Small business: Snagging investors in

Snagging investment dollars isn't easy these days. The downturn has made investors much more cautious and selective about the companies they invest in.

To raise capital in this market, entrepreneurs need to be much more sophisticated and savvy in their overall fundraising approach and have a better understanding of what investors are looking for, say experts.

"There's money available, but it's very hard to get," explains venture capitalist Bob Brill of Newlight Management in Jericho, which manages $150 million in investments. "Entrepreneurs have to really be on the top of their game." Doing that means avoiding some of the top investor turnoffs that could kill your fundraising chances:

Weak management team: Successful companies generally need three broad areas of management expertise: marketing/sales, research and development/technology, and operations, says Brill. These core areas usually aren't found in just one individual, so it helps to have a well-diversified team, he says.

Poor understanding of investor:With today's technology, it's easy enough to find out about a potential investor or venture fund. For instance, Newlight is strictly technology-focused. Do your homework so you don't waste investors' time, says Brill.

Wearing rose-colored glasses:Nothing turns off investors more than overly optimistic scenarios, says Mark Heesen, president of the National Venture Capital Association in Arlington, Va. Saying your company has no competition or that there are no obstacles or issues is just unrealistic.

Going it alone:Raising capital is challenging, notes Heesen. You need to network so you can meet other entrepreneurs and key players. Align yourself with good accountants and lawyers "who understand the entrepreneurial way of thinking," he suggests. It adds to your credibility.Being close-minded:Angels and other investors may have suggestions that can help your business, explains Michael Faltischek, chairman of the Long Island Angel Network (liangels.net), a forum where entrepreneurs interact with investors. Listen and be open to their advice, he notes, adding that the network's next presentation meeting is Tuesday in Melville.Unrealistic valuations:Often entrepreneurs will underestimate the amount of money they need to raise to bring their company to the next level, or they may overvalue the actual worth of their company, particularly in the early stages, says Faltischek, who is also an angel investor and senior partner at Ruskin Moscou Faltischek, a Uniondale law firm. "They need to develop more realistic expectations," he says.Unrealistic business plan:Entrepreneurs are known for being idealistic, but having unfounded or unsubstantiated financials and sales projections can be a deal killer. "The plan has to have guts, not glitter," says Jeffrey Bass, chairman of the Long Island Capital Alliance (licapital.org), which holds mini-forums where entrepreneurs can pitch investors (the next one is Oct. 8 in Melville).

No skin in the game:Entrepreneurs unwilling to put their own money into their business can't expect investors to do so, says Bass, chief executive of Executive Strategies Group Llc, a Great Neck strategic business advisor. Michael Casalini of Bridge Capital Solutions in Hauppauge, which this year snagged $4 million from a private Manhattan investment firm, understood this: Even before the latest round of financing, he invested $1 million into the commercial check-cashing business by combining his money with family and friends'. "If you can't get your friends and family to believe in you, you'll never get an investor to believe in you," he says.

Fast fact

Since the first quarter of 2010, four Long Island companies have received more than $12 million in venture capital funding, according to PricewaterhouseCoopers Llp and the National Venture Capital Association. Just one Long Island company received venture capital funding last year, totaling $7 million.

*Note: Data reflects only reported deals