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Twelve common mistakes to avoid when presenting to investors
Chia-Li Chien | Nov. 16, 2010
I recently had the opportunity to be a mentor, deal screener and speaker for the 4th annual Angle Capital Summit. Although there were specific things to look for as a deal screener on behalf of the investors, I couldn’t help but to reflect on an article I recently wrote about G.U.P, as well as some of the material in my book Show Me The Money.
Many of the applicants at the Summit looking for funding had very little training in how to prepare a presentation for investors. Most had some type of business plan to start with, but some did not even have an executive summary. If you’re serious about your business, you must be prepared.
So what does an investor look for? Although I acted as a deal screener, I don’t necessarily have any interest in investing in a company I work with, but I do certainly have an interest in seeing that company succeed. As I’ve worked with clients over the years, there are many things we purposely put in place. Owners have to create a win-win situation for themselves and investors. You, as the owner, as well as the investors, are taking a risk on your ideas.
Here are twelve common mistakes to avoid as you prepare your investor presentation:
1. Having no clear business model. Only one out of ten deals I reviewed had a solid business model. There are three components of a business model: 1) Owner’s passion and business purpose; ideally equaling what the customer is willing to pay you. 2) Core competency of key processes and key resources. 3) Economic engine or profit formula, which includes a plan for diversifying revenue sources.
2. Not the right time to introduce your idea to the market. Some ideas I saw at the Summit were frankly out of date. If you want to introduce an old idea, make sure to innovate or create a mash-up compelling enough to repackage the idea for presentation.
3. Not the right place to introduce your idea to the market. Did you do enough market research to present your case? How credible is your source of market research?
4. Not having the right team of people to implement your idea. Most companies I reviewed are weak on implementation, meaning they were short on resources to implement their ideas. Resources include vendors, and most likely a team of other professionals. Identify them properly.
5. Not planning to work in and run the business. I’ve seen, over the years, that some people just want the title without the work of the start-up. Well, that’s a good strategy for an exit plan, but at least at the beginning, you must be an integral part of your business, which will help you in the future to know how to react quickly to market changes.
6. Entering without 10,000 hours of industry experience. Most of the deals I explored at the Summit were from people who did not have actual industry experience. According to research reported in Malcolm Gladwell’s “Outliers,” you need about 10,000 hours of experience in the industry of your business idea. If you personally don’t have it, have someone on your team who does.
7. Not willing to put your own money into this business. Instead, you only seek ways to use other people’s money. You must invest some of your own “skins” in the game. You can’t expect only to use other people’s hard earned money.
8. Having no specific go-to-market plan and not considering pull marketing strategy. I consistently see this as a huge problem in investor/business deals. Most people talk about their plan, but fail to be specific on how they will take their products or services into the market. I have seen very few businesses looking for an investor who talk about pull marketing strategy. Both your investors and you need to know how are you going to introduce your products or services into your market.
Not everything has to be perfect in order to find funding, but nevertheless, put your best effort forward to show you are serious about making your business idea work. No one will know you are serious about succeeding until you have a complete plan. The amount of work, research, and thought you put into an entire business plan will speak louder than just a one page executive summary.
Chia-Li Chien, CFP®, CRPC, PMP; helps women entrepreneurs to convert their business into meaningful personal wealth. She is the author of Show Me The Money and columnist for WomenEntrepreneur.com & Fox Business online. She is available for consulting, speaking engagements and workshops. She can be reached at http://www.chialichien.com or firstname.lastname@example.org.
Financial independence means different things to everyone
During my 2nd quarter SRI Business Retreat meeting recently, I talked with forty-six business owners about history. I used as an example the fine economists who also play the role of historian by reporting our economic situation on a monthly basis. They do a great job of telling us what is going on in the economy. For example, the Federal Reserve System provides a great deal of historical data about our overall economy. You can even download local data from your Federal Reserve branch. My branch is the Federal Reserve Bank of Richmond, which covers North Carolina.
Why do you need to know about economic reports? Because these economic reports typically talk about the unemployment rates, interest rates and consumer spending that will have an impact on your business both now and in the future. Your response to the data in the reports means you play an intricate part in the overall economy. According to a recent article, 6 Things Missing From the Recovery from U.S. News & World Report, L.P., small businesses account for 65% of new jobs created in our economy. So yes, we all play a key role in the overall economy. But yet, the U.S. unemployment rate was 9.9 % in April 2010. The Wall Street Journal Economic Forecasting Survey of May 2010 predicts that unemployment will be down to 9.7% in June 2010.
Our world is changing, and changing fast. Perhaps your big business (Fortune 500 or Global 1000) is not creating new domestic jobs up to pace compared to the past. You may see outsourcing come and go without being really certain which direction your business is going. But there is one thing for certain –not all of us will live forever. And not all of you will work in the corporate world forever, either.
Financial independence means different things to different people. But answer this question for me, ”What’s next for you?” As a mother, daughter, wife, daughter-in-law, business owner, boss, vendor, advisor, etc., my life reflects how we all have different roles to play. I did not find my true passion until I got very sick while working in a Fortune 500 company as Director of IT, with a $5 million overhead budget plus an average $10 million project budget annually. It was a wakeup call for me of sorts, when I became so sick that I slept seven days straight. I also thought I was paralyzed from my right shoulder up to my head. I awakened to realize that I had really never listened to my own voice. I knew something had to change, but I wasn’t sure what that was.
