Getting in front of financing partners
Even as a boutique advisory and investment firm, Morgan Investments is getting requests from at least 3 start-ups per week. Combined with all the work we have going on with our current partners, this doesn’t leave enough time to fully evaluate all our new opportunities. As I work with entrepreneurs, I often find them missing on a few fairly simple things that make it very easy for me to let them fall off of my radar (and therefore save time for the companies that don’t miss on these).
Here are a few simple and straightforward suggestions to help you get – and stay – in front of financing partners.
1. Always do what you say, when you say you will do it
When you promise to deliver tomorrow a pro forma that explains channel marketing verses direct sales expenses, make sure you send it tomorrow and make sure it successfully explains the specific question of channel verses direct. Far too often, entrepreneurs miss deadlines. That is an easy one, but endlessly frustrating and a very bad indicator for investors.
Further, even when time expectations are met the materials shared often don’t successfully answer the concerns discussed. Your may have to evolve your standard materials in order to satisfy your different targets. I suggest doing a quick outline of what your potential investor wants to know, and then read through your materials and check off each question that they specifically address. Don’t send that document until you check off 100% of the issues.
2. Make sure to cover your business bases
Most start-ups need to continue to build out a team, and financing helps the ability to do this. Entrepreneurs should present a plan, though, to discuss how current and future management talent will successfully lead at least the 4 major disciplines: Sales/Marketing, Finance, Operations and Technology. Don’t be afraid to highlight weaknesses as long as you display an understanding about what and how you will turn them into strengths. If you can present a current team that has experience and success in all 4, then you have a big head start on success… as a business and to secure capital.
3. Work after hours – or at least make it seem like you do
Most private finance (Angel, VC and PE) professionals have extensive entrepreneurial experience of their own. We have been in your shoes. We’ve made mistakes and we’ve had successes. And we have worked all hours of the day, night and weekend for our companies. If you are an entrepreneur on the fundraising trail, be available to take a meeting and provide answers, 24/7. Let your potential investors know you are willing to work all hours and do anything to make your company successful (and to protect their future investment).
There certainly is a lot more to building a business and to impressing investors than the above three points. If you don’t take care of these relatively easy and straightforward things, though, you may never get the chance to show off the real value of your start-up.