Posts Tagged ‘Early Stage Company’

My investor colleagues are not going to be happy about this post, but in the in the spirit of integrity I feel I must share.

First though, if you’re thinking about seeking funding to start a new business venture, expand your existing business or buy an existing business or franchise, STOP! I mean stop THINKING about it and start acting on it, we’re in the best “seller’s” market we’ve ever been in and likely to ever see again. In the same way we won’t see another Dot Com boom of the late nineties and early 2000s, or the housing market boom in 2007, we’re not going to see the current market again! So, don’t wait around, go for the money, but, there are some caveats you need to be aware of that I will share.

Before we talk about the caveats let me explain why we’re in this once in a life time market. Essentially we have a perfect storm largely driven by low interest rates. Yes, low interest rates make borrowing cheap, but that’s not the main driver. The driver, or drivers, are that leaving money in the bank to collect 0.25% interest is such a waste that making investment risks makes sense. Dry powder is at a historic high, i.e., $2.3 trillion sitting in banks itching to be invested; acquisition / startup inventory is low and there’s a growing feeling of being left behind. So it’s a “sellers” market.

You might be asking why the title includes “Time Sensitive”. Two words, Baby Boomers. They’re retiring at a rate of 300,000 a month and a lot of them own businesses they need to sell. Baby Boomers didn’t have the number of offspring their parents had, so a lot don’t have kids to hand their business down to, which will lead to a glut. Also, as the market picks up steam in 2016, the Feds will start to increase interest rates and so investors will be less incline to make high risk investments, choosing to leave it in more secure locations. So it will become a buyers’ market.

There’s a very reliable adage, ‘markets change in an instance and never come back.’ So take advantage of what we have, especially as it’s better to have multiple offers on the table than one that can disappear in the blink of an eye.

To get to that caveat I mentioned earlier, there is a huge amount of money waiting and needing to be invested, but its smart money. Yes, investors do still tend to follow the heard (which is very frustrating for cutting edge startups), but the biggest problem is that deals are being passed over due to poor / unclear proposals. That’s the real caveat.

By far the most common complaint I hear from investors and commercial loan officers is that opportunities that look interesting are not clearly illustrating their potential and that it isn’t clear that the founder has thought through the business enough. Plus these people don’t want to spend days reading 30+ page business plans; they don’t trust them; they’re full of template copy and if they don’t like the business they’ve wasted a lot of time. Slide decks (PowerPoint presentations) are better, but they don’t follow a uniform structure either and can be 40 slides long thus eliminating the reason for using a deck.

This has recently been resolved with a free business planning tool called By offering a focused consistent structure that can be completed in a fraction of the time, the new business is presented as if written by a veteran entrepreneur. What I mean by this is that you can spot the founder that’s been working on her business for the past 2 years because she’s fine-tuned her pitch by learning what the investor wants to know and presenting it in 7 to 10 slides.

What’s interesting is you can always spot the novice and the seasoned pro pitch simply by listening to the questions posed by investors after the presentation. That is to say, when you hear questions like “How big is the market?”, “What is your revenue stream?”, “Who is your target market?”, “What pain are you solving?”, “What is the barrier to entry?”, etc., you know it was a novice who just pitched, because the pitch should have include this information. Whereas, if the line of questioning is more like “What would you spend the money on tomorrow?”, “When will the MVP be released”, “Would you like an introduction to ABC?”, “If you received more money than you are asking, how much more would that accelerate your business?”, etc., you know the pitch was delivered by a seasoned entrepreneur because the pitch addressed the basic questions the investor is thinking of. So in 10 hours or less leapfrogs the entrepreneur to that 2 year seasoned veteran state by ensuring they give the investor what they want out of the gate.

So, if you’re seeking funding to start a new business venture, expand your existing business or buy an existing business or franchise, then register with, create a plan and reach out to the money now…you could be in funding negotiations within the week!

Investors typically don't read them. Founders never refer to them. Startups don't follow them…so why do people still think you need to write the 30+ page narrative plan?

We've blogged many times about the fact that there's no question a business plan is a necessity and that the real question is "Who is the audience and what do they want to know?". But recently we had an experience where the approach may have saved a startup.

This is what happened…one of the companies we're coaching recently had a major, if not a company closing experience. The company had scheduled a seminar for their customers, which was a milestone for them and extremely important for the company. But 10 days before the event not one person had signed up, so when we met for our coaching session the meeting's tone was one of should we bother continuing, perhaps it's time to close this clambake?

I asked what had been done to promote the event and I reviewed some of the marketing copy that had been used which seemed ok. But I proposed we compare it to The Story, Customer Segment and Unique Value Proposition cells in their Bizignite plan to make sure the marketing copy correctly represented the company's business plan.

BINGO! We immediately saw that the marketing copy did not reflect the plan at all! It was targeting the wrong audience, contained the wrong message and omitted the benefits! In just seconds their Bizignite plan had shown the team what the problem was!

Now that's what a business plan should do!! 

One could argue that your 30+ page plan could do the same thing, but lets be realistic here. First, where is the latest version of the plan located? Can it be accessed in a few seconds and can we all view the same information at the same time? Maybe it's a shared document somewhere, but my experience is that after a few weeks the team forgets where this document is. Second, how long would it take to review the 30 pages before you find what you're looking for. Again, my experience is the team doesn't want to return to the document to scan it. They typically believe it was something they should have for the investor and don't see it as a useful tool to keep them on track.

The project is now back on track and that team and I are very grateful to KENOVA to building Bizignite.