Tips for Home-Based Entrepreneurs Looking for Angel or Venture Capital (VC) Funding

Know your investor: Investors are typically intrigued by companies that fall within current trends, but that is not always the case. Different angel and venture capitalists are looking for different things, and most have a track record of the

A favorite VC saying is, “investors would rather have a second rate product with a first rate management team…

type of company, and even rate of return, they are looking for so—do your homework and know who you are pitching to.

Know what they like: Investors want to see that your product/service not only fits a market, but also stands out amongst the competition. Without proper market research, a unique selling proposition, and a solid marketing plan, investors will be wary in investing in your idea.

Focus on creating a first rate management team: If your management team is not educated about the product and its market, it poses a great risk to the investors. A favorite VC saying is, “investors would rather have a second rate product with a first rate management team than a first rate product with a second rate management team.”

Have a great pitch: Your pitch should be short, straightforward, and clearly articulate the value proposition of the company. Start with a quick elevator pitch which should include basic information on the product and its market.

Have a great presentation: After your pitch, include a visual presentation to go into further detail. Keep it simple and don’t use too much text. Investors are interested in how they will see a return on their investment. The better they can visualize this, the better your chances are for getting investments.

Stay Focused: Be approachable and on target with your key points. Remember, you’re not just selling your company; you’re also selling yourself.

Get some cash flow before raising capital: Show potential investors that your product or service has already produced a little capital. It will speak volumes of your likelihood for success if you can show that you already have paying customers or a positive cash flow.

Think realistically: Different venture groups will have a different rate of return based on the type of investor. Know your market: how big is it, who are the competitors, how you are differentiated. Find an investor who is familiar with your industry.

Use your resources: The Internet is full of resources. There are business coaches, matching services, university classes, local angel groups, business incubators and entrepreneur forums with strong education programs and workshops that are open to the public. Also, try speaking or networking with other successful entrepreneurs.

Learn from your failures: The biggest mistake you can make is to not learn from your mistakes. Learn from every situation, continue to practice your pitch and strategy, and keep moving forward. HBM

Christopher Lynch is the Vice-President of Business and Economic Development for the Irvine Chamber of Commerce. Mr. Lynch oversees the Irvine Chamber’s programs to promote tourism as well as to attract, retain and incubate businesses in Irvine. He is also the founder of the Irvine Entrepreneur Forum (, and is an economic expert who works with different investor groups to teach start-ups on how/what they should present to receive money for their businesses.