Video Venture Capital in Detroit, Among Other Places (Video) 36
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If you have a startup idea kicking around in your head, you don't necessarily need to head for California, New York or Massachusetts to find venture capital. In today's video, Timothy Lord visits a venture capital firm called Detroit Venture Partners. (Yes, it's in Detroit.) This not an intimidating company, even though it has some big bucks and big names (including Magic Johnson) behind it. But this doesn't mean you need to rush to Detroit to fund your million-dollar idea. There are lots of local venture capital companies in the U.S. -- and chances are, wherever you are, there's one near you that's panting to invest in your can't-miss business opportunity.
Re:Be careful (Score:5, Informative)
You're right, there are a lot of scammers out there, and that gives the real guys a bad name.
I used to work for a legit firm. Here's a few tips (totally anecdotal) in case you're interested.
1. See how fast they move
If they're trying to close the deal after one or two calls, beware. Proper firms will vet the idea, invention through several channels, as well as having lots of internal discussion before closing a deal. Even if the firm is just a few people, lots of consideration goes into each opportunity. Unlike scammers, who are wham bam thank you entrepreneurial maam.
2. What other companies are in their portfolio
Just like the parent mentioned, investigate their portfolio. Don't look for a lot of companies. Rather, look for companies that seem to have a legitimate product or service they are marketing to a known (not necessarily established) marketplace. Note: some of these companies won't have websites or huge public faces yet, that's not bad necessarily, it could just mean they are young.
3. Get a second, expert opinion
Search your network and find someone you know who's dealt with an investment banker or VC before. Tell them in vague details what you've experienced, and see if they identify any red flags.
Angels and VCs are a great way to bring an idea into reality. Don't be afraid, be careful.