Once your business has gotten through its seed funding round and the gears of success start to turn, your next step is likely to get another infusion of capital through investment. This is the arena of venture capitalists. They look for thriving small companies that can bring them large returns on their investment. If you have made it to the stage where you can attract the attention of VCs, your business is in a good spot. Once you are ready to take on some of those investors, the key is to create some buzz for your company – a sense of demand – that will make the VCs compete for a piece of the pie.
Demonstrate Some Raging Demand
Showing venture capitalists that you have so much demand for your product or service that you cannot currently fulfill all requests will have them foaming at the mouth to get in on your business. Be prepared to give some specific details about the snowball of demand coming your way.
Limit the Series A Time Period
Let all the potential VCs know that there is a very short window of opportunity to invest. This will create a sense of urgency that will hopefully bring helpful investors around soon.
Drop Names
Once you have several interested venture capitalists, do not be afraid to let each of them know which other VCs are considering your company. The world of venture capital is relatively small and many VCs know each other or at least know OF each other. This strategy may put some pressure on them to get in before the others.
Once you have created sufficient buzz for your series A funding, the next big step is choosing the right VCs to partner with your business. While that can be a daunting task and requires your due diligence, it is a nice problem to have.