Ben contacted me to get advice on raising equity capital. Ben is very, very passionate about this business, and he certainly convinced me that the technology was in the 'hot and sexy' category
Here's how the conversation went...Me: "Great Ben, you've got me excited about this technology, now tell me a little about your test run. What did your customers have to say? Did they find it easy to use? What did they think of the price?"
Ben: "Yep, they loved it."
Me: "Hmm... can you give me a bit more detail? What exactly did they like?"
Ben: "What do you mean? Don't you think this technology will be a winner?"
Then Ben proceeded to tell me again how good the technology really was. He seemed to think that I was not convinced and if I just understood how it worked then I'd be sold. He pulled out his computer to give me a demo. That was the last straw for me.
Okay, I needed to go back to the start. I spent about 10 minutes talking about how investors make decisions and what exactly they look for when making investments in early stage companies.
But to no avail. My comments just went straight over his head.
Listen to Your Advisers
The 'thing' that Ben did not get is that you need to LISTEN to those you seek advice from.
You get very close to your technology/idea and it's hard to understand why others don't share your passion and enthusiasm for it's potential. The reaction is to keep hammering home how great the technology is. But that doesn't work.
Ben was right to ask for advice but the trouble was that he didn't listen. He had his own ideas about how to convince an investor and that was that.
By the way, Ben wasn't being stubborn. He genuinely did not see that he ignored just about everything I said about how to approach investors. He literally had a mental block.
Before you even go anywhere near an investor talk to people who have 'been there, done that', and listen to what they say to you.
Common Ground
I know that every situation is different but, believe me, there is much more common ground in this environment than most entrepreneurs think. It is a real trap to put yourself out there as 'unique' and the normal rules don't apply. Too many entrepreneurs have had to 'get a real job' with that attitude.
I'm not suggesting that all the advisers will be right for your particular situation. At the end of the day the only test is to give it a go. Having said that, you'd be foolish not to listen to other entrepreneurs and advisers who have been around for a lot longer than you.
They may not be cool but they have a lot of war wounds and maybe they can save you from a few as well.
Gail Geronimos, is the founder of Achaeus, which helps entrepreneurs develop their businesses and she has just started a new site http://pitchingtoinvestors.com/ with tools and tips about how to develop killer presentations to raise capital.
To read more Gail Geronimos blogs, click here.
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written by terrysme, August 03, 2009
If consultants could highlight what 'viability' means is a good start to entrepreneurs because many have no real idea about this. You can have a good product, a good market and perfect timing, and even a good presentation and achieve nothing unless one is perceived to have true commercial viability. And you can't bluff this with enthusiasm.
Viability is the soundest reasoning to be constructed in the process and end presentation of a potential venture. Viability covers all angles including the investor's needs, the consumer's perspective, the management capability, and the business plan. Entrepreneurs must seet it from all angles not just one's own - then they are on the track to becoming viable, and that's what gets the money in the end (providing you can get exposure to the right type of investors, and that's another story).
written by steve sherlock, August 04, 2009
i have a mentor who has raised a lot of capital and built a large online company.
im constantly distracted by what could be and he helps me to keep to blue sky in mind, but act on what needs to be done now.
so from 10 things i had on last agenda, he helped me narrow to two priorities that need to be focused on.
A powerpoint pitch document is irrelevant if you don't even get a seat at the table. Focus on the benefits your technology will give your customers and things should happen for you albeit slowly.