical. Besides lending from financial institutions, equity financing is also one of the very common solutions.

From time to time, I read from various sources that newly set-up businesses or those arranging initial public offering (IPO), operations developed speedily because venture capitalists are interested in their businesses. These success stories might even become industry leaders or cash cows for the owners. Thus, many people with “great ideas” always eager to meet the venture capitalist, they want to show off their “great ideas” for funding. However, even though they thought they are well prepared with smart and detailed business plan, when they have a chance to meet the venture capitalist, they will not be able to get their money. Was that because of the “idea”? Or the venture capitalist they met are not willing to take the risks?

In fact, the ultimate reason is on the existing business, it is not “attractive” enough for the venture capitalist. Also, many business owners wrongly think that approaching venture capitalists is the only way for business growth.

Entrepreneurs misunderstood that once they got the funding from venture capitalists, all the original issues related to the business operations will be solved. During the business plan presentations, they will suggest to clone the operation model repeatedly to push revenue once they receive the venture capital. Or, entrepreneurs would suggest launching a mega promotion plan for branding and business development. Even more aggressive, some business owners would suggest using the funding for merger and acquisition so as to grow the business as soon as possible. They thought that they will be able to bit the competitors and increase market share immediately with their great ideas.

Babara Clark

Babara Clark

Babara Clark
Beijing, China

Free Member, Joined :10/05/2010
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