With billions of dollars funneled into food and beverage start-ups annually, your business may want to consider working with a beverage venture capitalist. There’s a lot to consider when first starting your beverage company. One of the most important factors in this process can often feel like the biggest shark in the water. Do you know how your company is going to receive funding?

While obtaining the proper funding might seem challenging, that’s where venture capitalists come into play. But what does this mean for your company? And how can you work with beverage venture capitalists?

Here are a few ways to better understand beverage venture capital to help your business succeed:

  • What is Venture Capital?

  • What do They Look For?

  • Working With Venture Capitalists

  • Brindiamo Group Helps Connect Companies With Investors

What is Venture Capital?

A venture capitalist is a private investor that distributes funds to new companies. They work to find startups they believe to have a high potential for growth. However, their initial investment is in exchange for equity in the company. This equity is essentially a piece of the company, meaning the more a venture capitalist invests, the larger percentage of the company they own. Providing the investor with equity gives them a direct stake in the success of the company.

A venture capitalist assumes a fair amount of risk by investing in new companies, as about 90% of startups typically fail. This risk is mitigated as much as possible by their selectivity, and it is rewarded with equity and the potential for large gains.

As a startup company, after producing your initial product, creating a brand, building a website, creating a marketing plan, and implementing these systems, how are you going to pay employees? As a company that hasn’t started gaining a sufficient income, you’re going to have to rely on these beverage venture capitalists to secure funding for your business.

Visit Brindiamo Group to learn more about securing investments!

What do They Look For?

Although singular people can be venture capitalists, it’s much more common for a group of people to form limited partnerships. Limited partnerships divide the responsibility for debt between them based on their initial investment. This helps mitigate individual risk for these investors.

These venture capital partnerships will often analyze the projected growth for your company, the amount of money needed to help you achieve this goal, and the potential returns from the equity to be acquired in the deal.

Therefore, venture capitalists are looking for a strong, capable, and knowledgeable management team. While they won’t be involved with managing your company or making day-to-day decisions, they’ll want to rest assured that the people in charge of your operations have the necessary skills and tools needed to succeed.

As a company seeking financing, you will have to put together a detailed plan of what your business needs to move forward, how much it will cost, and how it will be used. If the beverage venture capitalist thinks the benefits outweigh the risk, a deal will be made.

Working With Venture Capitalists

As a potential investor will want to see that a business shows great potential for growth and long-term success, you must make a strong case for your company. Ensure that you have a strong business plan before you ever initiate your beverage start-up. Your business plan can provide a detailed roadmap for potential investors of how you plan to move your company forward.

In order to get a beverage venture capitalist to even view your business plan, you’ll need to pitch your start-up. Be sure to put together a coherent, strong pitch. Outline your business, the potential for growth, and the resulting potential for investor rewards. Try to keep your pitch short as this is meant to entice investors and start the conversation. Don’t bog them down with the heavy details just yet.

Pro Tip: Be selective when searching for a beverage venture capitalist. These partnerships are largely initiated by personal taste and built on trust. Try to find someone that has worked with similar businesses.

Brindiamo Group Helps Connect Companies With Investors

The final consideration for finding a beverage venture capitalist is to approach these investors in an appropriate manner. While it can sometimes be a challenge to connect with venture capitalists, many of these partnership investors are specific about how they want to get in contact with businesses.

Brindiamo Group helps facilitate productive introductions between those starting a drink company and those looking to invest. Contact Brindiamo Group today!