The role of VC networks are crucial when it comes to providing startups a supercharged on-ramp for growth. Contrary to what is thought, VCs don’t just provide the necessary funding for companies: they can make or break a startup's success.
In this blog post, we explore the power of a VC network, providing insights on how you can access one in the United States, a hotspot for entrepreneurial activity.
Venture Capital: a characterization
Before getting into the VC network's positive effects, let’s start by gaining a good sense of what venture capital is. Anyone in the fast-paced world of startups and entrepreneurial ventures knows that securing adequate funding is a key element in turning ideas into reality.
There are different ways in which funds can be obtained and each is related to the stage of development of the business to be financed, the business model, and the amount needed. One prominent source of funding for high-potential businesses is venture capital. Among its main characteristics, venture capital:
- is a form of private investment
- is focused on financing early-stage companies with great growth potential
- VC funding carries a higher risk level when compared to more conservative options (e.g., private equity funding)
- involves investors providing capital to startups in exchange for an ownership stake
- seeks innovative businesses with scalable business models
- typically has a long-term outlook, with an average investment period ranging from three to seven years
It's not just about financial backing
Immersed in a sea of questions, entrepreneurs just starting out tend to focus exclusively on their business models and value proposition in order to attract the attention of venture capitalists. Therefore, founders and businessmen can relegate a critically important aspect of their work to the sidelines: networking.
You might need to start building relationships with VCs well before your funding needs are imminent. Being part of a venture capital network from the very early stages of startup-building is essential, giving crucial visibility to you and your business, as you prepare the groundwork for when your business needs financial and strategic support.
Since VC networks are usually comprised of experienced entrepreneurs who have worked in different sectors such as technology or finance, and have extensive experience working with other startups, they have keen antennae for potential growth opportunities. By joining these venture capital networks, you gain access not only to capital possibilities but also to expertise, networking opportunities, industry insights, and collaboration prospects—supercharging your startup’s growth trajectory. A VC network enables potential partnerships, supplying a rich and deep field of introductions to key players across different geographies and industries that can open new doors.
If you’ve read this far, you surely have the obvious question left to pose:
How to access a VC network?
Some ways you can do it in United States:
1. Attend entrepreneurship events and conferences, such as the TechCrunch Disrupt, Money 20/20 and Web Summit. Those events attract investors actively seeking promising startups and are a great opportunity to engage in panel discussions, and making valuable connections within the VC community.
2. Leverage online platforms which can provide comprehensive databases of investors, their investment preferences, and portfolio companies.
At Finalis, we have our Connect platform where you can find a plethora of dealmakers, including some related to the VC environment, to connect with. The platform currently has almost a thousand active deals under engagement, totaling $17B+ in value.
Also, you can leverage social media platforms like LinkedIn to establish connections with venture capitalists.
3. Engage with startup incubators and accelerators—firms designed to support early-stage startups by providing mentorship, resources and access to networks, including venture capitalists.
Programs like Y Combinator, 500 Startups, and Techstars have a proven track record of nurturing successful companies and connecting them with VCs. Research reputable programs that align with your business goals—then apply to them and leverage their network to access venture capitalists.
How can Finalis help you?
While following these basic guidelines can help you access a VC network, it's important to adapt them to your specific industry, location, and startup stage. Each venture capital firm may have unique investment criteria, so tailor your approach accordingly. Contact us to find out how you can get more expertise from Finalis.
Good luck on your journey accessing a VC network in the United States!