How A Venture Capital Fund Operates:

Depending on the maturity of the business when the investment is done, venture capital investments can be seen as early-stage capital, seed capital or expansion-stage financing. However, the investment stage does not affect how venture capital funds operates.

To begin with, before making any investments, venture capital funds, has to raise money. Potential investors are given a prospectus of the fund after which they commit money to. Once a commitment is made, the fund's operators call all the potential investors and finalize individual investment amounts.

After that, private equity investments that have the potential of generating positive returns for its investors are sought out by the venture capital fund. This process involves the fund's manager reviewing business plans in hundreds, searching for potentially high-growth companies.

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Early Stage Venture Capital

In addition to our management consulting practice, Brainsmiths Labs invests in select startup companies via direct financial investment or a combination of direct financial investment and consulting services.

We are entrepreneurs looking to invest in other entrepreneurs to help great ideas become great companies. Brainsmiths Labs provides capital and management support for startup companies and their investment strategy – from “A demo and a deck” through to Seed and up to Series A funding. We also help other early stage investors by bringing our consulting services to start-ups, enabling them to operate more efficiently and to achieve both their and their investor objectives.

Our Investment Strategy

Our strategy is to build and maintain a portfolio of startup companies that represent high growth opportunities in potentially disruptive technologies. We are experienced with the risks of early stage venture capital investments and believe in the power of entrepreneurs and their ideas. We have ourselves started successful companies and invest in people with passion, experience and management consulting practice knowledge.

What We Provide

We make either a direct financial investment or a combination of direct financial investment and management consulting services. Our investment vehicles can be either equity or convertible notes. We work actively with very early stage companies to help them refine their product/services concept, and their business and investment strategy and provide hands on management services.

As needed, our professionals work with and for a startup company to support a range of activities including performing market due diligence and analysis, business case development, optimizing product development processes and performing product QA and testing.

Our Process

  • Screening: A screening meeting with one of our Partners – if there is mutual interest, we will begin due diligence immediately.
  • Due Diligence: We will review the team’s background and track record. We will verify the idea, the addressable market, the business plan, presentation, and financial projections.
  • Partner Review: After screening and due diligence, one of our Partners will present the investment opportunity to the Brainsmiths Labs Partner team with his or her recommendation. The Partner team will make a collaborative investment decision and determine the type and level of investment.
  • Investment & Options: Once we have decided to invest we will discuss investment timing and options.
  • Ongoing Support: After our investment we will stay engaged with the startup to receive updates and provide ongoing advice, support and network opportunities. As needed, we may have one of our staff work with your team.

Business Plans For Venture Capital Funding

Venture Capital funding requires a business plan that the firm furnishes before the investors to convince them that their business venture shall be a success and thus leading them to invest in the venture. For an effective business plan the following key points should be addressed:

  • Executive Summary: An executive summary forms a brief of the whole business plan which like any other synopsis of a document gives a clear idea on what it is all about. An important part of the business plan, an “Executive Summary” helps cultivate the interest of an investor to read further.
  • Company Analysis: The Company Analysis is a complete scan of the company. It answers various questions that an investor might be interested to know about. The questions can include: what a company does, its area of functioning, and the products or services of the business, product or services details.
  • Industry Analysis: This part of the B-Plan provides a complete picture of the industry that the company will operate in. The importance of this analysis can be understood by the fact that any investor would like to thoroughly understand the industry in which the company will deal. It includes industry size, trends, segments etc.
  • Customer Analysis: As the name suggests, customer analysis is the evaluation of the business’s target market. It is vital for a business to understand and define its target audience. This ensures the investor that the entrepreneur understands the business and the audience it is intending to serve.
  • Competitive Analysis: The Competitor Analysis helps an investor understand the company’s peers and how the company will aim to differentiate itself from others. An audit of the operational and financial numbers of the competitor gives an insight into what benchmarks should be considered for the company’s founders and what it should look to achieve in the coming years.
  • Marketing Plan: The marketing plans give out the strategies to reach out the target audience; showing how well planned is the business idea. The marketing plan isn’t limited to gain customers but also includes the strategy to help the brand reach the general audience and leaving a mark.
  • Operations Plan: Operating in a market with competitors and a dynamic audience, the operations plan lays out the strategy of the company. Operations include every small detail about the functioning of the company, communications within its verticals and a well-planned approach towards reaching the goals of the business.
  • Financial Plan: The financial plan includes the actual numbers (if any) and forecasts of how the business projects itself and where it sees itself in a matter of a few years (3-5 years projections).

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