When the well-known Seattle-based venture capital (VC) firm StagedotO decided to move to Boise, Idaho, in 2019, they also planned to invest $50-million in local tech start-ups.
The top brass at the company had been keenly watching the Boise region for some time, according to sources. They were impressed by the opportunities that the city presented in terms of growth and a business-friendly environment. They also plan to bring in more of their outside clients into Boise mainly because of its lower cost of doing business.
This is just one of the instances where VCs seem to be making a beeline for the city in significant numbers.
The industry itself has undergone an enormous transformation, especially during the pandemic situation. Algorithms, AI, machine learning, and new tech innovations have emerged as super-smart ways of identifying winners accurately.
So, what is it all about?
While venture capital firms have acquired an ultra-glamorous image over the years, they’re at heart private equity financing companies. They offer to fund emerging businesses, start-ups, and high-growth potential early-stage companies. This funding is usually offered in exchange for a share of equity in the company or an ownership stake.
In a sense, these are essentially unsecured loans.
The VC offers “seed funding”, angel investing, or crowdfunding methods of raising the money, thus making it convenient and easy for small firms and start-ups to raise funds that may not be available to them via conventional sources such as bank loans and or a debt offering.
In general, a typical VC firm comprises a few partners who have good contacts and leads about other persons/sources that may have funds to invest. When the business matures enough and takes off in a big way, the VC can exit, providing excellent returns to the original investors.
The main principle that enables VCs to succeed is how much the VC firm can take for itself before profits have to be transferred to investors. Usually, firms take in between 25-30% so a very successful VC firm can expect to make profits in the region of $10-20 million.
VCs also charge a processing fee to their investors in the region of 2-2.5% and partners in the firm can expect to draw a very attractive salary.
The VC industry in the US is worth billions of dollars and is strictly regulated by the Securities and Exchange Commission.
For all its high-return, ultra-cool and glitzy image, VC can be a risky business, fraught with hurdles.
The success/failure of a VC firm hinges on the qualities that the partners bring to the table. Hiring and retaining talent can be a challenge.
It’s almost impossible to predict and completely out of the question to control how a start-up or fledgling business will pan out. Though the VC research teams would have done their due diligence in terms of growth potential and competitive advantages, ultimately, market trends are the ones that chart a firm’s destiny.
Government regulations overreach, corporate theft, copyright infringements, theft of intellectual property, and patent violations could destroy an early business.
That is why VCs require a sturdy and well-thought-out exit strategy.
These are the aspects that VCs must keep in mind when they take on new talent to promote.
One of the most important jobs of a VC website is to attract and retain the right type of firm to invest in.
Your website is your calling card, brochure, and marketing department all rolled into one. It’s also your assistant in tracking visitor behavior, getting feedback and reviews, boosting social media connections, and tracking market trends.
The website’s major goal is to convey your VC firm’s USP and what sets it apart from the thousands of others on the net. A big part of this would be to showcase the partner talent you have on board because ultimately it’s people who make or break a brand.
It should also make it easy for potential clients to get in touch with you easily and explore your ongoing and past projects.
If you would like to service a niche market, your website can convey this through the portfolio.
Websites also serve to educate and inform visitors/clients about industry news, innovations, new regulations, and more.
If you’re moving to Boise and setting up your VC firm, pay lots of attention to your website and get it right from the word go. Talk to your team and get their inputs because you need buy-in from all.
Analyze Your Needs, Preferences, and Budget: Know what you need, what you want, and how much money you can afford to spend on website design.
Are options Available: Would you like to work with a freelancer, reputed website design company, or an overseas outsourced firm? All these have their own advantages and disadvantages.
References: Get referrals and word-of-mouth recommendations from trusted sources. Look at VC websites you admire and keep them in mind when you’re talking to designers.
Portfolio: helps you to understand and appreciate a designer’s work first hand. Don’t get fobbed off by screen-shots. Insist on looking at real-time websites. Talk to former clients and understand the process of working with this particular designer.
Experience: Paradoxically, though VCs specialize in promoting fledgling firms, when it comes to website design, opt for an experienced designer. This saves you time, money, and effort in explaining the basics of what you do. Select a designer who has proven success in creating websites for VCs, though most designers are multi-talented and can transit their skills across industries.
Pricing: Cheap won’t get you the best. While it’s important to firm upon your budget, ensure that you don’t select a designer simply because they come cheap. A lower quote could mean that the designer cuts corners elsewhere, doesn’t offer support, maintenance, or updates. Read the contract carefully before you sign up and watch out for hidden items that could kick in a few years down the line.
Tech: With a huge majority of Americans spending time on mobile devices, it’s important that your website connects to them wherever they can be found. Your designer should be savvy with SEO, responsive design, and omnichannel marketing.
Overall: The look and feel you need is simple, easy to navigate, clear, with smooth transitioning between pages. The branding must be strong and memorable, stylish and classy.
Image Source – FreePik