How to Get VC Funding Even if You're Not Web 2.0 or Cloud-Centric - Page 2

Points to consider when seeking VC funding

If you have the aforementioned criteria in place, you are well-positioned to seek the help of the investment community. Turning the tables on the criteria for success cited earlier, the following are four points for entrepreneurs to consider when evaluating VCs and asking for funding.

1. You are hiring

When you are seeking funding, you are also in the process of hiring your boss/bosses. Keep in mind that the VCs will be part of your organization whether they take the role of outside advisor or board member.

2. Set realistic expectations

Fully understand the terms of the arrangement, what is expected and what will be rewarded. Realistic expectations should reflect the size of the market segment, the viability of your business to succeed in that segment and the volatility of the economy.

3. Don't just take any funding

Be sure the funding is coming from a reputable source, with a strong track record in ventures that are similar in nature to your business.

4. Find balanced and experienced VCs

Align with those firms that have expertise in your market segment, as well as with banking and investing. The ideal investor fully understands what it takes to build a technology company from all sides of the business, based on previous experience gained by walking in your shoes. As an ally and investor, the VC needs to fully understand how your market works, and have the patience and knowledge to set realistic milestones and goals that determine successes.

While technology trends will come and go, and economic upswings and downturns will remain cyclical, there will always be demand for innovation and the need for VCs to help spur the next big thing.

Jeff Papows is President and CEO of WebLayers. He has more than 30 years of IT industry experience and has raised tens of millions of dollars from the VC community. Jeff has led private and public companies, most notably in the roles of president or president/CEO at Lotus Development Corporation, Cognos and Maptuit. He can be reached at [email protected].