One of the most important things you can have as a budding entrepreneur is to develop a cash flow before going to any venture capitalists. This will demonstrate to these gentlemen that you are serious about your business. Even more important a cash flow gives you more control over your company. With a cash flow you will not have to give the venture capitalists as much of your company as you would otherwise. Your cash flow doesn't necessarily have to address the business you are ultimately going into. All it has to do is demonstrate that you are capable of making money.

Venture capitalists are a really peculiar variety of birds. If you give them the slightest impression that you need them they will take flight like a flock of buzzards. Without this impression they flock around you like a flock of buzzards come to pick your bones. Or, to put this way they are like sharks, but taller of fin, and longer of tooth.

Another variety of rare birds is investment bankers a particular kind of venture capitalist. Generally speaking these people come onto the scene after you have started your business, and have been in business for a few years. At that point you are established, and want to take your company public. They will do this for you, but in the process they will also take an arm and a leg. The kitchen sink they'll take too if it isn't nailed down.

Run-of-the-mill bankers in the startup phase of going into business for the greater part are just about unresponsive. These people like to put themselves forward as business experts. In truth they are dangerous to your health, and should be avoided until your company has been around forever.

The most valuable thing you can have at the startup of a business is a positive cash flow.

Learn more about this author, John Carter.
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