Venture Capital Blog » Technology http://blog.mycapital.com Guide to Raising Venture Capital | MyCapital.com Sat, 28 Aug 2010 10:03:15 +0000 http://wordpress.org/?v=2.8.2 en hourly 1 How to Write a Winning Business Plan-Introduction http://blog.mycapital.com/how-to-write-a-winning-business-plan-for-raising-venture-capital-introduction/ http://blog.mycapital.com/how-to-write-a-winning-business-plan-for-raising-venture-capital-introduction/#comments Fri, 08 Jan 2010 04:12:21 +0000 MyCapital Team http://blog.mycapital.com/?p=379 bizplanThe business plan is a detailed road map to your venture and how you plan to grow it into a successful business. It’s a crucial document for anyone seeking capital, and is typically developed with two audiences in mind: 1) angel investors – wealthy individuals who personally invest their money, expertise and experience in your venture; or 2) venture capitalists (VCs) – partnerships with funds of pooled investment capital with which to invest in a number of companies.]]> bizplanThe business plan is a detailed road map to your venture and how you plan to grow it into a successful business.  It’s a crucial document for anyone seeking capital, and is typically developed with two audiences in mind: 1) angel investors – wealthy individuals who personally invest their money, expertise and experience in your venture; or 2) venture capitalists (VCs) – partnerships with funds of pooled investment capital with which to invest in a number of companies.

The importance of a well-thought out, comprehensive business plan can’t be overstated.  VCs, in particular, review an average of 200 business plans each month.  Of the total number of plans submitted, just 0.3 percent ultimately receive VC funding.  So to even be considered, your plan needs to be thorough and engaging. 

The main elements you should have in your business plan include:

  • Executive Summary
  • Company Description
  • Product or Service
  • Market Analysis and Competition
  • Marketing Plan
  • Management and Organization
  • Financial Projections
  • Fundraising and Use of Funds

Keep in mind that potential investors will judge you not just on your ideas, but also on the way they’re presented.  The more time you spend researching your ideas and mapping out your operations, the better off you’ll be.  It typically takes several weeks to complete a good, solid plan.  You won’t regret the effort because it will also help you to determine how to allocate your resources properly, address problems, and make informed business decisions as you move forward.  So take your time and write a thoughtful, comprehensive business plan that will serve you and your investors well as your business progresses.

]]> http://blog.mycapital.com/how-to-write-a-winning-business-plan-for-raising-venture-capital-introduction/feed/ 0 How to Write an Executive Summary http://blog.mycapital.com/how-to-write-an-executive-summary-for-raising-venture-capital/ http://blog.mycapital.com/how-to-write-an-executive-summary-for-raising-venture-capital/#comments Wed, 06 Jan 2010 04:47:21 +0000 MyCapital Team http://blog.mycapital.com/?p=391 bizplan2The executive summary is by far the most important section of your business plan because it’s the first thing the busy VC or prospective investor will look for and read to get an idea of your investment opportunity. If your executive summary is compelling enough, the VC will read further, contact you for more information, and/or ask you to come in for a meeting to present your ideas. If your executive summary fails to strike a chord of interest, the reader will quickly move on to the next business plan in the stack. The executive summary – really just a compact version of your business plan – should concisely address the following:]]> bizplan2The executive summary is by far the most important section of your business plan because it’s the first thing the busy VC or prospective investor will look for and read to get an idea of your investment opportunity. If your executive summary is compelling enough, the VC will read further, contact you for more information, and/or ask you to come in for a meeting to present your ideas. If your executive summary fails to strike a chord of interest, the reader will quickly move on to the next business plan in the stack.

The executive summary – really just a compact version of your business plan – should concisely address the following:

  1. what your company does;
  2. why your product or service is unique and what opportunity you’re presenting;
  3. how your management team is well qualified to execute your business plan;
  4. how much capital you need and how it will be used.

Keep your summary brief – ideally, two pages or less. Think of it as everything you’d say to a prospective investor in a five-minute interview. There are some who advise that you write your executive summary last, to capture the crucial points you’ve written into your plan. Others advise that you write the executive summary first and use it as a road map to keep your business plan on track. Both approaches have merit. In either case, make sure your executive summary is professional, comprehensive, and concise.

Example:

iWidget, Inc. designs, manufactures and markets software solutions for the online gaming and desktop publishing industry. The company’s flagship product, iWidget Pro, is the leading software package for entrepreneurs seeking to start up a web business in the fast growing online gaming industry. iWidgetPro allows a user without any HTML skills to quickly set up an online gaming web site bundled with quick loading graphics and gaming technology. The company’s two accompanying software packages, iWidgetNext and iWidgetWorld, provide advanced design elements and technologies that allow users to customize their web sites. While the market is flooded with desktop publishing software, there is no other desktop publishing software company focused exclusively on the online gaming industry.

1. The Market

iWidget’s target market is the rapidly expanding online gaming industry and entrepreneurs seeking to set up gaming websites. Since its inception, the online gaming industry has experienced tremendous growth. Estimated at just over $1 billion in 2003, In-Stat/MDR expects the online gaming market to grow to nearly $4 billion by the end of 2008.

2. iWidget’s Competitive Advantage

As the only desktop publishing software maker focused exclusively on the online gaming industry with proprietary software that allows individuals to easily set up their own web businesses, iWidget is uniquely positioned to grow along with the industry and adapt to new industry developments quickly. Unlike other software makers’ products, iWidget’s products offer advanced and continuously updated technologies exclusive to online gaming. Software products offered by other software makers do not include these specialized technologies and do not offer the same ease of use or gaming graphics capabilities.

