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Raise venture capital from private equity sources

If you are looking to raise capital for your business venture then take a look at your definition of “private equity”.

You may need to broaden it.

Wikipedia define it as …

Private equity investments are primarily made by private equity firms, venture capital firms, or angel investors, each with their own set of goals, preferences, and investment strategies, yet each providing working capital to a target company to nurture expansion, new product development, or restructuring of the company’s operations, management, or ownership.”

But that really doesn’t really personalise it for someone seeking to raise capital.

Maybe closer is …

  1. Private Equity is equity capital that is not quoted on a public exchange.
  2. Private equity consists of investors and funds that make investments directly into unlisted companies
The last part gets closer to the title of this piece “How to Raise Venture Capital from Private Equity sources”.
“Investors that make investments directly into unlisted companies”
These private equity investors can come from many places. The best approach early on in the search for investors is to get all stakeholders to sit around a table and build lists of where investors could be found. Start with friends, followers and fans of the business. Once everyone has exhausted these categories then begin to focus on the niche the business operates in. Who in the world is passionate about this niche and it’s participants? How do you reach them? If you have a recognised position in the niche then you will normally only be one, two or three degrees away from people of influence. Work out how to reach them and communicate your opportunity. Search through the larger private equity investments that have been made public and see if any of the investors passionate in your niche.
As you gather followers you need to work out a way to involve them in your capital raising process. The capital raising will evolve. It will become more and more interesting as investors jump on board.
All followers should be updated with every piece of interesting information.
Conveying intrigue gains investors. Find lots of intriguing bits and pieces to communicate to your followers. Send investors news releases and updates about technology breakthroughs, client acquisitions or change of a management team. Whenever you have something to say get the news out to you followers.
If you keep telling followers things they already know they will zone out and lose interest.
Gather followers, engage them with new, interesting and intriguing information and then count them as they become investors.
If you are looking to raise capital for a startup the above is just as valid.