Securing the right business funding solutions to get your eCommerce company off the ground can be a frustrating endeavor. It’s a flurry of investor meetings, business proposals and more – all of which determine the future of your business. Many venture capital firms are ready to invest in the right concept. But how do you know which one is right for your brand?
Business Funding Solutions: 3 Questions to Ask Before Signing On the Dotted Line
Temporary funding sources may be fine for now. But they aren’t an effective long-term solution. To ensure your eCommerce business can survive in a market saturated with competition – and compete effectively – you need a funding partner who is in it for the long haul.
As a first-time entrepreneur, finding the right VC or funding partner is crucial. Yes, you need to convince the VC that you’re worth their funding. But what about the reverse interview process? How can you decide if a particular VC is the right partner to take your brand from the ground floor to the next level?
Keep in mind these three questions when searching for business funding solutions:
- Does the VC’s attitude align with your own? Since long-term funding is the main objective, you want to partner with a VC firm that shares similar ethics and values. Ideally, you’ll be working alongside this funder for an extended period of time, and you can’t do that if you’re not on the same page. There’s no harm in passing on a partnership with a VC that is not a good fit for your particular brand. It’s much harder to walk away from funding once you’ve signed the contract than it is to say no after initial consideration.
- What other companies does the VC represent? Take a close look at a VC’s portfolio to see what other companies are represented by the firm, especially those in your industry. If your business is the first company the VC has funded in your industry, you could end up being the VC’s guinea pig. However, if a portfolio boasts several companies in a space with measurable results, it’s a safe bet that your VC firm knows the market well.
- What companies are no longer with the VC and why? Past clients are just as important as the company’s in the VC’s current portfolio – it’s important to understand why those companies are no longer with the VC. Have partnerships ended because it was time for the funder and startup to part? Or was there a disagreement that led to cutting off ties? Information about what ended the relationship can help you decide whether or not to partner with that firm.
Learn More About “Growing Wisely” and Business Funding Solutions
Dotcom Distribution’s latest eBook, “Emerging in eCommerce: A 360° View From The Inside” covers everything that future eCommerce business owners need to know about business funding solutions. From the initial introduction to the final decision, Dotcom Distribution guides you through the steps to finding the VC that will help move your brand forward.
To learn more about Dotcom Distribution, contact us today.