Robert Ochtel’s Blog

An Experienced Approach to Venture Funding

Developing A Corporate “Vision” Will Help Your Start-up Company Pre- and Post-Funding

Most entrepreneurs start their companies without a company “vision”- an idea of what the overall purpose of their start-up company is trying to accomplish and how their product is going to benefit their customers and the market.  This lack of vision or purpose can be detrimental to your start-up company both during the pre- and post funding stages of development. As without a vision, your company can often falter due to an overall lack of focus and self-described identity in the market.  So it is important that while you are working to develop your start-up company and its technology, product or service offering that you should create an overall vision for your start-up company; focusing on the long term benefits your technology, product or services offering brings to both your customers and the market. This article outlines some of the pre- and post- funding benefits that result from an entrepreneur having an overall vision for their start-up company.

Henry Ford Had a Vision.

From the beginning, Henry Ford had a vision for his automobile company – “create a car that is affordable to the masses”.   This vision drove him to develop an automobile company that was primarily focused on reducing the costs associated with producing the automobile – the Ford Motor Company.  Although, from conception, Mr. Ford did not know how he was going to accomplish his vision for his company, he strongly believed that creating a car that was affordable to the masses would benefit his customers, the market and the U.S. economy.  This vision led to the development of production assembly line as it applied to the automobile industry, and although not originally his idea, the application of assembly line to the production of automobiles substantially changed the automobile industry – making it one of the most successful industries in history, and at the same time helping facilitate the change in the economic drivers of America from an agricultural based society to an industrial based society.  In addition, the US automobile industry was historically the primary reason for the rise in the middle class in the United States. Therefore, Henry Ford’s vision for the Ford Motor Company had a far reaching impact on the US economy and the American society in general.

 Do You Have a Vision for Your Start-up Company?

Most ultimately successful start-up companies begin with a disruptive technology, product or service offering that changes the basis of competition in the market.  This disruptive technology, product or service offering alone, does not necessarily ensure success in the market.  But, by researching the market, your competition and doing the appropriate amount of due diligence, you, as an entrepreneur, can acquire the appropriate knowledge to better understand that long term general trends in the market from both a macro-economic level and micro-economic levels. In addition, developing an understanding of the social market trends, and then determining how your start-up company’s technology, product or service offering can help drive and/or benefit society, by facilitating these long term trends, will provide you with the proper insight to develop a “vision” for your start-up company.  It is through this due diligence process, acquired socio-economic understanding, and resulting vision, that you will successfully be able to develop a long-term defensible position your company in the market.  Past examples of this include Ford Motor Company, Apple Computer, Wal-Mart, and many others.  All of these companies understood the long-term macro- and micro-economic trends as well as the social trends driving the market, and then used their disruptive technology, product or service offerings to uniquely position their companies, and ultimately create a dominate market position for their companies and their technology, product or service offerings. 

Investors will Buy Into Your Vision.

Having a vision for your company, in the pre-funding stages of your company’s development, will help you define your company to your potential investors.  Promoting this vision will also allow these same investors to quickly understand the big picture of benefits of your company’s technology, product or service offering to your customers, the market and society.  Therefore, it is important to do your market research and competitor due diligence early so that you can create a vision of your company and its technology, product or service offering. This will provide your potential investors with the ability to better understand both the macro- and micro-economic as well as the social trends, and then quickly envision how your company and its product offering can have a long term sustainable impact on the market. Developing a vision can provide the “hook” to get your investors committed to investing you and your start-up company. 

As a recent example of this, Pure Digital Technologies, Inc., has created Flip Video, a line of simple, low-cost, pocket-sized digital camcorder products featuring built-in software that makes it easy for everyday consumers to instantly capture, edit, and share video and then easily upload this content directly to online video sharing sites, including YouTube.  Recognizing the “YouTube” video phenomena as a long-term, social trend – the desire to facilitate real-time video access and then share this content, within the teen and young adult population segments, Pure Digital Technologies created a compelling product for to address this market need.  Again, it was through their understanding the general socio-economic market trends, and the application of technology to address these trends, that Pure Digital Technologies has created its corporate vision and then developed a unique product offering to be a major player targeting the end consumers.  It has also allowed them to attract major venture capital investors like Sequoia Capital, Benchmark Capital, Focus Ventures, Crescendo Ventures, Steamboat Ventures, VantagePoint Venture Partners, and Samsung Ventures. Therefore, by developing a technology, product or service offering with a vision, this will help facilitate you and your start-up company to attract and secure third party investment capital.

