Will your company get investor interest and, more importantly, will it prosper?
Too many companies I see pitching for investment pitch a product or a technology, not a company. Fixing the product pitch is a relatively easy task in comparison to fixing the business pitch, mainly because most businesses don’t have a strategy or even a plan. Sorry, “build it and they will come” doesn’t count.
Test your company against this list to see if you are investment ready:
- A product that we understand – the problem and the solution – no matter how complex the science is behind your company, it must have a simple explanationof the problem you solve for customers and the value you give your customers and end users.
- Validated market demand for the product – if it’s a new venture what third party proof do you have (eg. market research, etc) that people will buy your product at a price, you can make money from it. If it’s in the market already, excite us about your sales growth story.
- A trend driving increased demand – creating the “perfect storm” – what is going on in your target market that says this demand will continue and ideally increase?
- A sustainable competitive advantage –how are you going to defend yourself against the competition when it wakes up?
- Clear, quantified metrics as to how the business makes money – how well defined is you business – finance model? Can you model your sales process (eg. x dollars spent on Google ad words = y dollars sales)? At least understand the financial model and your capacity constraints.
- A clear and easily communicated business plan/strategy – including go-to market – a clear and concisestrategy and plan is a long way towards achieving greatness. Give us confidence you have a tangible way to reach customers and meet demand.
- An experienced team – Nothing happens without a committed and well-equipped team. What relevant experience does your team have? Remember always employ people smarter than you.
- Clear return for investor – is your valuation set at a point where the investor can actually make a return? Remember no exit plan = no investment.
- Fun people working on cool stuff – fun and cool mean different things to different people – but like pornography it is obvious when it is, or isn’t.
I consistently see in the New Zealand market place, time and time again, businesses get caught up with the product, technology or science and are wasting their efforts because they failed to stop and look at the bigger picture of a full go-to market plan and strategy.
Debbie Humphrey and I have launched a new investment ready programme called Business Dominoes to help business owners both recognise this strategy gap and fill it. All of our clients from the first intake are raving about the transformation their business stimulated from this programme. Debbie and I believe you are expert at driving your company, you just need a hand as to where to drive to and who you should take with you.
Mark Robotham's Blog 