What is a venture capital scout?
A venture capital scout acts as a go-between between the fund and the individual. They work outside of the fund independently on their own.
What do they do?
Venture scouts are primarily about building and forming mutually beneficial relationships.
They identify promising startups at the early stage and pass on the deal to venture firms. Venture scouts act as a bridge to form a deal between the venture capital firm and business owner. They advocate and share information on the venture capital firm to the individual interested in funding.
Many companies are not aware that they need funding. They think they can apply for traditional finance or go the mainstream route. Often many do not realize they need help until a vc scout reaches out to them. However, some may be aware of their need for funding but lack the knowledge and resources to acquire funding.
This is where venture scouts step in. Often they will invest small check sizes ($25K — $50K) in very early-stage companies. They are the first initial investors in the start-up phase for business owners, which is critical for the success of the business.
Following this initial funding, the vc scout passes the business owner over to the venture capital firms, who can fund more significant amounts of money to help the business to expand and grow.
What are they known as?
How do they help?
Well, the vc scout’s role is to help. They connect the dots so to speak. The client or business owner requires finance, so they provide initial funding to get them on track. Then they link them with a venture capital firm which will provide them with greater amounts of funding ($50,000 and upwards).
The scout role is an important one because it acts as a go-between between the business owner and venture capital firm. Often top venture capital firms advertise their services and attract the client that way, and so they do not rely on word of mouth. That’s where the vc scout comes in, sharing the information with the client and getting them in contact…