Vision will Provide Your Company Focus.

Developing a vision for your company can also be beneficial to your start-up company in focusing on its post funding activities.  As such, it is your defined company’s vision will allow you to focus your company’s day-to-day efforts regarding:

  • Product Development,
  • Marketing,
  • Sales,
  • Strategic Partnerships and
  • Other.

As an example, if your company’s vision is to provide the most leading edge products in the market, you will focus your company’s product development efforts to provide the market with leading edge products that differentiate themselves in the market through their innovative features applications or service offerings.  In addition, this vision will also impact how your start-up company markets and then sells these same products to the market.  It will also drive your company to focus on specific types of potential strategic partnerships that help facilitate the overall vision of your company.

This corporate vision will also manifest itself throughout your organization, from the CEO down to the lowest level employee. This will include setting the overall corporate strategy and the development of individual product marketing plans and tactics. The end result is that all employees, within your start-up company, will not only understand the overall corporate vision, but work to facilitate this vision in their everyday tasks.  This will ensure efficiency and efficacy throughout the organization.  This type of focus, as a result of your corporate vision, will ultimately provide a significant benefit to your start-up company, thereby facilitating its success in the market.

Vision Can Create a Long-Term Successful Company.

Your company’s vision can create long-term success for your company.  By recognizing the value of a corporate vision and appropriately instituting this vision throughout your company, you can then create a long-term and differentiated position for your start-up company in the market. As a result, customers will recognize the value of your technology, product or service offering in the market and be willing to pay for this differentiated technology, product or service offering.  Excellent examples of this include Sony, Apple, Toyota, etc.  All of these companies recognize their the value of creating a unique position in the market by developing a long-term vision that that creates value that is clearly recognizable to their customer base.

All start-up companies can benefit from developing a vision for their company and their technology, product or service offering.  This vision must be based on long-term macro- and micro-economic trends as well as social trends in the overall market. By doing your research and due diligence, the development of this vision can set a clear path forward for your company that will provide you with benefits during both the pre- and post funding phase of your company development. At the same time, this vision can also create a long-terms sustainable position for your start-up successful company in the market.

May 25, 2009 Posted by | Venture Capital | 2 Comments

Many Angel Groups Have “Cheapened” the Reputation of Traditional Angel Investors

Traditionally, a typical angel investor was a high net worth individual that had success as an entrepreneur, by starting their own company, being successful in the market, and then continuing their profitable private operations, going public or selling out to a third party.  These traditional angel investors had real entrepreneurial experience and the required insight to what it takes to develop an idea, bring it to market on their own, and fight through the trials and tribulations of a successful start-up company.  In addition, as a result of their own entrepreneurial business success, these same individuals often used their financial resources to help other entrepreneurs, by investing a significant amount of their own monies in early stage companies and mentoring the development of these same companies.  These traditional, entrepreneurial-based, angel investors were risk takers that had earned their stripes through the school of hard knocks by having gone through many of the same trials and tribulations of a typical entrepreneur and at the same time had real start-up experience to draw upon when mentoring their start-up company investments. 

During the last 20 years, a new angel investment structure called the “angel group” has developed across the United States and the world.  Here, bands of individuals, in many cases, with little or no entrepreneurial experience, invest small amounts of their individual members’ monies, aggregated as a group investment, into these same start-up companies.  In many cases, this angel group investment structure has “cheapened” the reputation of traditional angel investors – opening the door to many individuals with little or no start-up experience, who claim, by virtue of investing a small, insignificant amount of their own money, to be experts in mentoring entrepreneurs and their start-up companies. This article outlines my reasoning for this opinion and provides a basis for this discussion.

“Accredited Investors” – A Very Low Bar for Entry

Most angel groups, due to Security Exchange Commission investment rules, require their investors to be “accredited investors”. This accreditation has nothing to do with personal entrepreneurial experience; it is purely a financial measure providing a basic assurance that an individual has the financial resources to risk their own monies in a high risk type of investment.  At the same time, his accreditation is also used to protect this same angel group against future legal actions pertaining monies lost on these same high risk investments.  This SEC accreditation requirement, in its basic form, looks at the individual investors, their spouses, and their financial resources in determining if they can take realistically invest some of their monies in high risk investments, with a minimum peril to their overall financial well being. 

