Can Getting Funding From Venture Capitalist Work For Your New Business?

When you first start a new business (i.e. a startup) in Hong Kong, you will have many areas to worry about and you would try your best to make sure most of the items are being taken care of. But it is never that easy. You can invent a product to a very specific niche of audience, which is great. But when your business enters the next immediate stage, it is the time you will feel the struggling. The main struggle would come from the pressure for a faster growth, though it is not yet an explosive growth where most venture capitalists have been expecting.

These are the problems with Venture Capitalists when your business is at the startup stage. Let’s examine. Venture Capitalists (VC) directly invest into companies in exchange for equity stakes in the startup business. Venture Capital companies are partnerships that invest company money, and they tend to be highly selective on who they should invest. Usually a VC would invest only in businesses that are already established and have shown much capability to generate profits. The end objective of venture capital companies is that they need to invest in a business hoping to cash out their equity stakes. The even better goal is when the business eventually holds an initial public offering (IPO) or is sold to a larger and more established corporate. The competition for VC funding can be very intense. A single individual VC company may receive more than 1,000 proposals a year and are mainly interested in startup businesses that can already show a lot of potential i.e. explosive growth potential such as from 1,000 users to 1M users in the space of a year.

One solution is to get help from InvestHK (or Invest Hong Kong). It is an organization that can provide support to start-ups with planning, setup, launch, and expansion. InvestHK is government based, and has industry-specific expertise in quite a few areas such as business and professional services, consumer products, tourism, financial technology, innovation, etc. Through this organization, you will have a good chance of meeting potential investors who may be willing to fund your startup.

Another solution is to do some researches and find the right angel investor. Usually many angel investors are willing to provide financial support (or funding) which can get your startup business off the ground. At the same time, you can leverage the business/industry-specific experience of the angel investor when they share their past experience of how they have created one or more successful businesses.