Here's the second installment of The 15 Step Process of Raising Venture Capital. Tomorrow I'll share Steps 9 and 10 (The Term Sheet and The Attorney Review). These steps are generalized and may be different based on industry, company progress, or investment firm.

6. The Valuation Discussion: After the first meeting, if the partner remains interested, they may attempt to feel you out for the target valuation you are seeking. They also may choose not to discuss valuation and simply make an offer with the term sheet. If you are in a position of strength, you may wish to discuss valuation upfront yourself so you don’t waste time. Be prepared with revenue multiples from both public companies that are similar to yours and private comparables. Depending on many factors (team, technology, industry stage, revenue growth, market size) one can expect to be able to raise funds at 2x to 10x your revenues from the trailing twelve months or 1x to 5x your projected revenues from the next twelve months. If you don’t have any revenues yet, the valuation will be whatever you can negotiate with an investor and based upon your experience and any intellectual property you have. At the end of the day, the market valuation for your company is what an investor is willing to pay—and as such it is important to have multiple firms competing to invest in your firm if possible. Depending on the stage of your company, you may be able to raise funds at a 30% to 60% discount off the public market trailing or forward revenue comparables.

7. The Partner Presentation: Present to If you can come to general valuation range that you are both comfortable with, the partner may invite you to present in person or via videoconference to their full partner team. Prepare well and give a knock-out presentation. Invest in a graphic designer to make your presentation look nice and go heavy on actual examples of customer use and light on complex slides. I have seen a short flash product demo video or customer video interview within the presentation work well. Don’t let any slide have more than five bullet points or fifty words. Your presentation is likely to be between 15 and 60 minutes.

8. The Initial Due Diligence: After the presentation to the full partner team, if the partners like the deal, they may ask for some additional due diligence items such as your full financials and want to speak with other members of your team and some of your customers.