Moird

Recently myself and a business partner were trying to get some venture capital funding for a project that we are working on.  The decision at the time to go for forward with the request was relatively simple, we did not have a lot already vested in the project at the time as it has gone through several different revisions up to the point before we even started pursuing that particular road.  The project however and the experience from attempting to get funding for the project however led to some insight that I wanted to share regarding the process and making successful pitches to VCs.  As our project failed to get funding there were a lot of lessons in the process.
First the decision to even try to go for Venture Capital (VC) funding is a tough decision at any stage in the idea of a project or company.  It is tough because most VCs are going to want a huge percentage of whatever it is you are wanting to work on.  For example a new company that is seeking VC funding may have relinquish over half of the company to the VC as part of the terms of the funding.  In other cases like the one that we were involved with we would have had very little in terms of ownership of the project.  However for some that is not as big of an issue so long as the idea can get worked on.  It is still a difficult decision to make and should involve a fair amount of research and some thought.  The thought is do you want to relinquish that much control over the idea? if by giving up that much involvement will the decisions revolving the idea be in the best interests of all parties involved or just the primary owner (be it that would likely be the VC and not the creators)?  Is the funding to work on the project absolutely necessary or can further progress be made with just an investment of time?  Are there other funding methods available that might work better without giving up so much control over the idea or the proposal and are these other methods feasible even if you don’t have a completed project or name for yourself?
Once the decision has been made to attempt to go for VC funding some research into who you are going to be approaching to make the pitch.  How approachable is this person/group for yourself.  Even though the general idea behind VC funding is to meet new people who have new ideas and listen to their pitches it doesn’t necessarily work out that way, all though it still can.  Also sending the just enough information initially to make them interested in hearing more about your idea and possibly even hearing the pitch for the idea.  Depending on the VC person/group this might be a requirement anyways to help filter out projects that possibly are not going to be interesting right from the beginning.  At least this was the case with the VC group we were presenting to, others might have different requirements for making initial contact regarding pitches and should be researched beforehand.  It is also important to find VCs that usually fund projects that are in a similar area as to what your idea is in.  For example trying to present to a group that primarily does video game funding probably isn’t going to be as interested in your idea to make food for astronauts.  All though they could be, it is important to not rule out all VCs just because they primarily are not investing in the general area you are presenting but they generally will want to stay within their comfort factor.
Just because the initial brief of a project was accepted doesn’t necessarily mean that the project was accepted overall and that the VCs are ready to fund your project.  The business plan is important, even though the chances of the entire document being fully read are slim, with VCs some sections may interest others ahead of time and they may spend a little time going through the sections that interest them.  However the import piece is going to be the pitch or presentation to the VCs.  There are a lot of sites out there on perfecting your pitch and even more on business plans, it would be a good idea to review some of these early on before even starting any of the other processes as they can help make it all better overall.  There is also a lot of great resources regarding the lean startup methodology that can be helpful in general.  With regards to the business plan it is in general a good idea to have something, even if it is a little more than the lean canvas will show.  As there is generally a lot of additional areas that usually get lightly glossed over that these documents help flesh out that can help you be better prepared for the questions during the pitch.
It is also a very good idea to seek out a mentor in this venture as they can help you get everything together and give some valuable feedback especially during the creation of the business plan and pitch.  Additional resources for helping with business plans, pitches general mentors and for a variety of other resources contacting your local Score chapter is a good idea as they have a lot of resources for small business and large businesses alike.  Having a mentor that can help with the overall process is invaluable resource.
Finally when trying to go for VC funding or other resources for a business it is generally a good idea to be prepared to be told no and to be told that they think your idea isn’t that great of one.  It is not a matter that it may happen it will happen as everyone else sees the idea differently and may not always be consistent.  Of course you think your idea is great and the next best thing since sliced bread or you wouldn’t be trying to get funding to work on it.  Even if they think it is a great idea and so do you, there are other ways that ideas/businesses/projects can fail.