Venture capitalist Robin Klein recently blogged that:

Funding business plans from first time entrepreneurs just won’t happen anymore!

and went on to suggest that to get funding from a venture capital fund entrepreneurs are going to have to:

1. Be founded by 2nd and 3rd time tech entrepreneurs
2. Aspiring to build global businesses with scale
3. With genuinely original ideas which are game changing or a significant advance on current state of play
4. Where the founder(s) have built prototypes or are already demonstrating momentum in customer/consumer adoption
5. Where founders have shown an ability to considerably ‘bootstrap’ the business with very little or no external cash (outside of friends and family).

To be honest I’ve never understood why any VC would fund a new entrepreneur with nothing but an idea, at least not since 1998. It’s not that I think first time entrepreneurs don’t deserve funding, it’s just that it’s a huge risk and I certainly wouldn’t fund any idea until I’d seen an attempt to prove it is viable.

When questioned about the ability for first time entrepreneurs to raise any finance, in the comments Klein adds (my emphasis in bold):

My point was that just funding a ‘business plan’ ie a powerpoint plan with a 3 year blue-sky financial model won’t happen.

Of course, first time entrepreneurs who bootstrap and build something, demonstrate consumer or trade engagement are always going to be of great interest.

That last sentence really sums it all up, venture capital is still available if you have a good business opportunity or idea and you can demonstrate that it’s a good idea, because you’ve gone out there and given it a go. It holds true for Business Angel funding too.

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