If you believe you've got a killer idea that will become financially successful on the Internet, now is the time to consider pursuing venture capital.
A recent article on Forbes.com called The Art Of The Pitch, talks about the current mood in the venture capital world in relationship to Internet startups.
Rachel Rosmarin, had this to say in the article:
"...now is a great time, and the Bay Area is a great place to be looking for cash. In the second quarter of 2006, venture capitalists invested $6.73 billion--5% higher than last year. More than $2.4 billion of that came from VC firms in the Bay Area, up 13% over last year. Unlike the last bubble, startups in the Web 2.0 boomlet rarely talk about going public. Here the goal is to get snapped up by a Google (GOOG), a Yahoo! (YHOO) or a News Corp. (NWS), which officially launched tech's comeback by ponying up nearly $600 million for MySpace.com a year ago."
You don't only have these types of sponsored events to make your pitch to. You may be surprised where you can find money. It could be close to home in an unconnected field where an angel investor is looking somewhere to put money. Be ready no matter where you go or what function you attend to talk about what it is you are doing or want to do.
One thing not to do when you talk about it is to use the same jargon that all the other people that look for money use. For example, in the article cited, it mentions phrases and words like "recentralized infrastructure," "enablement" and "back-end data services," which created a disconnect with the people being pitched to. One more that I would add would be "solutions." This is so used that it has become meaningless.
What people investing their money want to know is what type of business model you have and how you're going to differentiate from your competition. Those are the questions you need to be ready to answer. And you should be ready to answer it with a few simple sentences. The old saying that a confused customer doesn't buy, applies to venture capitalist or angels too. They know when someone is just throwing out slogans, rather than understanding how their product or service will make them money.
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