VC or vc?
In the hunt for funding, entrepreneurs often head straight for the big leagues and bet on prestigious venture capital firms. Yet the souring of the IPO market has the mega-fund players licking their wounds.
Fortunately, smaller VCs are filling the gap. "A lot of the larger funds are going through triage periods right now and devoting all their time, effort and funds to their existing portfolios," says Joe Heller, managing director of NextLevel Venture Partners, a VC firm based in Plainview, New York, that typically invests up to $5 million in new ventures.
of venture capitalists say they expect to exit current investments through mergers or acquisitions.
SOURCE: Deloitte & Touche
of venture capitalists believe companies' management is the most important factor in their investment decisions."
SOURCE: Vega Consultants Ltd.
"What's nice about small funds is they have the ability to deploy less capital and still have a high degree of interest," says Joel Magerman, president and CEO of New York City-based Bryant Park Capital, an investment bank that works with small to midsized companies.
If you decide to go with a smaller VC, look for one that has possible connections to you. " "Have they made investments in the same space you're in?" asks Heller. "Can those companies become customers, vendors, partners, or form a relationship with you? It's important that there be synergies."
Tech of a Deal
There's no need to make do with a computer system that moves at the pace of an arthritic tortoise. Intense competition in the technology arena has computer companies offering entrepreneurs fast, cheap and easy ways to finance IT purchases of up to $25,000.
Dell's QuickLoan and QuickLease, for example, offer a choice of loan and lease terms at rates competitive with what banks offer. A small business with a strong credit record may even qualify for a 0 percent, 24-month lease. And it's possible to apply for a QuickLoan or a QuickLease entirely online and receive approval within an hour. You can use the money on any hardware, services or third-party products Dell offers.
Jennifer Pellet is a freelance writer in New York City specializing in business and finance.
- Dell's Small Business Group
(800) 917-DELL, www.dell.com
- NextLevel Venture Partners LP
(516) 576-2195, www.nextlevelvp.com