As defined under the R-501(a) of Regulation D of the Securities Act of 1933, an accredited individual investor must meet at least one of the following guidelines:

  • A natural person whose individual net worth or joint net worth with that persons spouse at the time of the purchase exceeds $1,000,000,
  • A natural person who had individual income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 in each of the two most recent years and has a reasonable expectation of reaching the same level of income in the current year.

To most entrepreneurs, the above criteria may seem like a high bar to pass for individuals looking to participate as investors within the structure of an angel group. But in fact, the first criterion, as outlined above, is a very “low bar” for many potential group-based angel investors. This individual net worth criterion includes an investor’s home, and therefore in states such as California, where home values often exceed $1,000,000, this criterion is easily met by many individuals who wish to become an angel investor within an angel group.  Therefore, many individuals with no entrepreneurial start-up experience have the financial capacity to be an “accredited investor”, as defined by the Securities Exchange Commission.

 $10,000 to $25,000 – An Insignificant Investment Often with Little Additional Value

Most angel groups require their angel investors to invest a minimum of between $10,000 and $25,000 per individual start-up company investment.  For start-up companies that are looking for up to $1,000,000, for their first round of third party investment, this is really an insignificant amount of money, as measured on an individual basis.  In addition, for these same individuals, who meet the above outlined SEC criteria, this investment, again is a small amount of their net worth (e.g. $10,000 is 1% of a $1.0M). So, the amount of risk that these individual angel investors are willing to incur, as part of an angel group, is insignificant.

Beyond their financial commitment, in many cases, these angel group-based investors are often retired individuals who are looking for something to do to occupy their time, and at the same time, have something to discuss during cocktail parties or while they are out on the golf course.  With their individual investments being insignificant amount of their total net worth, if they make a return on this nominal amount of money, fine, if not, well they are not out much money anyway and they can write their investment off on their taxes. This type of angel group investing, while low risk for the investors, often yields little additional value, beyond the initial amount of cash for the entrepreneur and their start-up company, as many of these same investors are not really involved in their investments, do not know the market space, and as a result cannot add significant value beyond their individual minimum financial investment.

Where is Your Start-up Experience?

Many of these same individual, angel investors that participate as part of an angel group have little or no personal start-up experience.  These angel group members are not entrepreneurs by nature, or through personal experience. In many cases, these angel group investors are ex- corporate lawyers, bankers, accountants, etc. that have worked for large corporate enterprises their whole professional careers and have, through their safe career paths, accumulated enough assets to become an accredited investor members of a given angel group. These same individuals have never started a company, met a payroll, nor have they taken on any significant personal or financial risk in their whole lives.  They, more often than not, have lived within the protected “cocoon” of a corporate enterprise and have been successful in a very narrowly defined “job” scope.  But, often, it is these same individuals believe they have the necessary experience and business savvy to direct a start-up company through the trials and tribulations of their development. This does not make sense to me. With only their large corporate enterprise experience to draw upon, it is impossible for these same these angel group investors to provide real world based entrepreneurial advice to their start-up company investments. 

Entrepreneurs, Beware of the Angel Group “Dog Pile” Experience

 Many of these same angel groups are headed by individuals with strong personalities and opinions, but little real world entrepreneurial start-up experience.  In addition, many of these same individual angel investors, due to their lack of experience with start-up companies, are “followers” throughout the start-up company due diligence process and do not add any significant value.  These individuals often follow the lead of other strong personality members of these angel groups and as a result entrepreneurs often experience uninformed or undue criticism from individual investors within these same angel groups. The result is that, many times during due diligence review meetings, one of the lead members, with a strong personality, exposes a potential hole in the entrepreneur’s business plan and all of the follower investors “dog pile” on with more uninformed criticism. This results in an insulting experience for the entrepreneur and a resultant bad reputation for the angel group.  The lack of understanding of the difficulty of starting a company and personal real world entrepreneurial experience, from the individual angel members, can really expose the personality of an angel group and give entrepreneurs a “stay away” attitude toward a given angel group.

