In my prior post, Share Information Or Don't Bother Calling, I described the reasons why there is limited downside in sharing ideas with investors. There are also, however, some significant benefits.

The most obvious benefit is the feedback that VCs can provide. By seeing many of the startups in the marketplace, VCs generally develop a wealth of knowledge that can be helpful to entrepreneurs. This can take many forms. VCs can:

• Leverage best practices that they have seen to offer you advice about how to execute (e.g., sales, marketing, development strategies).
• Suggest partnerships or services that might enhance your business model, enabling you to take advantage of budding technologies.
• Recommend other startups or mature companies with which you might want to partner in order to fill gaps in your operation or product offering.
• Identify key challenges in your model based upon what they know about the nature of your market or based upon pitfalls that they have seen other companies encounter.
• Introduce you to potential employees, partners, service providers and even other investors.
• Provide feedback from an investor standpoint, enabling you to enhance your pitch.
• Offer new ideas that may compliment your business model.

The other benefit of sharing your idea with VCs, and sharing it early, comes from your ability to demonstrate a trend and engage in pre-marketing.