Angels With Checkbooks
If you are trying to raise investment funds for your start-up or early-stage business, one of the best opportunities you could hope to have is an in-person meeting with angel investors or venture capitalists.
Do it right, and you both could be winners.
Preparation, Preparation, Preparation My experience dealing with entrepreneurs in need of capital is that the biggest mistake I see them make is poor planning.
This can lead to an incomplete or inaccurate business plan, presentation of your plan to the wrong audience, or unrealistic expectations by the entrepreneur.
An executive summary of the business plan will grab the interest of a potential investor.
A business plan that is put together at the last minute in hopes of grabbing funds that are needed immediately will surely be turned down without a second thought by your potential investors.
Know Your Audience The amount of money you need makes a huge difference as where you should be looking.
Mark Smock, President of Business Buyer Directory, LLC.
of Scottsdale AZ, suggests that the entrepreneur understand the levels of funding required and also change your presentation to match.
Friends and family may be good sources for $50,000 and will require less sophistication, but if your needs are more like $250,000, then angel investors may be where you should look.
For larger 7 figure amounts, you will need venture capitalists.
These investors may have geographic or industry specific restrictions, so research their guidelines ahead of time to make sure your business fits within their requirements.
You would also be advised against sending your full business plan to them.
Just send the executive summary.
David Cowan of Bessemer Venture Partners says "Nothing slows down a VC as much as a comprehensive business plan.
" They just don't have time to look at all the plans they receive.
Address Their Concerns To convince investors to fund your business, you'll need to know what the investors want and address their chief concerns.
Dave Miller, President of Strategic Transitions Inc.
in Scottsdale Arizona, believes that the most important issue to be addressed is your sustainable competitive advantage.
Investors will want to know, not only your target market, but the problem you are trying to solve for them.
How will you compete with your competitors? How will your product stand up to the competition in the long run? One additional major concern for investors is the exit strategy.
Most angel investors or venture capitalists will want to see at least a 10x return on their investment in 3 to 5 years.
You need to address how this will happen.
The normal way to accomplish this is either through an Initial Public Offering (IPO) or through a sale of your company.
If you can identify who might be interested in buying your company 3 to 5 years from now, you will have an achievable exit strategy for your investors.
Dave Miller reminds entrepreneurs that when you are approaching potential investors, you are selling your company, not your product.
Not sure if you are ready or not for angels with checkbooks? Contact Terry Peltz at Performance Advisors LLC directly and let Performance Advisors LLC help you get ready.
Do it right, and you both could be winners.
Preparation, Preparation, Preparation My experience dealing with entrepreneurs in need of capital is that the biggest mistake I see them make is poor planning.
This can lead to an incomplete or inaccurate business plan, presentation of your plan to the wrong audience, or unrealistic expectations by the entrepreneur.
An executive summary of the business plan will grab the interest of a potential investor.
A business plan that is put together at the last minute in hopes of grabbing funds that are needed immediately will surely be turned down without a second thought by your potential investors.
Know Your Audience The amount of money you need makes a huge difference as where you should be looking.
Mark Smock, President of Business Buyer Directory, LLC.
of Scottsdale AZ, suggests that the entrepreneur understand the levels of funding required and also change your presentation to match.
Friends and family may be good sources for $50,000 and will require less sophistication, but if your needs are more like $250,000, then angel investors may be where you should look.
For larger 7 figure amounts, you will need venture capitalists.
These investors may have geographic or industry specific restrictions, so research their guidelines ahead of time to make sure your business fits within their requirements.
You would also be advised against sending your full business plan to them.
Just send the executive summary.
David Cowan of Bessemer Venture Partners says "Nothing slows down a VC as much as a comprehensive business plan.
" They just don't have time to look at all the plans they receive.
Address Their Concerns To convince investors to fund your business, you'll need to know what the investors want and address their chief concerns.
Dave Miller, President of Strategic Transitions Inc.
in Scottsdale Arizona, believes that the most important issue to be addressed is your sustainable competitive advantage.
Investors will want to know, not only your target market, but the problem you are trying to solve for them.
How will you compete with your competitors? How will your product stand up to the competition in the long run? One additional major concern for investors is the exit strategy.
Most angel investors or venture capitalists will want to see at least a 10x return on their investment in 3 to 5 years.
You need to address how this will happen.
The normal way to accomplish this is either through an Initial Public Offering (IPO) or through a sale of your company.
If you can identify who might be interested in buying your company 3 to 5 years from now, you will have an achievable exit strategy for your investors.
Dave Miller reminds entrepreneurs that when you are approaching potential investors, you are selling your company, not your product.
Not sure if you are ready or not for angels with checkbooks? Contact Terry Peltz at Performance Advisors LLC directly and let Performance Advisors LLC help you get ready.