The value of an advisor

Lets face it, if finding capital for your venture was easy, then there would be no such thing as corporate advisers out there selling you the value of advice.

As I sat with another prospect today, who incidentally became a client at the end of the meeting, seeing what I see time and time again, I thought I would make a record of it formally and talk to you about it.

Lets assume that there is limited capital out there.

Lets also assume that not every capital provider is excited by your sector, you or your style – so matter how exciting this opportunity is to you or another person, there are just some investors who are not interested.

Lets also assume that some investors who might be interested, are busy on something else at the time you are looking, or are fully invested, or are overseas – just not contactable.

The long and short of it, as your pool of investors shrinks the more we think about it, it is no wonder that it is considered a difficult to find venture capital.

SO – if you pitch up to a potential investors office, or send them an email with a poorly laid out information memorandum, business plan, or your numbers don’t add up, or even if you under sold, god forbid, your idea or business as an investment, you will have reduced your chances of getting this investor on board, and your overall pool by 1. Who knows, they could have been the one. When you are dealing with such a scarce resource WHY would you take the chance.

Here’s the crux of it. If you have a great business, a great idea and you want to position yourself for a win every time, then you need to test out your idea, test our how you are presenting it, how it is likely to be perceived, what an investor will think about it, how they will react …. All BEFORE you actually communicate to one!

Someone said to me don’t pitch your services on your blog – people will run a mile – so I won’t then. I will do this for free. With this client above, I spoke with him for an hour on the phone, read through his IM and business plan, and gave feedback over several emails over the course of 2 days, and then had 2 hours in a meeting discussing what needed to be done to position his offer more effectively, …… all for free.

You cant lose!

The value of an advisor in your capital raising process is a post from: Venture Capital Centre. Click Here To Download Our Free E-Book Explaining Exactly How To Create A Business Plan That Investors Will Read

Pitching to a VC is all about YOU. An investor is investing in you, as much as your idea and business concept.

Thinking startup? David S. Rose’s rapid-fire TED U talk on pitching to a venture capitalist tells you the 10 things you need to know about yourself — and prove to a VC — before you fire up your slideshow.

David Rose is a serial investor and a serial entrepreneur. Here’s his list of what is important in convincing an investor that you are the right choice.

It’s about
* Integrity
* Passion
* Knowledge
* Skills
* Leadership
* Commitment
* Coachable

And of course, it needs to be presented with an infectious enthusiasm!

On presentation techniques, and powerpoint, David says:

“Without question I’ve seen many presentations (both with and without PowerPoint) that are Too Slick, and to me they are at least as much of a turnoff (perhaps even more) than is one that is Too Rough. HOWEVER, that’s not the only choice one has. The slickness is *not* just a function of the slides; it has much more to do with how over-rehearsed, or patronizing, or ‘un-real’ the presenter is. I see hundreds (perhaps even thousands) of presentations each year, including many dozens at conferences like TED, where presentation is often elevated to a high art. And while great presentations are far from common…they do happen.

There’s a wonderful word, first used by Castiglione in 1528, that nails the concept. “Sprezzatura” is “a certain nonchalance, so as to conceal all art and make whatever one does or says appear to be without effort and almost without any thought about it.” That is to say, it is the ability of the courtier to display “an easy facility in accomplishing difficult actions which hides the conscious effort that went into them.”

If you watch the very best presenters at their very best, people like Larry Lessig and Rives and Steve Jobs and Seth Godin et al, there is absolutely NO feeling that they are Too Slick. But all of these guys spend absolutely enormous amounts of time preparing their slides, rehearsing their presentations and mastering the technology…so that the result comes off as “without effort…and thought”. ”

David S. Rose on pitching to Venture Capitalists is a post from: Venture Capital Centre. Click Here To Download Our Free E-Book Explaining Exactly How To Create A Business Plan That Investors Will Read

You hear the terms ‘Small Business’ and ‘SME’ (small and medium size enterprise) all the time. In some contexts they refer to very small business – a husband and wife team, or a sole business operator. Others would refer to these businesses as micro-businesses. There’s significant differences between what people think they are, and what investors label these companies. If there is confusion, it is compounded by the fact that everyone wants to look bigger than they are, so a business that has grown to a few million dollars in revenue will feel compelled to begin calling itself a medium size business.

There’s also international variations in these terms. In Australia “small business” seems to mean owner operated companies up to thirty or fifty staff. Beyond that, they start to call themselves a medium size company. In the US by contrast, anything less than about $100m in turnover is considered small, and our Australian version of small would be considered “microbusiness” or a cottage industry. The factors seem to be related to size and ownership, but are non definitive.

By way of example, in “Small Giants” by Bo Burlingham http://www.smallgiantsbook.com/ there is a “small” brewing company used as an example which has a turnover of a few hundred million dollars. This is probably small compared to the brewing giants, but it is still a significant company. (In this context it was labelled small because of its structure and because it was still run by its founder).

There are similar confusions over what businesses call themselves at various stages of development. For example… “Startup” for some implies a concept of a company – similar to the companies that popped up overnight in the dotcom boom with almost no plans, just a domain name and a few people with a desire to sell petfood over the internet. For others, “startup” might mean a five year old company that has a reasonable trading history, but has a new strategy that requires funding to get new momentum.

Investment terms are also used somewhat freely, and without a lot of accuracy – private equity, venture capital, angel investment. Sometimes these terms are clear cut and sometimes a deal might come together that is somewhere in the middle. What one person calls venture capital finance another will call private equity. Even investments vary. Even within a given investment, the cash might be contributed as equity or as debt. Or it might start out as debt but be converted to equity. The overarching terms of venture capital and private equity fit all these scenarios.

The lesson from all this is: definitions are less important than actual business plans and people, and actual dollars. What IS important is how you convey your opportunity to a prospective investor with clarity on your market, the opportunity you have, what you want from them, and what they get out of it. The actual terms used are less important than the deal itself.

“Small Business” and other confusing terms is a post from: Venture Capital Centre. Click Here To Download Our Free E-Book Explaining Exactly How To Create A Business Plan That Investors Will Read