I've worked with several, and on both sides of the table. Some of this comment 
is true, but like anything else, they can't all be summarized as one big 
homogeneous herd. ;-) About the only rule is that the earlier they get 
involved, the more of it they want in reward for their risk.

Some will have management team folks that can come in, but one guy who can walk 
away with the goods can make them jittery. More than one guy says you've 
already 'sold' it to some should-know folks and they bought in, AND, if you get 
hit by a car they can still go on.

Most won't know your market, unless you get lucky. You have to have numbers and 
reasonable expectations about who will buy and how many there are, as well as 
who your competition is. Having interested customers, or ones that have 'pre 
bought' is very good, as are orders for product, even if none have been built 
of delivered yet. It's a different part of the cycle then, but from your point 
of view, it's very close.

The working business, meaning you're already making them, etc, is least 
required. In fact, it's easier for them to arrange if they don't have to undo 
the legal and corporate structure you started. Even one guy can incorporate and 
have structure that is a pain for them to use.

Most important of all is the exit strategy. How do they get out in a reasonable 
period (a few years) with their expected return? Cover that and they'll help 
you with the rest. Of course, you'll need to show who will buy, how many will 
sell, what you need to make it happen, etc to show that. Be logical and 
reasonable. Statements like "Everyone will need one and buy it and their will 
be no competition" will get you thrown out...

And remember - very few are one-hit-wonders. Even if you give up most of this 
one and it turns into a nice day job with you near the top but not making much 
$$, if you give the VC a good return on his $$, you have an open ear and can 
command a bigger cut next time with him/her, and you've built credibility. 
Eventually, they will follow you around asking to be involved... ;) It takes 
more than one cycle though.



William "Chops" Westfield wrote:
> 
> In general, to get VC funding, you need a lot more than an idea and a  
> prototype.  They want you to have a Team, and a working business, and  
> a relatively detailed plan for growth and MAKING MONEY.  I'm not sure  
> what you call the investors that get in at the earlier stages, but I  
> don't think they're called "Venture Capitalists."
> 
> BillW
> 
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