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Choosing the right venture capital firms is an important
part of the fundraising process. An
entrepreneur that has not researched and targeted venture firms
runs the risk of lengthening
the search and over shopping the plan. Venture capitalists readily
exchange information, so
rejection from one firm may influence others.
The criteria for selecting the right venture capitalists to approach
include their geographic,
industry specialization, stage of development, and size of investment
preferences. Also
important are whether the fund will act as a lead investor and whether
there are
complementary or competing investee ventures within the fund's portfolio.
The research of a fund's preferences can be done by obtaining literature
from the funds
directly, or talking to venture-backed entrepreneurs.
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