How To Succeed In Startup And Venture Investments

Startup And Venture Investments are the money, technical know-how, or management expertise provided by investors to new ventures with long-term growth potential.

These investments are typically aimed at new startups or projects within an existing company that have high potential for return but also carry high risk.

Venture capital is an investment made by a private organization or firm to support a growing business. The journey of startups to receive investment varies according to the startup stages.

First, the entrepreneur needs to decide which stage they are in and what they aim for with the investment.

If they want to bring the product/service in the ideal stage to life, the entrepreneur needs to go for a Pre-Seed investment round.

If they aim to develop a commercialized idea, it would be more appropriate for the entrepreneur to go for a Seed Investment.

If the entrepreneur wants to accelerate growth after bringing their business to a certain scale, it would be more appropriate for them to go for a Series A investment round.

After deciding which kind of investment round you should participate in at which stage, you need to apply to the stakeholders in the ecosystem. Depending on the investment round you plan to go for, who you can find investment from varies.

In a pre-seed investment round, it would be more appropriate to search for investment from family, friends, first-degree networks, and crowdfunding platforms.

It would be more appropriate to search for your seed investment from angel investment networks, early-stage investment funds, and crowdfunding platforms.

It would be more appropriate to find your serial investments from venture capital funds and corporate VCs (Venture Capital). Which institutions you will continue your investment search in is of critical importance according to the stages.

What Is Startup And Venture Investments And How Does It work?

After deciding what kind of investment round you will participate in according to the stage of your startup, you can complete your investment journey in 5 steps.

After making the decision to search for investment, you need to do some studies and analysis specific to your startup. First, you need to put the questions of how much investment you need, whether it is the right time, can you proceed without investment on your agenda.

After that, you need to think in general terms about how much investment you need, where you will use it, and what exactly it will do. You need to plan how much share you plan to give in return for the investment amount you need, considering the future vision and possible investment rounds in the future.

You need to plan your search accordingly by doing preliminary research, who you can get investment from, how to contact, and how investors to be taken to the company can contribute to your startup in addition to giving money.

When communication and interviews are considered in the next stage, the agenda should be correct communication, strong planning, self-confidence, and energy. It is important to establish correct communication with investors and not to interrupt communication.

Planning is important in the startup journey. It is important to make your plans determine your roadmap and convey to the investor that you have a strong planning structure. 

Another important issue for investors is the entrepreneur’s motivation and energy to do business. The entrepreneur continues the journey by managing uncertainties. He aims to be successful at the end of the journey by managing uncertainties.

These uncertainties are a situation that is very likely to cause discouragement in entrepreneurs. Therefore, the entrepreneur’s motivation and energy are very important for investors. It is one of the most important issues that investors focus on when making investment decisions.

Who Are Angel Investors And How To Find Them?

Angel investors are “informal venture capitalists who invest capital in newly established businesses”.

According to another definition, angel investors are defined as a financing technique that involves partnerships made by private investors with entrepreneurial experience with their own money and experience, usually in newly started and initially home-grown businesses.

Angel investors provide a source of initial capital to new organizations that are still in the establishment phase until the growth phase, and their role in financing small businesses is significant.

Considering the common aspects of the definitions in different sources, angel investors are defined as individuals or organizations that give life to companies in the establishment phase or in difficult situations with the financing they provide.

What Are Venture Capital Funds And How To Invest In Them?

According to international banking regulations, a Venture Capital Investment Fund (Fund);

is an entity that is established for a period of time with a bylaw by portfolio management companies and venture capital portfolio management companies in order to operate a portfolio consisting of assets and transactions determined by the Capital Markets Board in accordance with the principles of fiduciary ownership on behalf of shareholders with the money collected from qualified investors in return for participation shares and does not have a legal entity.

Venture companies must aim to create or develop tools, equipment, materials, services, or new products, methods, systems, and production techniques with industrial, agricultural application, and commercial market potential or be in a position to achieve these goals with management, technical, or capital support.

Funds can only invest in venture companies established as joint stock companies and limited companies. It is mandatory for the transformation of venture companies that are limited companies as of the investment date to be completed within one year following the initial investment date.

What Is Crowdfunding And How To Use It?

In its simplest form, crowdfunding is the financing of a project or initiative by a group of people via the Internet. In theory, people provide indirect financing for existing investments through their savings.

For example, in traditional methods such as finding financing for investments through banks, banks act as intermediaries between people with savings and those who need money. 

However, unlike traditional methods, crowdfunding allows the financing to be used first-hand without the need for any intermediary institution. Those in need of financing apply directly to the people who will invest (the crowd). Communication is provided via the Internet.

How To Manage Risk In Ventures?

Risk management is the basis of ventures and economic development. Risk management enables businesses and entrepreneurs to manage risks carefully and reduce and/or prevent losses they will face in the globalization and intense competition environment.

The globalization process brings both new opportunities and new risks to the agenda. New technologies create new risks and also provide important opportunities for ventures.

In short, getting investment in your startup is like a marriage. There is a bond between the ventures and the investor like a marriage. It is vital to be mutually transparent and not to damage trust.

The entrepreneur should explain a problem to the investor and share their expectations. Even if it is a mutual interest relationship, it is in the hands of the entrepreneur to manage the process efficiently and beneficially for both parties.

See you in the next post,

Anil UZUN