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Winner's Circle

Your chances of hitting the venture capital jackpot could depend on who you know.

The reality of inventing is that often, your idea requires a large amount of capital to succeed. After you've exhausted your resources--pestered friends and family, approached every bank, maxed out your credit cards and held numerous garage sales--you may want to look into the possibility of finding capital through a venture capitalist.

A venture capitalist is a company or partnership that has a large fund available to invest in products or ventures. Unlike banks, venture capitalists are willing to get involved in projects where there is a significant risk; however, they demand a greater return, may require control over many aspects of the enterprise and many times dictate who will be hired.

Some say working with a venture capitalist is like selling your soul to the devil. If you've exhausted all avenues of financing, however, and thoroughly understand the agreement you make with a venture capitalist, the rewards can be great. Remember, a venture capitalist also wants to make money with your idea, so he or she wants you to succeed. And being in the business of building businesses, he or she has the advantage of seeing how many businesses work and can act as a consultant to help you succeed.


Tomima Edmark, the woman famous for her Topsy Tail invention has now turned her creative talents to the competitive retail arena of intimate apparel, HerRoomand HisRoom.

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This article was originally published in the April 1998 print edition of Entrepreneur with the headline: Winner's Circle.

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