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online courses on How To Start Your Own Dot Com Company - Ground Rules -
Rule 13. Matchmaking services can connect ideas with cash |
Without a referral
or a coach with a connection to a VC firm, you don't stand much chance of
gaining the attention of VCs. Online matchmaking services aim to provide a
solution to this problem. These firms, such as
Garage.com,
nvst.com,
and Venture Capital Online (VCapital.com),
seek to connect startups with capital, either through databases of business
ideas and investor contacts (as at nvst.com)
or through efficient, selective screening (as at
Garage.com).
Entrepreneurs outnumber investors, and matchmaking services
do not solve all of the fund-raising challenges of startups. Garage.com screens both investors and entrepreneurs,
who submit a Web-based application and, if selected, have their plans posted in
an area for investors called Heaven. But even in Heaven, there is a hierarchy:
The Portfolio lists companies that are closely matched to Garage.com investors -- these essentially become
clients of Garage.com and the Exchange lists firms with "substantial merit."
Garage.com generally earns a 5 percent placement fee for all funds raised
in the next round.
Nvst.com a Web-based network of entrepreneurs and
investors lets you seek out angel investors through a self-service process.
This virtual world opens up the chance of finding investors from just about
anywhere, although it doesn't ensure a level playing field. If you're in
Omaha, Nebraska, and you have an Internet company or something hot, you have a
much bigger challenge to attract funding. You have to meet these people.
You're not going to get a check off of someone with an E-mail relationship.
