Here is a quick overview of the basics (i.e. how to prepare for your first meeting) I learned while securing investors in the past. This is just the basics but you must have a solid foundation to build on.
- Who Are You? VC’s have short attention spans. Can you blame them? They are being targeted by a lot of people who want and need money to grow their business. To capture their attention you must define quickly, the problem you are solving with your product and/or service. If you cannot explain what you do in a few sentences you’re in trouble. Start with an elevator pitch. Make it simple and you can build it out from that point. Remember you are now in sales and you need to know how to sell.
- Know Your Numbers: You need to have financial projections but be honest. The investors know numbers and they will go on the attack or laugh you out of the room if you tell them you are going to be in the black at the end of year 1.
- Who Is Going To Buy Your Product or Service? You must know who you will be targeting. They want real facts and figures here. Investors want to know the revenue potential and will need a snapshot of the market. This is where everyone listens carefully … let’s be honest this is how you will make money and most importantly how they will maximize their return.
- Who Is Your Competition and How Are You Going To Beat Them. I love it when small business owners tell me that they have no competition. Come on! Let’s be honest … if no one else is selling it then you are either on the cutting edge or have a product no one wants. Now I understand that there may not be an apple to apples competitor but you will have competition. You must know who they are and what your advantage is so you can have a plan in place to increase capture market share.
- Introduce your team. You can’t do it all by yourself. Introduce your team and what they are brining to the table. Who you have on board may be the difference maker when the final decision is made.
- Cash Please! This is it … the time is now to ask so you can receive. It’s like Wayne Gretzky said “I never scored a goal on a shot I didn’t take”. Know how much you need, what you are going to use it for and what your exit strategy is. Remember they want their money back and want it back with a nice return.