Q. I would like to get venture capital funding for my new start-up, but how do I go about getting it?

A.The first thing you should do is research. Most venture capital (VC) firms focus their funding in a particular area. Start by looking for VC firms that specialise in your area. Once you know who to target, the next thing to do is to make a credible business plan. This should be in the form of a document that you can send along with your applications for funding. If your business plan is simply an idea stored in your head then you have lots of work to do. Here are the key things to include in a good business plan: 1) make sure you have a succinct outline of your business. Do not ramble, as this will make it look like you don’t know what you are getting in to. 2) add a couple of paragraphs about you, why you can succeed in this business and what expertise you have to make this work. 3) show you know your customer base and describe your market in detail. 4) finally, make sure you include projected revenue streams.

The more detail the better as this will help VC firms when they come to making their decision about which firms to back. More information for entrepreneurs trying to finance their start-up can be found on the Department for Business, Innovation and Skills website: http://www.berr.gov.uk/

Q. What do venture capitalists look for when deciding whether or not to back an entrepreneur?

A.Patrick Reeve is a managing partner at Albion Ventures, a venture capital trust manager. Reeve says that he looks for entrepreneurs who have experience, a simple product and a well-established market. “By and large with start-ups, if you don’t have an established market you have to finance the product yourself or with support from friends and family,” he says. For a financial business, says Reeve, experience is essential, as is having a client base from the word go.

Age is also a factor to help secure funding. Reeve says that anyone too young is going to find it hard to get the attention of VC managers: “If someone in their early 20s came to me with an idea, I would probably tell them to go and do something else for a while.” VC is a high-risk business and funds don’t just take leaps of faith when they meet an entrepreneur with a business idea. “Making an (investment) error can mean you lose everything. That’s why I like to get as much information about an entrepreneur’s past as I can, if that’s not there then it’s easier to make a mistake,” he says.

Q. What should I do if I get refused VC funding?

A.Reeve’s advice is to ask for feedback and make sure you listen to it: “People can block their ears when they start hearing things they don’t like, especially entrepreneurs who tend to be fairly self-absorbed.”

But Reeve says that it’s worth trying again once the business is up and running and generating revenue.

Don’t give up hope – it can actually be easier to secure funding during an economic downturn: “The attraction of the current environment is that there is less hype about a business’s prospects. In a recession you know that current levels of trading are going to be low, so it’s easier to predict performance.”