If you are trying to raise investment funds for your start-up or early-stage business, one of the best opportunities you could hope to have is an in-person meeting with angel investors or venture capitalists. Do it right, and you both could be winners.

Preparation, Preparation, Preparation

My experience dealing with entrepreneurs in need of capital is that the biggest mistake I see them make is poor planning. This can lead to an incomplete or inaccurate business plan, presentation of your plan to the wrong audience, or unrealistic expectations by the entrepreneur. A executive summary of the business plan will grab the interest of a potential investor. A business plan that is put together at the last minute in hopes of grabbing funds that are needed immediately will surely be turned down without a second thought by your potential investors.

Know Your Audience

The amount of money you need makes a huge difference as where you should be looking. Mark Smock, President of Business Buyer Directory, LLC. in Scottsdale AZ, suggests that the entrepreneur understand the levels of funding required and also change your presentation to match.   Friends and family may be good sources for $50,000 and will require less sophistication, but if your needs are more like $250,000, then angel investors may be where you should look. For larger 7 figure amounts, you will need venture capitalists. These investors may have geographic or industry specific restrictions, so research their guidelines ahead of time to make sure your business fits within their requirements.

You would also be advised against sending your full business plan to them. Just send the executive summary.   David Cowan of Bessemer Venture Partners says "Nothing slows down a VC as much as a comprehensive business plan." They just don't have time to look at all the plans they receive.

Address Their Concerns

To convince investors to fund your business, you'll need to know what the investors want and address their chief concerns. Dave Miller, President of Strategic Transitions Inc., believes that the most important issue to be addressed is your sustainable competitive advantage. Investors will want to know, not only your target market, but the problem you are trying to solve for them. How will you compete with your competitors? How will your product stand up to the competition in the long run?

One additional major concern for investors is the exit strategy. Most angel investors or venture capitalists will want to see at least a 10x return on their investment in 3 to 5 years. You need to address how this will happen. The normal way to accomplish this is either through an Initial Public Offering (IPO) or through a sale of your company. If you can identify who might be interested in buying your company 3 to 5 years from now, you will have an achievable exit strategy for your investors.

Dave Miller reminds entrepreneurs that when you are approaching potential investors, you are selling your company, not your product.
 
 

Not sure if you are ready or not for angels with checkbooks?  Contact Performance Advisors LLC and let us help you get ready

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Benchmarking is one of those great business buzzwords. But it's a buzzword for good reason. A "hot" management technique that survived the boom of the 1990's, it is the best way to uncover performance gaps in an organization. By comparing your business to similar businesses in your industry, you can easily assess the health of your business. 

When you benchmark against competitors it helps you and your managers remained focused on your markets and takes the guesswork out of competitive analysis. It also provides a yardstick for improving competitiveness, because it helps you compare your business with your competition to see how your profitability can be improved by taking very specific measures.

 However, most businesses are uncertain how to obtain the information they need to benchmark. In a recent article on Entrepreneur.com entitled "How to Tell if Your Business is Healthy...or Floundering," author Carol Tice shared four methods for gathering benchmarking data: 

1. Ask other business owners.  

2. Use industry directories.  

3. Ask an industry association.  

4. Buy or find market research.  

Now there is a 5th way: Performance Advisors LLC will provide your industry Key Performance Indicators to you free of charge.  Just send us an email and tell us your industry, and we will send your Industry Key Performance Indicators back to you free of charge.

Performance Advisors LLC is in the business of seeing businesses like yours succeed. If you're still worried about compiling a complete and informative benchmark for your business, allow Performance Advisors LLC to do it for you. How does it work? From several of your company's key business metrics, we will run a full analysis of the financial health of your organization. This includes a follow-up counseling session with one of our profitability coaches to help get your business on the fast track to increased profitability.

Click here to view a sample business assessment performed by Performance Advisors LLC

 You owe it to your business to get a complete financial picture of how your business compares to others in the industry. Add to the detailed analysis provided in your business analysis an hour of business consulting, and you have an amazingly great value. Call Performance Advisors LLC at 1-888-629-0605 or 1-602-579-5725 to order your business assessment today! It's time to assess your business's health; it may not be what the doctor ordered, but it sure will give your business a longer, more vibrant life.