Friday, January 8, 2010

A plea to the money


Business plans can be presented in a presentation deck containing ten slides. On each of the slides the text size must be no smaller than 30pt.; You should be able to present the story in no more than 20 minutes. Even if you're pitching yourself or your company to invest its own funds, boil your ideas down and touch the bases. Slide Headers:

  1. The problem that exists
  2. The solution to the problem
  3. Business model; i.e. a brief description of the type of firm you will operate
  4. Underlying magic/technology; this is crucial. Basically, it explains how you will solve the problem. It illustrates your competitive advantage.
  5. Marketing and sales; how you will make people aware of your product/service, and sell it.
  6. Competition; anyone who claims that there is no competition for a business idea has not done their homework.
  7. Team; who—if anyone—will be working with you.
  8. Projections and milestones; what are the key goals that you plan on hitting.
  9. Status and timeline; where you currently are with your venture, and how long until you start hitting those goals.
  10. Summary and call to action; if this is a presentation to investors (if it's your own money, think of it as making the case to the money), here’s where you describe how much you need and when.
Don't make a mistake by getting facts wrong or telling a lie. This is not a time to be sloppy or deceptive - no no no. The money is smart and will check the details. Your credibility is the first thing to get sniffed. Be credible by being accurate and truthful. Acknowledge threats and weaknesses. Crush them with your strengths and opportunities but don't assume the money is not paying close attention to everything - it is.

Don't kid yourself. Your money (or investor's money) is valuable. A piddly return is a yawn and a "no". There has to be a significant upside opportunity. Let's say that if - over a 5-year period - you can't make the case for a 20% annual return (or better), you're in deep doodoo. Smart money knows that the odds that everything will go as you've planned are close to zero. That doesn't mean you haven't prepared well and that you can't win. Perhaps you'll find good fortune along the way and the unknown will be your (and the money's) friend. On the other hand, shit happens and you may go down in flames in spite of your rigorous planing. The money is aware of the possibility that it may get lost. The chances that it may go poof are calculated into the deal. As a result, an upside expectation of a huge return - even many times the original investment - doesn't mean the money is greedy, just as the possibility of losing all the money doesn't make the money stupid. The money will only get excited (read: willing) if you can describe a big win.

2 comments:

Anonymous said...

Doctor,

Nice

That's why you are the Doctor!

willson said...

Interesting… I might try some of this on my blog, too. It’s quite interesting how you sometimes stop being innovative and just go for an accepted solution without actually trying to improve it… you make a couple of good points.

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