4. Completing your business plan and executive summary:
If you haven’t already completed your business plan, then you must. If you have completed it you need to review it and make sure it is complete, accurate, and supportable. Potential investors or advisors will immediately start asking you questions and if you don’t have the answers on the tip of your tongue you are sunk. The act of writing your business plan will force you to address every issue and to know the answer to the questions that WILL come up. This book will not address your business plan. My book "How To Prepare and Present a Successful Business Funding Request" is available for free at BusinessFinance.com. "Don’t present without it".
5. Wasting your time sending your complete business plan to VCs:
Even if they ask for it they won’t read it. Instead send a two or three page executive summary with a summary of your financial projections attached. Then, when you call to follow up, use the presentation of your full business plan as the need for a personal meeting. It is extremely important for you to get in front of your potential advisors before you approach investors. I strongly suggest you practice your pitch on potential advisors first as that will allow you to perfect your pitch and bring to mind questions you hadn’t thought of. It will also give you the opportunity to get experienced feedback on your plan and your presentation.
6. Having your references ready:
Before anyone is going to be willing to jump into business with you they are going to want to know who you are and what others think of you. Prepare a lists of business associates, partners, clients, vendors, employees, employers, accountants, lawyers, etc. who know you and respect you. Have this list typed and ready to hand out when you are asked. You would be amazed at how many entrepreneurs fail to have a simple reference list ready. What would you think of someone who couldn’t give you good references.
7. Making your first VC contact:
Get personal introductions. Your chance of success will increase 100X if you are personally introduced by someone that knows the person you are hoping to do business with.
Why do the graduates of Harvard have more money than those of any state university? ContactsNetworking! Do your homework, find and get to know people that can make the personal introduction to those who can help you.
Here is an example: You want to get to an introduction to a venture partner at XYZ Venture Fund. You see on their website that they funded a company in the communications infrastructure industry and your company has developed a new and unique bandwidth enhancer. You request and meet with the CIO of the firm that was funded. You ask to take him and the CEO out to lunch or dinner, you explain what your two companies can do together and you ask questions about how they got funded by XYZ Venture Fund. You establish personal relationships and you eventually get the introduction you need.
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