There are lots of reasons a business might turn to outside investors for capital. This issue comes up most often with startups, but occasionally even with more established small business.

Investors might be friends and family, angel investors, or venture capitalists (VC). Startups tend to go with investors when they can, because it is sometimes difficult for them to receive business loans through traditional banking mechanisms.

While venture capital funding availability has decreased since the boom years in the late 1990s, if you have a solid product or idea you can still attract a VC investor. Before you embark on searching for VC investors, it is important to consider the nature of the investment, as in whether or not the VC firm becomes a part owner vs. a creditor, and whether they want long-term revenue or not, among other factors.

Most VCs are limited partnerships that have a fund of pooled investments. They vary in size from boutique firms that manage a few million dollars to VCs that have billions of dollars invested in companies worldwide. They usually take preferred stock in the company and want at least one seat on the board of directors. They sometimes want the CEO position if they believe that existing management needs bolstering.

Here are a few tips to help you attract VC investors:

Do Your Research First

Does a market exist for your idea? While you may think your product or idea is a stroke of genius, there may not be a market for it. VCs want commercial viability. If a market exists, can you manufacture the product or market the service cost-effectively?

How big is the market? The industry must be large enough to achieve a substantial return. This generally means a market that can generate $100 million in revenue by all competitors. Potential investors will want to see an assessment of the overall market over a five-year period and an overview of the competition.

Does it have a competitive advantage? Is the idea or product unique and is that uniqueness sustainable or can it be easily copied?

Approach a select few target angels or groups only one at a time, carefully

Be patient. Look first for introductions by checking with people you know who might know them, alumni relationships, business associations, their public speaking dates, and any contacts in the companies in which they’ve already invested.

Don’t be afraid to submit to groups using their website form or call their switchboards, but “cold call” as a last resort.

Your chances of receiving funding are significantly better if you fit their normal profile.

Have a business plan ready before you finish the summary or the pitch

The business plan is the screenplay; the pitch is the movie. Don’t do the plan too big or too formal because it’s not going to last and the plan should never be older than two to four weeks.

Don’t swallow the myth about investors not reading your plan. The truth at the core of that myth is that investors will reject your business without reading your plan—but they won’t invest in it without reading the plan. No business gets money without going through rigorous study and examination first (they call that “due diligence”), and the plan is the active document for the due diligence.