If you are trying to raise money for your new startup, you may be struggling with ways to secure enough funding for your business idea. While new ways of raising funds are evolving, tried and true venture capitalists may be the answer to your cash flow problem, particularly if you have a new technology based company.

Venture capitalists generally trade a certain amount of cash for shares of the business with expectation they will turn a profit if the business goes public, or is sold. Venture capitalists are typically attractive sources of funding because they are active managers, and use their skills and money to fund projects they believe in.

They typically invest in high risk, high growth potential types of companies. A financial return on their investment is generally expected within 5-7 years. You will want to capture the interest and confidence of the potential investors during your initial meeting. Therefore, it is important to have a solid business proposal and plan in place regarding how you expect your business to be brought public or sold for a profit within that time frame.

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