Are You Ready for Venture Capital Investment?

Is your company ready for a VC investment? Perhaps you have already been through a round of angel funding, have locked in your first customers, have some key members of the management team onboard and begun to see your business grow.

As the founder of your company you already know what other pieces of the successful business puzzle are needed before your business is ready for the significant growth that it should and could achieve. Part of that equation may be securing a financial backer that will be with you for the long haul…if that’s the case, it might be time to consider venture capital investment. 

What Are VC’s Looking For?
The obvious answer is ‘well that depends on the VC’…this is true, to a degree.  We probably met 25 different VC firms and they all seemed, at least initially, to want very different things.  But after a time, a pattern seemed to emerge…they all seemed to be interested in nearly the same things but the weightings they placed on each differed.

What were they? 

i) The Team
The strength of the team was almost everything!  Even the best business model with customers clambering for the product can still fail if the wrong team is at the helm. Likewise, the right team can take a mediocre business and make it shine. 
ii)  The Opportunity
How big could this business be?  Will it be a $10M or a $100M business in five years?  How defensible is it?  Who are the Competitors?  Who are the potential customers?
VCs are trying to determine – Risk VS. Reward.  VCs need to deliver a return on their investor’s money…as a certain number of companies fail, they need a 3 or 5 or 6 X of their original investment.  The actual number obviously depends on a number of factors.
iii)  The Differentiator/Uniqueness:
Why is this business different? What does it have that other companies do not?  What will make customer buy from this company? 
iv)  Exit Strategy:
How can we (as VCs) realize our investment? Read – How can we get our multiple back? Will this company be acquired? Can it be a candidate for an IPO? Or will it bumble along for many years make a steady but unexciting profit?  Guess which ones the VCs will invest in…

After working through the above, part of the equation for success is to be ready to take a VC through the business opportunity that your company represents as impactfully and as compelling a presentation as possible.  Sometimes even the best businesses fail to get funding or even interest from the first few VC meetings because they are not ready to present…perhaps they have not refined the message enough, or realistically thought through the real world challenges of the business…or perhaps that just don’t present well.

When we went through the VC process, we made sure we met with the VCs we were less enthusiastic about first…we almost considered them practice before the big date with the VCs we wanted.  This helped us refine our thinking, messaging and presentations skills.

Another route to consider is getting together with an Advisor that can prepare you for those critical meetings that could means a million dollars or more being invested in your business.  Considering how critical this cash could be to the success of your startup, your employees and you, that would be really worth considering…

 If you are interested in connecting with an Advisor that can improve your chances of locking in that big money…consider reaching out to:

Advisory Pitch Advisor
“You never get a second chance to make a first impression” applies to pitching investors and your “slide deck” is not your presentation, you are. Before approaching your most likely investors prepare, focus, practice, polish, your pitch so that your passion comes through credibly and confidently. You wouldn’t give them a draft of your business plan, don’t give them a draft of your presentation either.

Role Offered: Ongoing
Service: Fundraising
Industry: Technology
Experience: 15-20 years
Remuneration Sought: TBD

An Associated Press award-winning broadcaster and Certified Management Consultant by The Institute of Management Consultants, since 1992 Tom has been a communications coach/consultant to senior executives in presentation, public speaking and media skills. He has more than 20 years of on-air media experience and over 16 years’ strategic-communications consulting experience with entrepreneurs to officers and senior executives of international companies including IBM, Roche, MIT, Millipore, Bosch, and others. His clients successfully develop and deliver focused, effective, and memorable messages, internally and externally, including effective use of the Web, print, and broadcast media. He delivers regular presentations at the Harvard School of Public Health, Institute of Management Consultants, Society of Professional Consultants and numerous national and international organizations.

tom@kennedygroupboston.com

Interested? Click here to reach out to this advisor…

If you are considering raising a significant amount of cash for your early stage company, being ready for Venture Capital meetings will take time and if there is one piece of advice we were given that really helped throughout “Make sure you seem in demand and do not appear desperate or needy” – meeting with VCs is almost like a first date…confidence and excitement are critical for success.

Good luck!

Andrew
http://www.AdvisorGarage.com

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One comment

  1. Pingback: Pitching #2 « Executive Summary

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