Venture Capital – Factors to Consider When Seeking a New Tech Investor

Technology is the collective term for any unique techniques, skills, systems, techniques, and processes employed in the achievement of goals, including scientific research or in the manufacturing of physical goods and services. Technological change is the result of human creativity and technological innovations. Examples of the development of new technology include the computer, electricity, radio, telephones, airplanes, satellites, integrated circuit, medical and surgical equipment, communications, and entertainment technologies. The process of incorporating new technology is sometimes called “innovation.”

A tech-enabled business is a company that is positioned to take advantage of new technology, be it in manufacturing, information technology, or physical products. There are several facets of a tech-enabled enterprise. These include:

Venture Capital: Venture capital represents the third segment of the investing world, after traditional private equity and ownership. Venture capitalists are individuals who provide start up capital, either through the sale of shares of ownership or through a structured loan, to start a new business. Venture capital is the source of some of the most high valued companies in the world, like Google, Apple, Microsoft, Cisco, Seacor, Prudential Financial, Goldman Sachs, Keystone, Yahoo, and AOL. Venture capital can also fund new technologies.

Venture capital represents the largest portion of venture capital funding. Of the venture capitalists in the information technology industry, most do not deal directly with technology companies. Instead, they are indirectly involved through angel networks. An angel network is like a group of individual investors that have provided seed money to an emerging company. The companies themselves rely on the knowledge of these individual investors. Angel networks help to assure that a technology company has access to sufficient amounts of venture capital.

As previously mentioned, venture capital represents a large portion of the investment portfolio of tech-enabled businesses. The most successful venture capitalists are those who understand the ins and outs of the tech sector. Because there are so many different types of tech devices and technologies out there, venture capitalists must be able to identify which companies are making use of cutting edge technologies, and which ones are not. A great venture capital firm will be able to take a company by its roots, and figure out what types of tools and technologies it will utilize to draw on its resources in order to grow and create a competitive advantage. A great tech-enabled business needs a solid business plan that identifies not only the sources of potential revenue, but also the methods that it plans to use to draw attention to its offerings.

As you can see, there are many factors to take into consideration when you are looking for a venture capital investment into your tech company. Make sure that you think about these factors as carefully as you would a new business opportunity. You do not want to invest in a company that will grow too slowly, or one that will not be able to attract investors and customers. If you take a look at your tech company critically, you will likely discover some areas that are in need of improvement. Once you have identified those areas, you will be better prepared to fill them in, and get your business into the right tech investor’s wheel.