Finding a venture capital firm can be a taxing job. Imagine having to go through the profiles of these firms to determine if your proposed company fits their investment criteria, and then having to send your proposal to each of them. This will definitely consume your time and energy, as well as financial resources, without guarantee of favorable results. This explains the need for venture capital consultants.

What exactly do these consultants do? Basically their function is to find a venture capital firm to fund a start-up company. But before this, he must know the kind of business that you want to put up. In this way, he will immediately know which firms to contact once you’ve given him your proposal.

This is done by reading the business proposal. You may have written the proposal yourself, or he may draft the proposal for you, for a certain fee. It is advised though that prior to contacting a consultant, your business plan must already be finished.

Aside from the added expense, it is important that you know beforehand what you really want so that the consultant can have something to work on. On the other hand, if the consultant makes the proposal for you, then you are assured that the proposal is attractive, brief, and complete, increasing the chances for it to be approved.

During this stage, he must take the time to know what you want. He must continue to ask questions not only about financing options but also with other aspects such as the system of management and exit planning. A good consultant is someone knowledgeable of the different investment criteria as well as management styles and policies of these venture capital firms.

Next, he must know the exact type of venture capital firm that you want to work with. You may want to work with a firm, an angel investor, or an investment banker. He must also be able to give suggestions as to which type of firm would best suit the company or business that you wish to put up.

Some online consultancy firms provide all the necessary help that you will need. They can provide you with checklists, reports, and sample business proposals. More importantly, they will help you in your funding application by posting them on their website.

The downside of hiring a consultant is, obviously, the cost. Consultancy firms can charge up to $2,500 for mere consultancy services. Aside from this, there may be other fees that they will charge such as retainer fees and other direct expenses. Some of these companies charge between $250-350 an hour.

Be wary of consultants who tend to give you sweet, enticing words. Chances are, they’re all hype and can’t deliver. Unfortunately, because of the increase in the popularity of venture capital financing, many of them have abounded. So take extra care in choosing your consultant. Do some investigation. Instead of choosing to freelance consultants, maybe you can choose one who is employed by a legitimate consultancy firm.

A good venture capital consultant saves your time, money, and energy. Choose the best one that you can find. You can find some through the internet or by word of mouth.

Some entrepreneurs can give you names of consultants or consultancy firms that offer this type of service.