A Guide To Starting a Venture Capital Fund

It is a mistake to think that the only way you can make an impact in the startup world is by being an entrepreneur. Let’s face it, a lot of entrepreneurs fail. That is because it takes more than just a great business idea and great managers for a business venture to succeed, it takes true vision from their leaders — that is something that absolutely cannot be faked and a lot of startup founders simply do not have it. 

The other way you can make a great impact for startups is by becoming a venture capitalist. After all, these companies would not become as big as they are if they did not get the funding that they needed from brilliant investors who are able to look at more than just their bottom lines. If that sounds interesting to you, here is how you can start. 

  1. Find Your Specialty

The first thing that you have to consider if you want to become a venture capitalist is that it is impossible to know everything. Heed the advice of one of the greatest, if not the greatest investors of all time — the legendary Oracle of Omaha Warren Buffett. He says that investing is like playing a game of baseball but with the added advantage that you cannot ever be counted out if you never swing at the balls that are thrown at you. You can take your time and swing only at the balls that are coming to you at familiar angles, balls that you are sure that you can hit out of the park. The same logic applies when it comes to venture capital, you do not have to know everything. You just have to know what you specialize in and invest in companies that fall within that domain.

  1. Get Funded

Now that you have found your specialty, the next thing that you have to focus on is to get already existing investment firms to buy into your expertise so that they can get you the funding that you need to start your own fund. Let’s face it unless you are already fabulously wealthy, you simply cannot be a venture capitalist without getting the money to invest in from other investors. 

You may be wondering why investors would ever use that money to invest in other investors when they can allocate that money themselves and make a larger return on investment without having any of it going to another firm, but venture capital firms are wise enough to detect certain advantages that they simply do not have themselves. Learn about your own advantages and pitch it to them and they can help you get started with an adequate amount of funding. 

  1. Join Conferences

Now that you know what types of companies you want to invest in and have an adequate amount of funding, the next thing to do is to network. There are various resources that are available to you that you can try out initially. If you are not an established venture capitalist, it is unlikely that startups will be coming to you for money first because your firm will be eclipsed in the shadows of the giants in the beginning. If you learn to reach out to these founders by going to various conferences and events, you will be able to put yourself on their radar. 

As you can probably tell, that is a lot of hard work. The other option that you have is just to leave the investing to the professionals and invest your money in their fund instead so that their success will be your success. One of the best new VC firms that you can turn to is the M13 Venture Capital Fund. Reach out to them and together, you can make a serious impact in the world of startups and entrepreneurship.