Getting backed by a venture capitalist is a huge accomplishment for an entrepreneur. It means that someone very wealthy has a lot of trust in you and your business.
It’s hard to imagine what it takes to convince someone to give you anywhere from $100K to $10M. Thankfully, I had the opportunity to ask a venture capitalist, Mouli Cohen, for his advice. He makes it sound like it’s not too far-fetched to get backed by a venture capitalist as a young entrepreneur.
I asked him five questions and here is his response:
Q: What advice do you have for a young entrepreneur who is seeking venture capital for the first time and doesn’t know where to start?
A: Modern technology provides many tools and resources. I encourage young people to take advantage of the credible sources out there (make sure you’re able to decipher which is which) – journals, websites, media, etc. Construct your pitch and define it clearly, and have high-level materials that support your pitch:
- Executive Summary (2-3 pages in length)
- Financial Model
- Presentation Deck
Q: If young entrepreneurs had one slide to show you in their business plan presentation, which slide would you most want to see and why?
A: A slide with your financials – your VALUATION is key. My advice to young people is to know that your business model is your business plan. If you can defend the assumptions of your model, you win.
Q: What do young entrepreneurs bring to the table that veteran entrepreneurs are less likely to offer?
A: Hunger – a hunger to work hard, a hunger to succeed.
Q: You can bootstrap and grow slowly or you can seek funding and grow rapidly. What are the advantages to either method?
A: You want to have your business well-capitalized at all times, but until you seek your capital you must bootstrap your business. This is beneficial since it allows you to get the right milestones in place. Both methods have their advantages, but a happy medium is ideal.
Q: Would you invest in a company that helps young people become entrepreneurs?
A: Of course, if the investment was sound. Capital aside, there are many other ways that I take my time to educate young people on thinking with an entrepreneurial mindset. Social media channels (such as this site) are especially valuable in helping coach young people on how to be successful.
In his career as an entrepreneur, Mouli has founded and developed start-ups that have generated over $3B in shareholder value. Yes, that ‘B’ stands for ‘Billion’! Read more about Mouli’s viewpoints on entrepreneurship by going to MouliCohen.com.