Green technology start-ups, like any other group of entrepreneurs, are faced with the difficulty of seeking investment from venture capitalists. If you haven’t previously launched projects, the matter of raising venture capital becomes even harder, as they are presented with a large number of business plans daily and have very strict criteria. To avoid disappointment, be sure that you are ready to approach them.
The Keys to Success
Are you ready to face rejection? Venture capitalists are tough on those who seek their funding, so be prepared for very blunt and what may appear harsh feedback. There is no doubt that venture capitalists will expect to see a proven track record of your competence and success; without this credibility they won’t be interested, so if you don’t have this evidence, work on building this up before you seek their investment. There will be an expectation that they will have a stake in your business, so if you are not comfortable with this idea and want to maintain complete control, look to another source for funding. If you are trying to raise capital on your own, you have less chance than if you have a business team; they bring with them extra experience and can help you secure investment from regarded sources, which will entice in venture capitalists. Even if you don’t secure a business team, be sure to receive mentorship from someone with an extensive background in business, who will be a fountain of knowledge and can provide significant guidance; even better try to receive mentorship from a venture capitalist. Only select venture capitalists with an interest in supporting green technology start-ups and those which invest capital within the range you are looking. Your business plan must stand out from the rest. You need to know your plan inside out and it is imperative that information regarding budgets and finances are very clear, which graphical representation can help with; there should never be any indication that your figures don’t add up. Ask an investor to scrutinize your plan before you present it. When you do your presentation, time will be limited, so keep to the point and focus on what seems to interest them the most; use your interpersonal skills to sell the idea.
All being well, you will secure their investment. However, legal advice from a venture capital specialist will be required, as negotiating the terms of an investment are far from easy; a general practice lawyer just won’t do. Attorney Allison Spinner, a Partner at Wilson Sonsini Goodrich & Rosati, is a fine example of a lawyer who could help with these matters. With 15 years experience behind her, she has represented many clients in relation to venture capital investment, including those who have been based in the energy and green technology sectors. Her knowledge and familiarity of this area is highly respected, with Allison Spinner contributing to the Practising Law Institute’s continuing education program on the subject.