Archive for September, 2013

Management is KEY to any investment.

A “C+” project with “A+” leadership is often viewed as a less risky investment than an “A+” project with “C+” leadership.

Be prepared to answer these type of questions:
Who is the management team?
What is the experience of each person on the team within the industry?
What is each person’s success with projects/companies at this stage?
What key positions are empty and what are the plans to fill those positions?

Keep in mind that it is critical to carefully consider the team you are building to fill in the key management skills that are lacking. Friends and family may not be a fit.

Leadership experience matters!

Of key importance to Angel Investors and Venture Capital firms is the size of the opportunity your organization/invention/service offers. An organization that is disruptive to an industry may be viewed as one with a greater opportunity potential. Of course, the disruptive technology/service will need to be proven before meeting with early stage investors. But keep the following questions at the forefront when considering the opportunity your organization can offer an investor:

How established is the market you are targeting?
In dollars, how big is the opportunity for your organization?
How fast is your industry growing?
Realistically, is your organization capable of being one of the top three players in the market?

Critical documents will consist of proof of concept and financial computations that support the claims you make with regard to the opportunity your organization presents.

When seeking funding from Angel Investors or Venture Capital Groups, there are questions you must be prepared to answer on the spot. Keep in mind that some of these questions may be included in your business plan but others may not.

What problem are you solving?
How does your product/service solve this problem?
How much money are you seeking and what are you going to use it for?
Where do you believe the company will be in 5 years?
What is the benefit to us if we invest in you?

Next we will look at specific areas and other questions investors may pose.

Venture Capital (VCs) sources evaluate a number of factors with regard to investing in a start-up. Three of the most important factors are: Founders Experience, Market Readiness, and Potential Return. If any of these factors are lacking, it becomes increasingly difficult to raise capital through a VC. VCs expect to have the ability to review a well-executed business plan that addresses these factors. available domain names

Additionally, cold-calling on VCs is usually a non-starter. It is far better to have a referral or other social connection with a VC.

Other sources that may be considered if you are not ready for the world of VC investors are: crowd-funding and personal sources such as friends and family.

Came across this anonymous quote which is worth sharing:
Entrepreneurship is living a few years of your life like most people won’t so you can spend the rest of your life like most people can’t.

Says is all!!