Export finance with venture capital: how to attract the right VC?

Export finance with venture capital: how to attract the right VC?

How to get venture capital funding for your internalisation

Venture capital is a good way to fund the growth of your company, also when it comes to growth abroad, after having proven your business model in your home market. Venture capitalists look for  professionalism and a strong commitment to the business. Hence, when approaching venture capitalists, you must be clear about what type of venture capital company you’re looking for. You must also be well prepared and thorough with your offer.

Before you approach a venture capitalist

Here is a sum up of prerequisites as defined by some top venture capital companies:

  • Serious dedication and commitment is required all along. Those companies that feel that they can relax once they are funded, need to adopt another perspective.
  • Establishment via a local subsidiary is recommended as this will help a new company to achieve compliance with the financial systems, stock offerings and exit strategies of the targeted country.
  • A company that has well established operations in its home country and wishes to expand its operations abroad, is likely to get funded for the expansion.
  • Presence in the country of launch, financial transparency and a clear idea about their target market can assist to secure venture capital.

4 steps for successful venture capital partnership:

  1. Prepare: prove your business – Knowledge and power of the marketplace and legal track records are major requirements to gain the trust of venture capital professionals.
  2. Initial contact: get introduced – Local organizations or affiliates that help in developing your business and network are needed to establish and grow your company
  3. The first meeting: be prepared and listen – A solid sales pitch is a must to sell your product to impress investors. Be prepared to answer questions about all aspects of your business.
  4. Long term relationship: nurture with care – investment is always available, but your capitalists should know your future plans and what you wish to gain from your investments.

Other tips to guarantee investments

Before approaching your venture capitalists, you must ensure that you have established adequate traction in your home market or any other proven track record that shows progress or scope for future growth. Track records are essential assets that venture capital companies are looking for to guarantee their money is well invested. Also, approaching investors too early will only result in rejection and demotivation.

The network of investors you are able to approach and build is the key for success for most businesses since this is a great way for products to be introduced to in new markets.

An ideal proposal is one which is mutually beneficial to both the investor and invested. A win-win scenario works best. When pitching to a venture capitalist, don’t spend too much time on the technology or product USPs, speak more about finances and your business plan as that’s the part they wish to hear.  

And lastly, be specific about your expectations. Negotiate well and discuss all aspects of company ownership, decision making and functioning to engage the right funding partner.

Start with a good plan and country data

Be aware of your business plans, industry and market before approaching a funding agency. Make use of detailed country data and educate your team in order to impress and convince the other party.

This entry in exports was updated on August 9, 2017 by specialist.