Capital Opportunities for Small Businesses - sbtdc

C A P I T A L O P P O R T U N I T I E S F O R SMA L L B U S I N E S S E S
For a recent look at total venture capital activity in the Southeast versus elsewhere in the nation, consult the
Money Tree Report View at https://www.pwcmoneytree.com/MTPublic/ns/nav.jsppage=region&region=1800.
Raising Venture Capital
Recent indicators show that the percentage of business plans examined by venture capitalists has diminished. A
small business can substantially increase its chances of a more thorough review if it can get a direct
introduction or referral to a venture capitalist by way of a professional advisor, such as a lawyer or accountant.
The approval and backing of a well-respected source will often cause the venture capital firm to consider a
company’s business plan. Companies submitting business plans absent such support are rarely successful in
securing VC funding.
Venture capital seekers can greatly improve their chances of receiving venture capital by presenting a wellorganized
and detailed business plan with realistic, yet impressive, financial projections. Entrepreneurs should
emphasize their managerial capability, the market size and evidence of demand, as well as the potential to exit
the business with a hefty profit. The business plan, however, will only typically generate a meeting. At this
initial meeting (sometimes called a “whiteboard session” or “first pitch” meeting), the company must be
prepared to make a formal, persuasive presentation that will give the venture capitalist a positive impression of
the product and management team. The business plan notwithstanding, a concise executive summary, expense
budget for the first two (or more) years, the revenue model, and a PowerPoint presentation is generally the
materials laid before any prospective investors.
Companies seeking to raise venture capital should allot a substantial amount of time to identifying potential
suitors. While there are a number of venture capital firms operating within North Carolina, there are many
sources available outside the state. Although these sources have traditionally been difficult to access, the
company seeking venture capital financing should, in the initial stages, entertain all possibilities. The prospects
for procuring funding from out-of-state financiers are actually becoming more favorable due to the growing
national awareness of attractive opportunities in the region, as well as use of the Internet to connect North
Carolina’s entrepreneurs with outside venture capitalists.
Most venture capital funds operate as ‘blind pools’ in which investors’ monies are combined and then invested
by the venture capital fund managers. Some offer an added twist in which investors have varying degrees of
discretion in picking and choosing among the deals in which the funds invest.
Those VC funds currently active or investing in North Carolina appear below. A detailed profile of each fund is
included in a table following this list.
Venture Capital Funds Active in North Carolina
Note: Funds marked with a * may also be found in the Private Equity Section of the Report.
North Carolina based firms are bold italicized.
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