Asking for Money Ain’t Easy – But a Strategic Venture Capital Partner Can Accelerate Business Growth
I was never one to ask for money, even as a kid. I started earning my own money when I was five years old. Yes, of course the money came from my parents, but they gave me little jobs to do in the family business to earn it. When I was 15 I started my own business which created a nice income for a teenager so I felt pretty independent. Since high school, I've always had a source of income so I've always felt economically secure. Even after I got married, I knew that couples are supposed to jointly share resources and I don't mind sharing my earnings, but I bristle at the thought of being dependent on someone else.
So what does this have to do with small business?
As part of a program called All Things Media, a venture capital forum sponsored by Springboard Enterprises and the Paley Center for Media, I stood on a stage before a packed house and asked for money to accelerate SBTV.com's growth. Talk about pressure! More than 100 women-led media companies applied to participate in the All Things Media program. Only 22 were chosen from the pool to be coached, mentored and taught the process of attracting VC funding. It was an incredible experience. Just the contacts alone were well worth the time and resources the program required for participation. Very few women owned businesses seek venture capital. In part, the lack of knowledge about the venture capital process causes them to utilize other capital resources to fund their company's growth. Furthermore, a lot of women simply don't want to lose control of their companies. Venture capital funding isn't right for everyone.
When a venture capitalist decides to invest in your company, they don't deposit money in your checking account and walk away until it's time to cash in. They expect to have some control over your business. A lot of entrepreneurs who are mavericks by nature, bristle at the thought. How much control a venture capital firm will expect to wield varies. Depending on the size of their investment, a venture firm generally requires one or two of your company's board seats to be filled by its members. They also often seek to protect their investment by actively overseeing the management of your company and requiring certain fundamental business decisions receive their prior approval. "You don't want to inflict the venture process on anybody who is not really prepared for it," explains Amy Millman, the co-founder and CEO of Springboard Enterprises.
Even though a VC can accelerate business growth, remember asking for money ain't easy. This is the question to ask yourself: Do you want a big piece of a little pie or a small piece of a really big pie? If you'd like to know more check out my book: "The Girls' Guide to Building a Million Dollar Business".