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A Comprehensive Guide to Venture Capital

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Venture Capital is, in many ways, about community building. It’s all about building networks and finding the right people to partner with. And it’s no wonder: You can’t succeed on your own — you need to get in touch with the right people for your next big step forward. So that’s where we begin.

VC is all about building the right networks — and then finding ways to leverage those networks for mutually beneficial outcomes. The best VCs out there are the ones who can benefit from their network in multiple ways, leveraging it not only for capital but also as a way to build trust and credibility with potential partners and investors.

With curated networking apps like Intch, you can effortlessly find venture capitalists and build networks.

In this article, you’ll learn:      

  • What venture capital is
  • What venture capital is actually investing in
  • How to find a good venture capitalist
  • How to build a successful startup team

Let’s get started.

What Is Venture Capital?

Venture capital (VC) is the form of private equity investment used most often by startups and small businesses. In essence, venture capital allows people who are not company owners to become part of a business — providing them with an opportunity to invest alongside other people in return for equity in the company.

This process allows VCs to provide crucial startup funding at early stages when it’s needed most while also allowing entrepreneurs access to expertise and connections that may help them succeed (and attract further rounds of investment).

Another benefit of VC is that it provides access to top talent: successful VCs are often stars in their own right, having built up valuable networks across sectors and industries.

What Does VC Invest In?

There are three main types of venture capital firms: angel investors, seed funds, and late-stage funds. Each type has its own focus, investment strategy, portfolio companies, and model for distributing returns from fund investments after they exit (sell) through an initial public offering – or IPO. 

Let’s dive into each one briefly.

Angel investors are often individuals who pool money together, or very small funds targeting early-stage startups. They don’t typically have much authority over the management or operations of the company; rather they provide their knowledge, contacts, and expertise, enabling opportunities for founders they know or trust.

Seed funds invest early-stage money into companies after the launch of their MVP, or Minimum Viable Product. They’re often backed by large venture capital firms and provide access to networks that can help a company scale quickly.

Late-stage funds invest in mature companies at the time when they’re raising their next round of funding or looking to expand into new markets. They’re typically backed by global investment banks and asset management firms and seek to provide long-term capital for longer-term returns. 

Finding a good venture capitalist

It can be hard to find the right people to partner with when it comes time to raise capital. But finding a good venture capitalist isn’t enough – you also need to make sure that these investors have the skills and experience you need for your startup, and that they’re invested in your success. 

Here are some of the things you should look for, whether you’re using an app like Intch or networking at a physical event:

  • Skills
  • Experience
  • Connections
  • Credibility

A good VC will have expertise in tech, in business, or a mix of both. They’ll know which companies are likely to succeed and which ones are destined for failure, but they’ll also be able to make an informed judgment based on their experience and knowledge of the industry. 

As well as being experts in their field, successful venture capitalists often have a wealth of experience doing deals at a similar stage of development — which means they already know what it takes to get companies off the ground and into profitable growth. 

Naturally, many VCs will have extensive connections across different aspects of tech – from product design through to marketing, sales, operations, finance – so having access is essential if you want any hope of closing deals with interested parties. 

The fund-raising process is highly competitive. This means that every investor has their own particular style — but regardless of how much money an investor has offered previously, it’s always worth checking references before making any commitments.

Building a successful startup team

Your startup’s success is dependent on your ability to build a strong team. In order to do this, you’ll need to have access to more than one set of skills and experience. So it’s important that you choose the right people for the job — and that you can work well together as a cohesive unit. 

Your startup’s success is dependent on your ability to build a strong team, and not just on your VC raise. In order to do this, you’ll need to have access to more than one set of skills and experience.

Networking is crucial to this process. It’s through these conversations that you’ll discover complementary skill sets, people who can complement your strengths and help you achieve your goals.

This means that you’ll need to be both proactive in finding talent, but also comfortable letting the right people find you. You might come across a particular person while browsing Intch or attending an online event networking event, for example, and be able to immediately connect over a shared interest or connection. This is the power of community and the Internet in general — resources like these make it easier than ever to find people with a shared perspective or experience.

Frederik Bussler

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