Your small business is growing. People tell you that you have a product or service that really fills a niche. You think a little venture capital could propel you to the next level, maybe take you to real name recognition and turn your red ink into black ink. Before you decide to go looking for VC funds, consider this: the venture capital world is driven by data and information, not ideas and enthusiasm.




We pointed out not long ago that venture capital is time consuming. Much of the time involved is spent analyzing data. Amar Goel puts it this way: "VCs are not in the business of coming up with crazy ideas and then throwing them against the wall and seeing if they stick. " I couldn't have said it better myself.

If you get involved in venture capital funding to finance the growth of your business, be prepared to spend a lot of time examining market data and comparing it to your own products and services in an effort to decide if your business is following the model of success that seems to be working elsewhere. There's a good chance that you may have to actually identify the success model for your particular business yourself - by sifting through reams of market information to decide what works.

Venture capital isn't so much about great ideas as it is about making sound ideas work.