5 Tips for Millennials Hoping to Raise Venture CapitalVC firms are more selective than ever in allocating money. How should you approach fundraising?

The daily news of startups raising multi-million-dollar funding is enough to suggest it's almost easy to raise venture capital. Unfortunately for most entrepreneurs, nothing could be further from the truth — VC firms are more selective than ever in allocating their money.

So how do you, as a millennial entrepreneur, successfully secure VC funding for your business?

1. Make sure you and your startup are ready for VC

Venture capital is for companies with high potential to reach broad markets or monopolize a niche that need a considerable amount of capital to make their business plans a reality. Before considering trying for VC, ensure that your startup meets these criteria in a demonstrable, marketable way. Otherwise, you could spend years of your time and thousands of dollars in resources only to find VC firms aren't interested. If you're looking to raise less than $1 million, finding an angel investor or taking a loan out could be the easier, better way to go.

Keep in mind your own aspirations as an entrepreneur, too. Assuming you are successful in securing VC funding, you'll need to answer to a board — one with the power to relieve you of the CEO position, in the worst case scenario.

Lastly, take your aspirations for the future of your company into account. After receiving equity capital from a VC firm, your company will most likely be sold or made public within a decade at a maximum to enable the firm to make enough of a profit on their initial investment. Only go after venture capital if you're sure you'll be prepared to part with your company a few years down the road.

2. Target the right VC firms

To increase your chances of securing an investment and achieving compatibility between your startup and the firm's standards, target the right VC firms from the get-go. For instance, if you're looking for around $1 to $2 million, try seeking funds from small firms, which colloquially known as micro-VCs.

Use the individual, unique aspects of your business to generate the interest of specific firms. There are VC firms focused specifically on investing in millennial entrepreneurs. Some firms take their focus a step further – for instance, SoGal Ventures invests solely in starups led by millennial & gen Z women and minorities.

3. Build your network and get a "warm" introduction

In today's tech-drive world, it's easy to overlook the importance of face-to-face contact, charisma and personal approachability. To increase your chances of meeting the right people to invest in your business, you'll need to build a broad network of useful connections that will eventually lead to the key introductions you're after.

Though cold-calling – or cold-emailing, more likely – VC firms is not entirely doomed to failure, you'll make a much better impression if your introduction to the firm happens more organically, or at least appears to. As CEO, a recommendation from a few reputable individuals and a direct introduction will make you appear more driven, personable and influential. So go back to basics: Network as much as possible and make the useful connections you'll need to reach VC firms directly.

4. Make sure you're a good match

Should you accept the first VC offer and consider yourself lucky, or should you hold out for a firm that fully shares your startup's culture and values?

This, of course, is up to you to decide. A distinct, well-defined company culture is one of the defining characteristics of millennial startups, and it might be important to you that the VC firm investing in you shares your approach. Keep in mind that VC firms provide more than financial capital. Strategic assistance, market guidance and introductions are also among the potential benefits. And as I've already mentioned, the firm providing your equity capital will gain a degree of control over your business through the board.

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We can't all be experts at everything. In fact, in today's markets, millennial startup owners are encouraged to focus on highly specific areas of expertise. Securing venture capital is a highly nuanced process that includes a binding legal agreements that will require the attention of an expert. Your best bet is to enlist the services of a lawyer experienced in working with VC firms to help you navigate the legal aspects of the deal.

The process of raising equity capital from VC firms is a complex, lengthy one and is not necessarily the best way forward for every business. With careful research, planning and preparation, however, you can increase your chances of securing the capital you need to expand your business and achieve your goals.