Show Me The Money

09/28/2004

What do you do if you're an entrepreneur with a dream but lack capital? Find an investor to help bank roll your idea. Easier said than done! Last week Donna Lynes-Miller, president of GourmentStation, invited me to attend the Tennessee Valley Venture Forum (TVVF) with her. Interesting look at a world where deals are made and dreams can either soar or crash and burn.

TVVF is a trade show (sponsored by Technology 2020 and the city of Chattanooga) that puts selected companies (the exhibitors) in contact with prospective investors (the attendees). The business owners also have an opportunity to present their "babies" front and center to the money people - in a 12-minute sales pitch. Talk about a stressful moment in the sun.

A panel of venture capital experts concurred that we're coming out of a flat period and deals are beginning to flow. If you're an entrepreneur who is thinking of going the investment route, here are a few tips from Chris Kyriopoulous, general partner of FCA Venture Partners III, L.P. (Clayton Associates), on what the VCs are looking for in a portfolio company. Chris, thanks for your slides.

Critical Investment Factors
1. Management Team - Bet on the jockey. "We'd rather back an A team with a B plan."
2. CEO "Passion Meter" - Has the CEO invested in herself?
3. Clear Exit Strategy
4. Concept - Is it valid, unique and proprietary?
5. Cohesive Business Plan - Must get it in 15-minutes or less
6. Proven Revenue Model - Does it work?
7. Size of the Market and Growth Characteristics
8. Time to Market
9. Do We (the investment firm) Know The Business - There's a strong comfort level in doing deals in repeat industries.
10. Key Strategic Relationships - Investors, vendors, portfolio. Are they a "fit" for any of companies in the investment firm's portfolio?

Tips on Raising Equity for Entrepreneurs
1. Do your homework!
2. Maintain a focus on your business
3. "Pitch" to firms who know your business (industry) See #9 Critical Investment Factors
4. Find the lead investor first
5. Be flexible: be willing to give up equity

Key takeaways: Passion-Vision-Truth-Communication-Persistence

Read More
-Innovations Publishing
-re:invention - check the left nav bar
-SBA
-National Venture Capital Association

Trackbacks

Trackback url:
http://www.typepad.com/services/trackback/6a00d83451b4b169e200d8353dde3069e2

Comments

Post a comment