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With the high potential that my newly developed seed company has to grow into a multi-billion dollar corporation, starting from the ground up already possessing an outlook worth $20M how can we attract and obtain a substantial capital enough to ensure the support of our company's growth and exposure? We are not looking for ventures more like investors willing to take on a directorial position. How can we show investors that we are sitting on a gold mine idea that will create substantial returns within 6 months of operation? We are willing to work with partners as we have room for two board members willing to invest. We have pitched and have marketed our business plan, but to no avail. It seems as if private investors are becoming more likely than searching for partners or ventures. Please explain how we can attract investors to at least hear what we are pursuing and how it would be in an investors best interest to invest in our company because of our high probability rate of success. We have no competition and no one has ever attempted what we are offering.
I don’t mean to make fun, but Im going to use this as an example. (Don’t worry, I left your name out :) --- I hear this every day. We are sitting on a goldmine! We will be the next Google! A Multi-Billion dollar idea! Our company will be worth $20M by the end of the year! We have no competition! Why aren’t investors jumping all over my big idea?
Now, its great for entrepreneurs to be excited about their company, but lets be realistic.
1 - multi-billion dollar corporation
I appreciate you aiming high, but aim a little lower. Multi-billion dollar ideas are a dime a dozen (pun intended!) Everyone is a multi-billion dollar hopeful, but when you say that to an investor, he thinks you are full of crap. I can think of very few companies (and I see a lot of em) that will ever be a multi-billion dollar corp. A couple of hundred million dollar corps, but very few multi-billion dollar ones.
2 - already possessing an outlook worth $20MM
Again - crap. What the hell does that mean? If you have revenues of $20M that’s a different story, and you should state it very clearly: “2004 revenues were $20M. Q1 2005 we are already at $9M and at the current rate will exceed $40 by the end of the year.” But please don’t throw a big number in there with absolutely nothing backing it up and expect an investor to be impressed.
3 - We have no competition
At our Seattle event last week one of the Investors put it very well. He said: “I don’t care if you invented a Cold Fusion reactor - your competition is the Sun”. If you say “We have no competition”, it only means that you haven’t done your homework.
4 - high probability rate of success
Thats optimistic - even if it is a great idea. Another Investor at our Texas conference put it very well. “If you want to see some of the best ideas, look at the path of failed companies”. Do you know why Investors invest in more than one company? One will be a home run - making them a lot of money, a few will be pretty good - making them a few bucks, and the rest will fail.
Investors appreciate you being excited, but realistic. Remember, they are not just investing in your company, but YOU and your ability to pull off your big idea. So I guess my one piece of advice to you (and others like this) is move your decimal point a few spaces to the left. Sorry to be a @*%&! but better to hear it from me now than in your meeting with a potential investor.
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