Winner's Circle

Starting Your Search

How do you find a venture capitalist? A good place to start is with Pratt's Guide to Venture Capital Sources (Venture Economics). It is updated once a year, and most libraries have it in their reference section. This guide lists venture capital firms by state and includes a list of foreign venture capital firms.

Almost all the information you need to make an informed decision is included in each write-up. For example, Pratt's tells you what type of financing the venture capital firm prefers (seed capital or leveraged buyouts, for example). This is important because as an inventor, you are no doubt looking for investors who have a bias toward early-stage financing (more about this later). Pratt's also spells out what each company's minimum and preferred level of investment is and their geographic preferences. Most venture capitalists want easy access to their investments; this is important to know when compiling a list of prospective firms.

Another valuable piece of information provided by Pratt's is a percentage breakdown of each venture capitalist's current portfolio; for example, it may break down as 35 percent communications, 38 percent technology, 14 percent medical and 13 percent telecommunications. Obviously, in this example, it wouldn't be a good idea to send this venture capitalist a business plan discussing a retail venture. Send your business plan to investors who specialize in your industry.

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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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