“Courting Venture Capital”

CourtingFor anyone in the market to raise venture capital there’s a good primer in the June, 2011 issue of the Journal of Accountancy, “Courting Venture Capital”, by J. D. Kern.

Two key elements are face-to-face and the elevator pitch that captures their interest quickly NOT with the numbers, rather market demand and why you exist.

Get quickly to the:

  1. market you are in
  2. demand / problem you solve
  3. size of the opportunity.

Make it personal, compelling and memorable. They will remember you, for your story that is supported by the numbers not the other way around. Captivated by the story, convinced with the numbers as Kern mentions.

Kern identifies and I agree, the 7 most important elements of your presentation are:

1.  Overview

 Make yourself “likeable” and “memorable” as you address the 3 points mentioned above.

2.  Management Team

 First they buy into the idea, then they evaluate the team. Sell yourselves. If the capital you are looking to raise is for expansion, focus upon past successes and why capital is holding you back. If you’re a start-up, sell your past successes, quantifiable results, awards … like there’s no tomorrow.

3.  Why you exist

 The problem or unfulfilled demand you solve and how you do it.

4.  Competition and barriers to success

This one’s a little trickier. You’ll need to demonstrate you’ve done your homework. Share with them the barriers AND then convince them why they are NOT barriers.

5.  Achievements to date

 Expand the confidence you’ve established in yourselves, the management team but now focus on measurable company achievements to date. If you’re a start-up sell the idea, sell the dream. Keep in mind Google, Facebook et al started here as well and not so long ago.

 6.  Road map for the future

 How you’ll get there by focusing on sales, marketing, production and distribution cycles.

7.  Financials

Convince them with the numbers” keep them realistic, have low/high contingency plan in your back pocket, allude to the upside.

If you’re in the market I encourage you to read Kern’s article.

If you need help, please give me a call.

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