“Pay-to-Play” Angel Groups

Today, there are many “pay-to-play” angel groups out there. Here, the individual angel group members may or may not pay annual dues to become members of a given angel group. At the same time, the organizers of a “pay-to-play” angel group work to find investment opportunities for their angel group investors.  These investment opportunities are typically presented to the members of these same “pay-to-play” angel groups on a monthly basis.  Here, it is the entrepreneurs that pay $1,000 to $2,500 per angel group review meeting, in a given city, to present their company’s business plan in front of a group of potential angel investors.  More often than not, the entrepreneurs who are presenting do not know who, or how many potential investors are in the room.  In addition, the inherent problem with this “pay-to-play” angel group business model is that these same angel group investors do not get the best companies to present, only those that have the immediate financial means to “pay-to-present”. Therefore, by definition, they may not get the best start-up companies with the highest potential returns for their invested monies. This seems like an inappropriate angel group business model to me, and is, at the same time, very expensive for the entrepreneurs, with no guarantee of receiving any investment monies. That being said, there multiple angel groups in the market that use this business model.

 Many Angel Groups “Think” They are Venture Capitalists

One final problem with many angel groups is that, by virtue of their investment monies, they think they are venture capitalists and often treat the entrepreneurs very poorly.  With their limited financial resources, and more often than not limited network of contacts or experience in angel funding, they expect the respect, equity positions, and stock purchase agreements that the venture capitalists typically get for making much more significant financial investments.  They forget they are in reality inexperienced early stage investors that are looking invest in and then get their start-up companies ready to receive the next level of investment funding, from this same professional venture capital community.  Today, this venture capitalist mentality is too often prevalent among angel investment groups. This can make the angel group funding an unpleasant experience for these same entrepreneurs.

As outlined, angel groups in many cases provide an alternative for individuals, who make insignificant investments, incur minimal risk, and have little or no start-up experience to invest in early-stage, start-up companies. This type of group investment structure provides a funding avenue for entrepreneurs that was not available 20 years ago. This group angel investment structure, through its diverse membership, varied backgrounds and experience, deviates significantly from the traditional single angel investor, with a proven entrepreneurial background and significant real-world start-up experience.  As outlined, the result, in many cases, is that this angel group structure has “cheapened” the reputation of traditional angel individual investors and provided a funding experience that may be difficult at best for individual entrepreneurs.

May 18, 2009 Posted by | Angel Group, angel investors, Venture Capital, venture finance | 3 Comments

A Competitive Analysis Helps Position Your Company in the Market and with Your Investors

All business plans should contain a thorough competitive analysis of your start-up company and its technology, product or services offering.  This analysis is a key to positioning your company in the market.  It is also a key to convincing your investors that you have done your homework and have a product offering that provides a long term, sustainable competitive advantage.  Finally, a thorough competitive analysis provides a basis to inform these same investors that your company and its technology, product or service offering is something worth considering investing in with the potential for a substantial return on investment.  This article outlines various items to consider when developing your start-up company’s competitive analysis.

Never Tell Your Investor There is “No” Competition

One of the biggest mistakes a first time entrepreneur can make when developing their business plans is to not spend the appropriate amount of time developing a thorough competitive analysis. This is a huge mistake and will often come back to haunt you.  In addition, many times I have witnessed entrepreneurs trying to tell their potential investors that there are no competitors or no “direct” competitors for their technology, product or service offering. This again, is a big mistake with investors.  First, they will not believe you.  There are always competitors or potential competitors within the target markets for your start-up company’s technology, product or services offering.  Second, making this statement will cause you to lose your credibility with the same individuals you are trying to impress with your knowledge of the market. Therefore, as an entrepreneur, one must take the time to do their research and due diligence to identify their competitors, both large and small, and also at the same time identify those companies that have the capabilities to enter your market space with a compelling product offering.  One thing is for sure, if you are successful company and making money in a given market, the competitors will come.

Listen to Andy Grove

Andy Grove wrote a book entitled “Only the Paranoid Survive.”  In his book, Andy outlines his belief in the value of paranoia in business. Here, he rightfully claims the following: “Business success contains the seeds of its own destruction. The more successful you are, the more people want a chunk of your business and then another chunk and then another until there is nothing left. I believe that the prime responsibility of a manager is to guard constantly against other people’s attacks and to inculcate this guardian attitude in the people under his or her management.”

 This belief that “only the paranoid survive” must drive your start-up company when entering a market and developing a long term competitive position in this same market space with your new technology, product or service offering.  This basic understanding of business also underlines the value of developing a thorough competitive analysis for your start-up company.

