Getting the Investor checkbook open.
In my travels (both real-world and virtual) I frequently hear “How do I get funding for my start-up?” Of course, some of it depends on the type of industry and your business model, but here are some fundamental sanity check points for you.
1. Before doing anything else - do a quick self-examination for hubris. Just because you think you’ve got a world-shaking idea doesn’t mean others will agree - at least not initially.
2. Don’t get too hung up on protecting your IP. If they can’t tell what “it” is - they’re not going to listen to you long enough to talk about dollars. Also, NDAs are nice little pieces of paper but if the other party really wants to steal your idea, they just will - particularly if they’ve got more money and lawyers than you.
3. Your pitch has to be free of insider or tech jargon. Remember, your audience doesn’t have to “get it.” But, they do need to understand it (and quickly). If people don’t “get it” in the first few minutes, you’ll likely be doing the investor road show a very long time before the first check gets written (if it ever does.)
4. Talk about how you plan on selling “it” (whatever “it” is) and address the bottom line mentality of your audience.
5. If you’re pitching to VCs and angels, keep in mind they’re looking to make money and they don’t need or want to wade through (or listen to you read) all 57 pages of patent documentation.
6. If you’re going to banks, be prepared to answer hard, sometimes embarrassing questions about your finances. (”So, why did you bounce that check to Pizza Hut in 1985?”) Sure, it’s personal but after all, they’re taking a chance on you.
7. Regardless of the funding source, have a business plan to show them - with quality content and formatting. You’d be surprised how many business plans I’ve seen that looked as if a child did them - different fonts, typos, messy cut and paste copies. Looks do set the tone. If your document is sloppy, people will likely infer your thinking is sloppy as well. And, remember it’s quality not quantity (you don’t get paid by the pound) so edit, edit, then edit some more.
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January 4th, 2006 at 9:21 am
2006 resolutions, plus year-end musings, and wrap-ups, Part 2
Here are more year-end/year-beginning wrap-ups of various sorts from Corante Network contributors (click here for Part 1): John Moore at Brand Autopsy posts links to his Top Twenty-Five of Ohh-Five Brand Autopsy posts. Mary Schmidt at Mary’s Blog link…
January 6th, 2006 at 12:23 am
Ah, you are so right. If you are new to this game spend the money on a software package like Business Plan Pro. It really disciplines you to look at all the issues. And before your road show, try to get the inside scoop on your potential investors. Regardless of what they say on their web site, certains topics are top of their mind. Match up what you have, with their current interest and you will have a winner.