The expertise needed to design gaming industry-specific software is a significant barrier to market entry; iWidget’s management team includes desktop publishing industry pioneers with extensive knowledge and understanding of the online gaming industry and market.

3. Management Team

This is the second software venture for iWidget founders and co-owners J. Smith and R. Jones. Former classmates at M.I.T., the two teamed up to co-found iStudy, an online study system for college students that was acquired by BIG Textbooks Co. in 2002 for $8 million. Smith and Jones were among the pioneers of the desktop publishing software industry, and used their extensive knowledge and expertise to develop gaming-specific software that would allow individuals to set up lucrative online gaming web businesses. As the online gaming industry grows and develops, Smith and Jones are at the forefront of adaptive software that continues to evolve into a greater array of business options for online gaming industry entrepreneurs.

4. Investment

The capital sought in this proposal is iWidget’s third round of financing. Proceeds of the first round of $2.6 million in funding and second round of $3.5 million in funding have been used to expand the company’s highly knowledgeable team, develop new software products, and execute the company’s first software licensing agreement.

iWidget intends to raise an additional $3.5 million to develop additional software products, build out its marketing function, and successfully bring new products to the market.

5. Conclusion

First mover advantages have allowed iWidget to gain a dominant position in development and delivery of online gaming software. This early mover status, coupled with several years of desktop publishing management experience and technological expertise, will allow iWidget to continue to lead the field with cutting edge products in the fast growing online gaming industry.

]]> http://blog.mycapital.com/how-to-write-an-executive-summary-for-raising-venture-capital/feed/ 0 How We Rank Top 2 in Google for Keyword Venture Capital 101 http://blog.mycapital.com/how-we-rank-top-2-in-google-for-keyword-venture-capital-101/ http://blog.mycapital.com/how-we-rank-top-2-in-google-for-keyword-venture-capital-101/#comments Mon, 10 Aug 2009 06:58:33 +0000 MyCapital Team http://blog.mycapital.com/?p=277 google_search_resultSearch Engine Optimization (SEO) is a lengthy process, but once you excel at it, the benefits are really worthy of the time and efforts you put in. If you type ‘venture capital 101’ in the Google! search box, you will find that the pdf ebook posted on our website MyCapital.com has ranked top #2 in Google!. How do we achieve this? We went through painful learning processes and trial and error as most other businesses. Below are some of our findings that we hope you can find them useful.]]> google_search_resultSearch Engine Optimization (SEO) is a lengthy process, but once you excel at it, the benefits are really worthy of the time and efforts you put in. If you type ‘venture capital 101’ in the Google! search box, you will find that the pdf ebook posted on our website MyCapital.com has ranked top #2 in Google!.

How do we achieve this? We went through painful learning processes and trial and error as most other businesses. Below are some of our findings that we hope you can find them useful.

1. Select right keywords: At first we made a mistake of selecting keywords that have highest search volumes. We thought that this will bring more traffic to our website. We were wrong about this. The best keyword is actually the least competitive keyword.

For example, we did a search on keyword ‘venture capital’ in Google! and found that it has 26,200,000 competitions (as of today – June 26, 2009). In addition, the top #1 is wikipedia, which is a website we won’t be able to beat. Then we did a search on keyword ‘raising venture capital’. We found that it has only 816,000 competitions, and the top #1 web is a blog that has only a PR rank of 3. This means that ‘raising venture capital’ is actually the better keyword candidate than ‘venture capital’. With the same method, we have found that keyword ‘Venture Capital 101’.

When you type ‘venture capital 101’, you will see that this keyword has only 731,000 competitions and the top #1 page only has a PR rank 1.

2. Content is king: If you download the ‘Venture Capital 101’ pdf ebook from our website, you will find that this ebook has 19 pages! We have tried to give a very comprehensive guidelines on what is venture capital, how does venture capital firms work, and how to raise venture capital effectively, including dos and don’ts in raising venture capital. One thing to note is that, when we wrote this ‘Venture Capital 101’ ebook, we really meant to provide useful information for entrepreneurs and startups that are looking for venture capital investment, and did not mean to use it only for SEO purpose. Therefore, our writer had not ‘stuffed’ keywords into this ebook and the content is very natural.

3. URL name does matter: As you can see, our ebook is posted on our root directory, with a url named www.mycapital.com/VentureCapital101_MyCapital.pdf. You should always put the keyword in your url, and try not put it after two many subcategories. For example, a simple url such as www.mycapital.com/venturecapital101.htm is definitely better than www.mycapital.com/resources/articles/venturecapital101.htm

4. Make sure your web page is indexed in search engines: The simplest way of doing this is to give the page a link yourself. In our case, we give this article a link on our homepage www.mycapital.com. By giving yourself a link from a page that is already indexed by search engines, you ensure this page can be found by search engines.

Advice for others:

The best SEO practices are being discussed in many books today and are no more a black box like how it was five years ago. As the pay-per-click (PPC) advertising programs such as Google! AdWords and Yahoo! Search Marketing are getting more and more expensive, you really has to excel at SEO in order to survive. Since a SEO campaign generally takes at least six months to see results, you should start doing SEO for your business as soon as possible.

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