What is Venture Development?
Venture development is the process of identifying and funding new opportunities. These opportunities can be anything: a new business, a new technology, or a new product. Many companies in the world are still sticking to traditional ways of doing their venture development work, but there are many different ways to do this process in order to find the best results for your company in an efficient way.
Why you need Fintalent’s Venture Development Consultants
With an understanding in how venture development works, you can improve your chances of success when tackling this process for your company. Venture development can be done at many different levels such as raw, pre-seed, seed, angel, and venture capital. Venture development is important because it provides a way to use money efficiently in order to bring your idea to fruition. It also helps startups make solid connections with investors and gives the company a way to create a viable product before they try and market it to potential customers.
Venture development is the process of looking at new opportunities and funding them in order to build a startup. It is important to understand this process so that you can find your money and build your startup without failure. Not knowing what venture development is or how to do it could put you in the wrong place at the wrong time.
Venture Development is very different from traditional financing. Most financing requires a lot of paperwork, legal documents, and most importantly, an exit strategy. A conventional definition of venture development is very different from what most small business owners think it means: “A venture is defined as an opportunity with a high risk and reward potential: the possibility of either great success or ultimate failure.
The difference between venture and start-up is the experience of the management team, in particular in identifying promising opportunities, building a team, raising capital, etc. In the absence of an experienced management team to handle a firm’s venture development, Fintalent’s Venture development consultants and experts can easily bridge this gap by bringing their wealth of expertise to bear in a firm’s endeavour.
How Fintalent’s Consultants Carry out Venture development
There are five key stages our consultants apply during Venture Development:
- Identification of Opportunity
- Development of Opportunity
- Evaluation of Opportunity
- Creation of Business Plan
- Implementation of Business Plan
For the first stage to work correctly, there needs to be a clear understanding of what stage your company is in. There are two main stages that companies can be put into: startup and venture. A startup is defined as “a new company providing a product or service, typically at an early stage of development.” A venture is “an opportunity that has already passed the startup phase and requires more funding to bring it to completion”. Both stages will have different procedures for getting your product/business off the ground, but these procedures are used for both types.
When looking at ventures, there are three different kinds of ventures that companies can do based on their market approach:
- Product-Market Penetration
- Product-Market Development
- New Market Development
Each of these ventures has different levels of venture development that is required in order to get the venture started.
- When looking at the product-market penetration stage, companies are done with the development stage and are ready to start making money. The purpose of the venture is to “identify an unfulfilled, prospected need in a given market, create a workable product or service that satisfies that need and then convince buyers who do not currently buy or use that product or service to purchase it.” This strategy requires very little in the way of startup capital in return for large potential earnings in the future.
- In the product-market development stage, companies are in the process of making a profit and need additional capital to “expand into markets that do not represent a significant proportion of their current revenue or customer base.” In this stage, there is a need for the company to “develop new ideas and enter new markets.” This is often seen as an opportunity to take on more risk by going into new territory.
- In the new market development stage, a company is considering an expansion in a market that they have already been in or in a new territory. Here, there is a potential for profits with no risk, but it will take some time for this profit to come in.
- Many companies use different forms of venture development when looking at new opportunities in both the product-market penetration and the new market development stages.
- When choosing what form of venture development to use when looking at different opportunities, you need to think about how much time, work, and money will be needed when trying to get the company off the ground.
- There are many different stages in traditional venture development, but there are even more out there that are specific to your business model. Many startup entrepreneurs have used these non-traditional models with great success.
- Venture development can be seen as a process that is meant for “high-risk, high-potential opportunities” and not for ideas that are already proven. Venture development is meant to test concepts and ideas before they are brought to the public. This way, you can make sure that your idea/concept will actually work before putting it out there for everyone to see.
A great way Fintalent Experts show how traditional venture development works is by showing an example of what is involved when starting a business.
It has been said that when entrepreneurs are “looking for funding for their new ideas, they must look at their new idea in relation to the existing business model of the person who is giving them money”. This means that you will need to show not only creative thinking but also creative approach in order for your venture to be successful.
- A creative approach can be seen by how many different sources clients get their money from. Most people use the traditional methods of getting capital through an investment banker, using an angel investor or friends and family (F&F). However, this is becoming less and less common with the rise of new ways to get capital for startups by experts.
- If you are getting capital from an investment banker, there is a lot of paperwork and legal documents that need to be signed in order for this process to work. In fact, the paperwork needed in order to get VC funding is so extensive that it has been said that most VC’s will not even look at a business with less than 3 years of operating history with an annual revenue of $1 million. This means that companies need to not only have a great idea but also a great product, a solid team and a well-drafted business plan that shows they have taken the time to think through every aspect of their new venture.
- Angel investors can be a great source of capital but they will not provide the same level of support from a legal and financial point of view as VC’s. However, this is also changing with companies like Angel List which allows entrepreneurs to post their ideas for investors to browse through and see if there is any interest in them.
The Venture Development Process has been modified in some new ways to better meet the growing needs of today’s small businesses. Several new technologies exist that can be repurposed into different ventures or “technology bottlenecks”. New markets, business models and businesses are created every day that are not represented on traditional venture development types thus creating new ventures leading to newer types of venture development.
Do you need a Venture Development Expert?
Venture development and innovation is visual and verbal in nature. It is essential to make sure clients clearly understand what they need to do and how their company will be successful. The process is multi-faceted and can take many different forms depending on the specific venture. What however can make the process a lot easier and less complex is hiring one of Fintalent’s venture Development Consultants to help iron out grey areas and develop any such venture.