Thursday, September 10, 2009

Capital West Advisors Reveals its Capital Introduction Strategy & Analysis

Capital West Advisors has approximately 1000 Venture Capital firms and 100 Angel Networks in its database.

The first step in the capital introduction process involves identifying every Venture Capital firm and Angel network that is appropriate for the particular client that is seeking capital. In the event that the client is looking for $250,000 to $2.5 million, Capital West Advisors will typically submit the business plan to only Angel Networks and possibly a few venture capital firms; when a client is looking for $2 million to $25 million, Capital West Advisors will typically submit the business plan to only Venture Capital firms and possibly a few Angel Networks. After Capital West Advisors identifies the appropriate investment firms and networks, Capital West Advisors will submit the business plan, executive summary, and financial statements, and follow up as extensively as possible with each venture capital firm. Capital West Advisors follows up for up to 3 months with each and every venture capital firm and Angel Network to ensure that it has been For both Venture Capital and Angel Network introduction campaign. The follow-up process is the single most important component to the capital introduction campaign and requires an extremely extensive follow-up with each and every venture capital firm and Angel Network.

The process of submitting to Angel Networks is slightly different than the process of submitting to Venture Capital firms. Submitting to Angel Networks is a highly more extensive submission process which often requires the filling out of comprehensive 1-4 page applications in a high quality format. Venture Capital submission is typically done through email or website submission. The vast majority of Angel networks will invest in only a specific geographic region, which could represent a city, state, or tri-state region. There are approximately 8 out of 100 Angel Networks though that will invest anywhere throughout the United States. The majority of Venture Capital firms also have some type of geographic focus; however, it is typically a wider geographic focus and approximately 35% will invest in companies located anywhere in the United States; however, the majority of these ‘open-minded’ venture capital firms will still lean towards companies with a few hundred miles of where they are located.

Capital West Advisors will target a specific Managing Director that focuses on the particular industry or the appropriate Associate during its follow-up, which at times can represent several people, but will typically, include 1 or 2 individuals at the firm. Capital West Advisors database is organized by several investment criteria, including geography, industry focus, investment range, company stage, and financial requirements.

The industries that venture capital firms are currently investing the most in include alternative energy, biotechnology, medical device, healthcare, software, Internet, Datacom, Business services, and consumer products.

Angel Networks typically have 50-400 Angel Investors and the Managing Directors of the Angel networks act as gatekeeper for further forwarding to specific investors that would look at the particular industry, consideration for future meetings and events, and several Angel networks allow the each posting to be reviewed on the website. The majority of Angel networks focus on a specific geographic region (either a particular state or few states), but there are 7 national Angel networks (worth mentioning) as well.

Venture Capital firms raise funds from groups of investors, funds, and businesses and invest according to a specific range of investment criteria that they define as they raise the capital to be invested. This investment focus can vary substantially and can be either very narrow or very wide; however, the majority of venture capital firms have between a narrow and middle of the road range of companies that they will consider.

Capital West Advisors specifically hand-selects every Venture Capital firm or Angel network that it will submit and follow-up with on behalf of their client and that figure will typically represent 50-200 Venture Capital firms or 10-20 Angel networks.

Capital West Advisors only gets involved with clients from a capital introduction perspective, who have a viable chance of raising capital and represent a solid investment opportunity for Venture Capital firms or Angel Networks. Factors that both Capital West Advisors and investors consider include the strength of the Management team, Stage of Concept, Historical Financials, marketing & distribution channels, strength of the market, size of the market, # of competitors.

Capital West Advisors will place Managing Directors to be involved from a business planning and capital introduction perspective that have specific experience in the industry that the client is involved with.

Capital West Advisors submits the business plan, executive summary, and financial statements to every prospective venture capital firm and Angel Networks.

Capital West Advisors’ business plans typically contain a Company Overview, Market section, Marketing plan, Operational plan, Management & Staff, Financing & Growth Strategy, and Financial Plan sections.

The Executive Summary is typically either the first section within a business plan or can be used as a separate individual document. Capital West Advisors separates the Executive Summary from the core document if this is what the client requests. The Executive Summary typically range from 3-7 pages (depending upon the sophistication of the business model and layout used). The Executive Summary provides a snapshot of the company and the business plan, and it summarizes each of the core sections of the business plan. The Executive Summary must be very concise, well organized, and must successfully and continuously promote the core strengths of the business model. Capital West Advisors often has 2 Managing Directors review and work on the Executive Summary to ensure that it is developed on a maximal level.

Capital West Advisors financial statements are typically 5 Year Income Statement, Balance Sheet, and Statement of Cash Flows broken down Monthly in Year 1 &2, Quarterly in Year 3 & 4, and Annually in Year 5.

Capital West Advisors Contact Information:

Capital West Advisors

9107 Wilshire Blvd. #450

Beverly Hills, CA 90210

(888) 300-3090

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