If you’re seeking venture capital, never give up. Take inspiration from other people who’ve tried something hundreds of times before they were successful. Each time you get a no, use it productively. Take the feedback and change what you need to.  

Simona Hughes, business adviser with Financial Utilities, which is affiliated with the Carbon Group, says the people behind a project are usually more important than the project itself. Get a team of people behind you who have experience in the different areas you need.  

Here’s a rough guide to the venture capital process and timeline. Each step provides a chance to learn from the challenges: 

Seed 

You’ve already done some early research and development for your new product or service. You haven’t yet worked out the commercial opportunities, and at this point you need to test your concepts’ potential with some early market testing. This is the point where angel investors and venture capital funds are increasingly competing for investments in the $500k to $2million range.  

At this stage you’ll need to have a plan. What exactly do you expect to have at the completion of your venture capital journey? What are the measurable parameters?

Use the plan to help make decisions about the next steps. Use an advisor or business mentor, or people you meet in Perth Angels, a not-for-profit that helps with business mentorship, networking, support and investment capital.    

Startup  

You’ve pretty much finished testing your concept or products, and you need to decide whether to proceed. Usually you have a prototype but haven’t really tested the market. You need more money to make your product or service better, to hire more staff and maybe do more research. You’re still not at the commercial manufacturing or sales stage yet. You’ll do some more market testing at this point.   

The first stage  

This is around the time a product or service hits the market. You’ll know what it costs to have a product in full scale production and some of the venture capital goes to manufacture, sales and marketing.

This stage usually has the highest amounts of funding. Now, you can really hone in on why people are buying or not buying your product, what the competition is doing and forensically ask your marketing questions.

You’ll also be working through all the problems that come with full production and producing a steady flow of your product or service. It is important to find out what problems and challenges you have and work through them because it could change what you’re offering, often for the better.  

Expansion/growth stage 

Here, the money and expertise of venture capital will help you with product improvement or possibly diversification, further marketing, expansion and growth. Maybe at this stage you’ll get your first major sale to a big account or a significant distributor.

You’ll start to see some profitability in here. You’ll also see that competitors are responding to your product in the market, and you will be working out ways to respond to them.

You’ll also be checking whether your product or service needs changing, and if it’s pricing needs changing. This stage is also sometimes called the second or third stage.  

The bridge or mezzanine stage  

This is the last step of venture capital financing. Here your company is mature, and the money you receive will help you transition to becoming a complete viable business.

It may also help with your initial public offering (IPO), merger or acquisition.  Many investors may choose to capitalise on their investment at this point and end their relationship with your company.