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Almost all startups will need external financing sooner or later. While it appears to be a straightforward process, obtaining startup funding is rather difficult as new entrepreneurs rarely have any formal training in raising funds for their business. Attracting and negotiating with investors is a crucial skill that needs to be developed if you want to maximise the value of an agreement.

Being a strong deal-enabler enables you to negotiate better prices to maximise the value in service agreements, which ultimately benefits the financials of your organisation. An entrepreneurship online course prepares budding and active entrepreneurs for the ability to secure funding for their companies. It elucidates several key financial concepts which can be used to negotiate better deals with investors.

In the following article, we take a look at the benefits of online entrepreneurship courses in terms of securing financial backing for a new venture by understanding some key concepts taught in such programs.

How venture capitalists make investment choices

Despite facing enormous risks, VCs make large bets on new, untested ventures in risky markets. To improve their chances of securing funding for their ventures, entrepreneurs need to start by learning how angel investors and venture capitalists make investment choices. The more criteria they can fulfil, the more likely they are to secure investment. Here is a brief about the key considerations taken into account when evaluating a potential investment.

  1. Size of the target market

VCs usually place their bets on businesses that will eventually target a large, addressable market opportunity. While “large” can be a subjective term, it usually means large returns worth multiple millions, if not more. The bigger the target market, the greater the chances of securing financial backing subject to product demand. Entrepreneurs need to demonstrate business plans that include “top-down” and “bottom-up” market sizing.

  1. Validation of business idea

Business validation refers to the process of defining the need for a product in the target market. Validation helps entrepreneurs and investors predict reasonably if the target audience will buy their products or services, and whether the business will be profitable. Investors want to invest in great “disruptive” products and services that will hold a competitive edge in the long run. An online entrepreneurship coursenurtures creativity and critical thinking that helps students come up with such innovative products.

  1. Management skills

Investors don’t simply invest in products – they invest in a plan and the management’s ability to execute it efficiently. Even if the business has a great product, the lack of talented managers can be a hindrance when securing funding; they would prefer to invest in a mediocre idea led by accomplished management than a great idea led by inefficient managers. Entrepreneurs need to demonstrate that they possess solid managerial skills and can execute the business plan while mitigating losses in the process.

  1. Risk assessment

An investor’s job is to take risks; naturally, they will want to know what they are investing in during the early stages to avoid incurring huge losses. They assess risks based on several factors to measure, evaluate, and mitigate risks and entrepreneurs will need to demonstrate clearly what their business has achieved or can achieve over 5- and 10-year horizons.

What will you learn from an online entrepreneurship course?

  • The early-stage investment landscape

An entrepreneurship courseis dedicated to providing critical insights into the investment landscape and how investors and venture capitalists evaluate businesses as investment opportunities. Students learn the importance of starting with a solid business plan that demonstrates their managerial skills, the ability to read beyond the numbers in financial statements, create balance sheets, etc. Apart from economics, it also teaches various frameworks so that entrepreneurs can select a corporate structure that best suits their unique proposition.

  • Various sources of capital

An entrepreneurship online course also provides insights into various options available to investors when raising financial capital for their venture in its early stages. Students are taught about the various sources of capital and the pros and cons of each source. With formal training from experienced sources, students can learn to evaluate if their business will benefit from incubators and accelerators or bootstrapping. Sound knowledge about the various sources of startup fundingsubstantially improves the chances of securing funding in the long run.

  • Steps in the funding process

An online business entrepreneurship program also provides insights on how aspirant businessowners can formulate a comprehensive funding strategy. They are taught about due diligence, how to evaluate the worth of their company, how to negotiate term sheets, and how to establish a common stock. Entrepreneurs with robust knowledge of the steps in the funding process can create a business plan that has a better chance of securing funding. In addition, businessowners can work towards securing funding for various stages of their business plan and maximise their working capital.

  • How to pitch to investors and close deals

As discussed earlier, venture capitalists do not simply invest in a product. The entrepreneur has to convince the investors that their product is worthy in the long run. An entrepreneurship online course enables individuals the ability to convey a compelling story for their new venture with the help of pragmatic tips about the dos and don’ts of elevator pitching. You will learn about the most effective ways of telling your company’s story and how to combine this with your business idea to close a deal with an investor.

  • How to pitch to investors and close deals

As discussed earlier, venture capitalists do not simply invest in a product. The entrepreneur has to convince the investors that their product is worthy in the long run. An entrepreneurship online course enables individuals the ability to convey a compelling story for their new venture with the help of pragmatic tips about the dos and don’ts of elevator pitching. You will learn about the most effective ways of telling your company’s story and how to combine this with your business idea to close a deal with an investor.

Modern businesses focus a lot on corporate social responsibility (CSR). Investors are more likely to invest in ideas that develop society as a whole. In an entrepreneurial environment, previously unutilised resources, labour, and capital are used to drive innovation. Successful entrepreneurs usually work towards bringing the latest technologies to unfamiliar markets. Formal courses on entrepreneurial training and venture finance programs prepare students for their role in promoting social changes on a global scale.

Entrepreneurship online courses are targeted toward aspiring and experienced professionals who are preparing for the financing round. That said, the skills obtained in these courses are not uniquely relevant to a career as an entrepreneur. It teaches various life skills that can be applied outside the scope of business, which is crucial for developing society as a whole. Several universities offer online courses in entrepreneurship that aspirants can complete at their preferred pace.