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How to Create a List of Venture Capital Firms
In today's funding environment, not only do you need to cast your net wide, you need to know exactly where to cast it. Some would argue that knowing which firms to ask for capital is just as important as how well you pitch your company to them. As a result, creating a list of several different firms to contact is a critical path step toward growing your business.
You can build a list of VCs or you can buy a list of VCs. Some lists are available online for purchase (Growthink University, National Venture Capital Association), but it's also possible to find these things on your own with a little bit of hard work.
When you start your search, know this: the internet is your friend. You can use internet search engines to find the names of just about any venture capital firm in the United States. Once you start finding venture capital firms, you need to start narrowing it down.
First, figure out which companies are located in reasonably close proximity to you and your business, perhaps a couple hundred miles at the very most. Next, start researching which sector these VC firms like to invest in. Most firms have specialties. You're much more likely to get funding if you ask a firm that is familiar with your industry.
Here's another criterion to apply: what stage of business they invest in? Identify how far along your own business is (just an idea, pre-revenue, beginning operations, profiting/in the black, etc.) and look for VC firms that tend to invest in the same.
Once your list includes VC firms that are a good potential fit, it's time to start looking at the partners in those firms. Browse through websites and any material you can find on specific VC firms to see who the partners are and what their backgrounds are. If you can find one with similar background to you or with experience in your industry, you may have picked a winner.
You should also check on the existing portfolio of companies that each VC firm has invested in. If they've already poured money into similar companies, they're likely to do it again. If your business and one of theirs compliment each other, it generally works in your favor. Lastly, another factor to check is their fund size and typical investment amount. If a firm's fund and investment size are too large, it may not invest in the smaller companies. Likewise, if you are seeking C- or D- round funding and need larger sums of money, some small VCs might not do the trick for you.
To sum it up, the first step to find funding is to find funders. Use your research skills to identify who are the most likely VCs to support your firm. Odds are, you won't find a completely perfect match. But the more work you do on the front end, the better your chances of securing the capital you need. To your success!