Early-stage VC Funds

Each startup founder has two objectives – to grow big and to grow fast. Early-stage financing is appropriate for startups which generate some revenue but need additional funds to support their growth and capture a large market share. Here we have discussed why you should choose Early-stage VC funds for your startup.

What Are Early-Stage Venture Capital Funds?

 Venture capital funding is one of the most popular methods of financing for startups. Private investors and financial institutions generally fund VC. Early-stage VC funds include three subdivisions like first stage financing, seed financing, and startup financing.

  • Startup financing – It  provides funds for expenses related to product development and marketing
  • Seed financing – it refers  to low-level financing needed to prove and fructify a  new idea
  • First stage financing – it refers to funding provided to startups that have utilized all capital and need funds to start the business at a full scale.

Advantages of VC Funding

  • It brings expertise and wealth to the company
  • The startup does not have an obligation to repay the money
  • It provides a large amount of equity finance 
  • Besides capital, it also offers valuable resources of information, expertise, and technical assistance to make the business successful.

Now that you know the advantages of VC funding let’s know about the different steps to get it.

Idea

Not every startup is suitable for VC funding. It would help if you had a great business idea to start. Venture capital firms are known to invest in highly scalable, early-stage startups that are poise for growth. These businesses grow fast, capture considerable market share, and then go public through an IPO.

Pitch

Pitch deck refers to the first marketing collateral you will share with a venture capital firm. It can be emailed to the firm, but the best way is a warm-introduction of the startup and the business idea behind it. Pitch decks at Early-stages are conceptual, whereas later stages are more complex based on KPIs such as traffic, engagement, and revenue.

Meetings 

To get financial support, you need to meet the VC firm partners. You can mail the pitch deck to the VC firm to score a meeting.  Not all Early-stage VC funds are right for your business. Hence, it would be best if you found the right fit before sending the pitch deck. After you have found the right VCs, you can use your network referrals to score a meeting. The last resort is cold emailing the VC firm.

Securing an appointment can take a long time as all have different times of appointments. If you have a great business idea and a good network, you can set up an initial appointment in a few weeks. You can target specific partners of VC firms and give a direct intro.

Due Diligence 

Suppose the first Venture Capital meeting is successful. In that case, you need to plan additional meetings to set things in place and start the due diligence approach. 

According to VC funding experts, all VC firms follow a due diligence approach where they review different aspects of the startup like industry, market, product, founding team, the project’s financial viability, and the company’s earning power. If everything goes well, you will receive a proposed plan for funding.

Early-stage Venture Capital funds provide you with the capital essential to market your products. It allows startups to capture a large market share that puts it on the fast track of growth.

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