After two years in various different treatments, I finally went through comprehensive financial planning and happily came to the conclusion that I could afford to take a different journey. So I did. I resumed, or restarted, my consulting business in late 2003 and today, I love what I do! I am passionate about enabling women business owners to increase their business in value so they can enjoy financial independence. I am on a mission to innovate, to reposition and to capture value growth for women in business.
Take a look at other examples of those who followed their passions:
- Judge Shirley Fulton, is a recently retired Superior Court Judge from Mecklenburg County, NC. She is the owner of The Wadsworth House, a meeting place for corporate, civic and social events, and she co-founded Charlotte Law School (the first for-profit law school in Charlotte).
- Cathy Maday, was in a corporate role as a Project Manager. Today, she is the owner of Wingspan Coaching, which provides management and executive coaching services for Fortune 500 firms. She and her team were recently featured on The Learning Channel (TLC).
- Patricia Golden, was a Marketing Executive. Today, she is the owner of a ten-year-old company called My Team of Experts, Inc., a premier public relations company that helps small businesses.
Perhaps your path is different when it comes to financial independence. But no matter what you choose to do, whether owning/running a business or a civic/non-profit organization, or something else entirely, what you do will depend on what your passion/purpose is calling you to fulfill.
Consider the following:
- Find your passion/purpose and listen to the universe. No one can tell you what to do; only you can. The answer is already here if you listen carefully. Most importantly, you already hold the key to success in whatever you desire to do.
- Seek a career coach for advice. Reference my previously published article, Secrets of a Successful Exit, in which I identify ten variables to consider. The first six variables can help you decide if you want to start a business.
- Carefully analyze your situation and seek financial planning advice. But remember, your goal is not to get an approval from your CFP for retirement. The goal is to test the waters to see if you are financially ready take on a huge investment and risk such as owning a business.
The truth is that no one can predict what will happen in the future – especially in the uncertain economic environment of today. But wouldn’t you prefer to be part of the statistical history that shows an upswing, or making history brighter now for a brighter future? Begin now to visualize your future, and you’ll be the one writing your own history.
Chia-Li Chien, CFP®, CRPC, PMP; helps women entrepreneurs to convert their business into meaningful personal wealth. She is the author of Show Me The Money and columnist for WomenEntrepreneur.com & Fox Business online. She is available for consulting, speaking engagements and workshops. She can be reached at www.chialichien.com or email@example.com.
February 5, 2010
2010 Canadian Wide Winner Small Business Credit Challenge – Solution – Microfinancing
Lana Larder of Halifax, Nova Scotia, Canada is inspired by the success of micro financing success stories around the world. Larder has developed a microfinancing plan for Halifax, Nova Scotia, Canada. Larder is dedicated to microfinancing to meet Halifax, Nova Scotia’s business needs and the current gaps improving business opportunities for marginalized individuals and/or businesses in Halifax, Nova Scotia.
Microfinancing is an alternative solution for entrepreneurs. It is usually targeted towards women because they typically have a harder time to access credit. Microfinancing can provide financing, credit building and business training and usually supports disadvantaged groups or individuals that seek capital for business start-ups and/or working capital for growth.
Microfinancing is predicted on the belief that access to affordable capital can play a critical role in unleashing the entrepreneurial capacity of individuals and/or business owners that can not access capital. Thereby raising each borrower’s standard of living and bettering the community.
There is a tremendous need for microfinancing services. In fact, two thirds of the world’s population are not serviced by big financial institutions.
Microfinancing is typically for individuals and/or businesses that have no credit score and/or suffer from poor credit, effectively shutting them out of the mainstream financial system. As a result, the disadvantaged rely on fringe and predatory financial services.
In Halifax, a poverty rate of approximately 18.1 % (concentrated among women, children and minorities) and 30,000 children living in poverty force families to seek additional streams of revenue by opening a businesses.
Microfinancing services will enable disadvantaged groups or individuals to 1) start and/or expand businesses through affordable loans, 2) access services such as business and financial literacy training, 3) build credit history through successful loan repayments. Currently there are few places for entrepreneurs to turn to for financing and even less now with the recent worldwide credit crisis.
Microfinancing services typically partner with government, non-profits and community partners so when clients apply to access microfinancing there is a good sense of the borrower’s character before a loan application is even filled out. Finally, the partners offer services that clients require to succeed.
Microfinancing offers affordable, flexible loans. Through research, focus groups and conversations with individuals and businesses there is a strong demand for these type of loans.
The recent economic downturn and financial crisis have underscored the need for access to affordable capital. Microfinancing serves a critical need for communities,and creates a paradigm shift in thinking about the importance of access to equitable financial services.
Microfinancing provides opportunities for economically marginalized individuals and companies creating pathways out of poverty to economic self-reliance. Microfinancing is an economic and social change agent. The benefits of these investments lead to long term and community wide benefits creating a healthier and progressive city, province or Country..
Short term investment for large, long-term savings….