Think your project is ready to change the world? Don’t let anyone stop you… But, if you need external investment dollars, consider beefing-up the following key areas:
Kill Pain
Your idea must kill pain. As mentioned in “The 36-Point Business Plan Analysis Guide,” it is fundamental to your funding-appeal. Your customers want solutions not band-aids to their problems. People pay close attention to how well something solves a need. It’s also important to note that the need can be real or perceived. Having only a slight advantage over your competition is boring from your customer’s point-of-view. On the other hand, if you obliterate their pain with your product, where the competition only medicates it, you will be the clear choice.
Industry, Industry, Industry
Investors are keen on what industries are “hot” and which ones are “cooling-off.” Your industry should also have the “Goldilocks” appeal -not too big and not too small. Investors like trends because it gives them options. And, options generally mean more profitability. For example, many green-energy sectors are becoming “hot,” as such investors are more likely to infuse capital into those industries because there are other venture capital and private equity firms to sell and co-invest with, thereby mitigating their overall risk. More investors equal more opportunities to get you fully funded.
The Inner Circle
Your executive team is hyper-critical to securing funding. The team will individually and collectively be scrutinized. Investors prefer teams that “argue effectively” with one another over ones that are comprised of peacekeepers that hesitate to acknowledge issues. Your management team sets the tone for the rest of your company and your success trajectory. Weak unseasoned leaders are likely to achieve similar results. At the end of the day, the bulk of your company’s success will be driven by your team. Make sure everyone pulls more than their own weight. You are, after all, trying to beat (not keep up) with your competition, right?
Business Collateral
In many cases, the first impression of your business to prospective venture capitalists will be given through your business plan. Your business plan is the snapshot-in-time of what you believe your company will do and what it has done already. It is the aggregation of key data, supporting arguments and market projections focused through your company’s overwhelming clarity of purpose. Many business plans are sub-par. And, an equal amount of plans are thrown in the recycle bin for the very same reason. Your business plan is your company’s spokesperson when you’re not in the room. Everything you’ve said can either be fortified or destroyed by this set of “seemingly harmless” company documents.
Strong and compelling business plans will get you funded. Conversely, weak and unfinished business plans will get you laughed out of a meeting. Do it right. It’s that important.
