In the old-fashioned fairy tale, the hard-working Cinderella had a fairy godmother who turned a pumpkin into a golden coach so that she could go to the ball. In the modern-day fairy tale, the hard-working entrepreneur or developer has a venture capitalist waiting in the wings to invest millions in the newest technological gizmo or medical development. Our ancestors believed that those who were hard-working and law-abiding would be rewarded, either by fairy godparents or Santa Claus. However, since we belong to a more hard-headed and materialistic age, we wonder how much money a venture capitalist would invest in a particular business.

The amount of money venture capitalists will invest in your business depends upon how much money your business needs to reach its full potential and the kind of return you can promise within a certain period of time. These returns depend upon the economic situation that prevails when you receive your investment capital and the condition of your company in terms of its management, operations, finances, sales, and marketing. These factors determine how well you can leverage the investment to your advantage and that of your investors.

To get the best results from a venture capital investment, your business should be associated with the latest developments in science, technology, or medicine. If you have designed a new kind of mobile phone, can develop a medicine to treat a genetic disease, or have studied how to utilize a reusable source of energy, and you are a good manager of people and resources, you can set up your own business and wait for the investors to call. Most venture capitalists prefer to focus on areas of the economy and markets that have the potential to grow over a long period of time.

Venture capitalists normally shortlist businesses that have been in operation for at least five years, are basically well-managed, and only need capital to reach their full potential. To prove your credentials, you will have to not just provide your own assessment of the economy and the economic sector with which your business is associated, but will also have to provide an analysis of yourself, your managers and colleagues, your competitors, and the market. You will also have to provide venture capitalists with your cash flow analysis and statements, along with personal and company tax records, a list of assets and liabilities, and detailed information on your operations, finance, sales, and marketing departments. The venture capitalists to whom you apply for investment in your company will study the information you provide and will give you the financial help your business needs to grow.