The first step in attracting investors to participate in your technology venture is to provide an attractive business plan. Marketing goals should focus on product development, customer profiles and realistic market penetration objectives. Finance goals should establish realistic budgets and a return on investment using an economic model that can be validated. A completed product and demonstrated ability to market is critical. Your investor will want to know in some detail how you plan to spend the investment.

The second step in attracting a suitable investor is to structure the transaction to respond to the interests of the technology enterprise. The suitable investor brings more than cash to the transaction. A party that offers enhanced vertical or horizontal product integration will often bring new strengths to your marketing plan and serve as an important strategic ally. An equally important ally is the party that expands a weak distribution network, or one that brings an existing base of customers. In this context, the suitable investor is one that offers a shared product or marketing vision, which compliments or expands your own.

Stock ownership and investor participation is typically part of the arrangement. In negotiating the release of equity in your firm you will want to carefully consider certain key issues, particularly if you are releasing a majority interest. Stock redemption rights could be critical to the future of the firm. Re-examine the quorum and voting requirements of your by-laws. Carefully assess the viability of your stock buy-sell arrangements. Examine your technology exposure if complications in the relationship arise. Negotiate to minimize loss of control over your products and customers. In this context, the suitable investor is one that offers a shared product or marketing vision which compliments or expands your own.

Finally, consider the investor proposal in the context of your other alternatives. Unless the investor brings marketing or technology synergy to the enterprise, the financial benefits may be short lived. Hesitate to grant strong operational and equity participation solely in exchange for short-term capital infusion.