We’ve come to the last part in our series of articles on entrepreneurship. Do let us know if there are particular topics you thought were missing, or suggestions for new articles.  Thanks Eric, for your contributions!

When it comes to larger investment amounts for equity stakes, funding usually comes from professional third parties. You’re no longer pitching an idea; more likely your company has achieved some early milestones, will have its first customers and generally displays good prospects for traction.  You will need to approach these investors in a highly professional manner.

Be very selective who you bring in as a shareholder and on what terms. Control does not come with your job title, but with your share of the company. Once you have lost majority ownership you may no longer recognise the company you started.

If you are looking for seed financing, or early investment, you may want to find and angel. Angel investors are wealthy individuals looking to diversify their investment portfolios (and also have some fun) by investing in startups. Angels often specialize in verticals they are familiar with. Angel funds are clubs of angels who like to invest together. Angel investors get an equity share in your company for their money, or, as is increasingly common, will loan you the cash as convertible debt. In this structure, interest accumulates and only when the next round of funding puts a firm valuation on your company will the principal and accrued interest be converted in equity. This saves you from valuing in too early a stage when value is still very hard to determine.

Strategic angels are people or companies working in your domain or industry. Not only will they provide the cash –as above- they will also come with expertise, contacts and legitimacy to your young company.

Venture Capitalists are investment firms that specialize in taking stakes in youngish companies. Most VC’s tend to specialize in specific verticals such as nano- or bio-tech. VC’s offer larger investments and tend to operate in a more formal manner. Do not underestimate the time involved with paperwork and due diligence once you get involved with a VC. The good thing is that VC’s are much easier to find than angels.

Investors are people who invest in people, so get to know them before you need them. Relationships matter a great deal and take a long time to develop, so you’d better start early. Get involved in the local entrepreneur and venture capital community and get known. Use social networks like LinkedIn to leverage and grow your personal network and connections. Blog extensively in your area of expertise and establish yourself as domain expert.

At the same time, do your research on angels and investors. Find out what they invest in, at what stage and how much. Build connections with such investors and again, offer your help with suggestions for ventures that may be of interest to them. Learn as much as you can about their personal backgrounds and talk to companies they have invested in. If you are going to work with an investor shareholder for 5 years or longer, you really want to know what kind of person you’re dealing with. Get to know them before you need them.

You will of course never approach any investor before you have completed your detailed business plan. I do not mean just the written document with elaborate spreadsheets, but the entire thinking and research process that must precede a new business. No single investor is like any other and no pitch is ever a copy of a previous one. Make your plan and your presentation appropriate to your audience, your stage of company development and of course to your objective.

Be ready to pitch a lot, all the time. Refine your pitch, listen and improve. Ask for help from mentors, accountants and lawyers, not to forget seasoned entrepreneurs.

Never stop the fund raising process, build your network with investors and become known as a knowledgeable and serious player in your industry.  When you need the investment, you do not want to start from scratch.

When it comes to larger investment amounts for equity stakes, funding usually comes from professional third parties. You’re no longer pitching an idea; more likely your company has achieved some early milestones, will have its first customers and generally displays good prospects for traction.  You will need to approach these investors in a highly professional manner.

Be very selective who you bring in as a shareholder and on what terms. Control does not come with your job title, but with your share of the company. Once you have lost majority ownership you may no longer recognise the company you started.

If you are looking for seed financing, or early investment, you may want to find and angel. Angel investors are wealthy individuals looking to diversify their investment portfolios (and also have some fun) by investing in startups. Angels often specialize in verticals they are familiar with. Angel funds are clubs of angels who like to invest together. Angel investors get an equity share in your company for their money, or, as is increasingly common, will loan you the cash as convertible debt. In this structure, interest accumulates and only when the next round of funding puts a firm valuation on your company will the principal and accrued interest be converted in equity. This saves you from valuing in too early a stage when value is still very hard to determine.Strategic angels are people or companies working in your domain or industry. Not only will they provide the cash –as above- they will also come with expertise, contacts and legitimacy to your young company.

Venture Capitalists are investment firms that specialize in taking stakes in youngish companies. Most VC’s tend to specialize in specific verticals such as nano- or bio-tech. VC’s offer larger investments and tend to operate in a more formal manner. Do not underestimate the time involved with paperwork and due diligence once you get involved with a VC. The good thing is that VC’s are much easier to find than angels.

Investors are people who invest in people, so get to know them before you need them. Relationships matter a great deal and take a long time to develop, so you’d better start early. Get involved in the local entrepreneur and venture capital community and get known. Use social networks like LinkedIn to leverage and grow your personal network and connections. Blog extensively in your area of expertise and establish yourself as domain expert.

At the same time, do your research on angels and investors. Find out what they invest in, at what stage and how much. Build connections with such investors and again, offer your help with suggestions for ventures that may be of interest to them. Learn as much as you can about their personal backgrounds and talk to companies they have invested in. If you are going to work with an investor shareholder for 5 years or longer, you really want to know what kind of person you’re dealing with. Get to know them before you need them.

You will of course never approach any investor before you have completed your detailed business plan. I do not mean just the written document with elaborate spreadsheets, but the entire thinking and research process that must precede a new business. No single investor is like any other and no pitch is ever a copy of a previous one. Make your plan and your presentation appropriate to your audience, your stage of company development and of course to your objective.

Be ready to pitch a lot, all the time. Refine your pitch, listen and improve. Ask for help from mentors, accountants and lawyers, not to forget seasoned entrepreneurs.Never stop the fund raising process, build your network with investors and become known as a knowledgeable and serious player in your industry.  When you need the investment, you do not want to start from scratch.