Q:
Can you briefly describe the venture capital funding process?

A:
Choosing the right venture capital firms is an important part of the fundraising process. An entrepreneur that has not researched and targeted venture firms runs the risk of lengthening the search and overshopping the plan. Venture capitalists readily exchange information, so rejection from one firm may influence others. The criteria for selecting the right venture capitalists to approach include their geographic, industry specialization, stage of development, and size of investment preferences. Also important is whether the fund will act as a lead investor and whether there are complementary or competing investee ventures within the fund's portfolio. Venture capitalists typically have different investment parameters and preference depending on their experience and commitments. Venture capital professionals typically make minority or non-controlling equity investments in high growth, entrepreneurial companies (many times high-tech related). Some venture capital professionals invest in non-technology companies as well as niche investments, such as minority or woman-owned, publicly traded, or regional companies or strategic technologies. Others purchase companies outright and add them to their investment portfolio.