Determine the Key Product Attributes

When reviewing the market and its competition, one must focus on what key technology, product or service offering attributes are important to your customer base.  This attribute list should include all the features, functions and capabilities that you believe are important to your customers.  The purpose of developing this key attribute list is to develop a list of identified and compelling features, functions and capabilities that the current competitors use to differentiate their products in the market. It should also be noted that these attributes should be verified with your customer base.  Often what you believe, as an entrepreneur, are important features, functions and capabilities are not necessarily that important to your customers.  So, spend the time talking and verifying key product attributes with your customer base.  This will go along way when presenting your competitive analysis to your investors.  This will also substantiate the credibility of your analysis. 

Present a Succinct Summary of Your Analysis to Your Investors

To present your competitive analysis to your investors in an easy and readable format, often it is best to summarize all of your due diligence and research on your competitors in a table format.  This table presentation is easy to read for your investors and can be used to present a substantial amount of important information in a succinct and compact format.  To develop this table lists all of your competitors, along with your start-up company, on the horizontal table axis.  On the vertical table axis list out the important and identified key features, functions and capabilities that differentiate the various product offerings to their customer base.  This table, as outlined, and if developed with the appropriate level of detail, will provide a clear view of the competition in the market.  It should also delineate, to your potential investors, how your company’s technology, product or service offering provides a clear, sustainable competitive advantage in the market.   

In addition to your table-based competitive analysis presentation, you should include a summary paragraph that outlines the conclusions of your competitive analysis table to your investors. These conclusions should emphasize to your investors the clear advantages of your company’s product offering in the market. By presenting your competitive analysis and due diligence in this format your investors will get a clear, concise summary picture of your start-up company and the competitive advantages of its technology, product or service offering in the market.

Position Your Company

Once you have developed your company’s competitive analysis and presented it in the appropriate table format, one should next use this same information to position your company and its product offering in the market.  This is best accomplished by developing a “perceptual map” – a two axis graphic which is based on the two key attributes that differentiate various successful product offerings in the market.  (As an example, two key attributes for the microprocessor market can include speed and power consumption.)  These two key attributes are then used to position your company and its product offering with regard to your competitors.  This “perceptual mapping” exercise is a key to developing an identified market position with regard to your start-up company and its product offering and the other various competitor product offerings in the market.  When determining your company’s product positioning one should consider the following:

  • Does your company’s product offering address the “high” end of the market according to these two key attributes?
  • Does your company’s product offering address the “low” end of the market according to these two key attributes?
  • Does your company’s product offering address the whole market?
  • Does your company’s product offering only address a clearly identified sub-segment of the market? 

The object here is to position your company and its product offering relative to your competitors.  This “perceptual mapping” positioning analysis will provide your customers and investors with clearly identified market position that differentiates your start-up company and its product offering from the competitors in the market.

As outlined, spending a significant amount of time and effort to develop a proper competitive analysis is required for your start-up company and its technology, product or service offering. This analysis is very important to both your potential investors as well as your potential customers.  Also, if done properly, this competitive analysis also provides you and your start-up with a differentiated market position that will be attractive to your customer base and allow your start-up company to secure market share from existing competitors in the market.  Finally, it also allows you to provide your investors with a clear picture of the long term and sustainable competitive advantages your start-up company and its technology, product or service offering provides the market.

For more information on developing a proper competitive analysis for your start-up company, along with a detailed discussion on “perceptual mapping” refer to my new book: “Business Planning, Business Plans and Venture Funding – A Definitive Reference Guide for Start-up Companies.” This book is available at http://www.Amazon.com.

May 11, 2009 Posted by | Business Planning, Business Plans, Competition, Competitive Analysis | Leave a comment

Entrepreneurs – Know Your Start-up Company’s Funding Requirements and Associated Significant Milestones

As part of the funding process, entrepreneurs need to spend time delineating their start-up company’s funding requirements and associated significant milestones. These items are one of the first things potential investors review. In addition, having mapped these significant milestones to your anticipated funding rounds is a key to gain credibility with your potential investors. This article outlines various items entrepreneurs need to consider regarding their funding requirements and associated milestones.

Delineate a Detailed Development Schedule

As part of a complete business plan, entrepreneurs must delineate a development schedule for their start-up company’s technology, product or service offering. This development schedule must be based on realistic assumptions, such that it is not only believable to the start-up company and its team, but it must also pass the scrutiny of potential third party investors and their consultants. Therefore, it is important, as an entrepreneur, that you take the task of delineating a detailed development schedule seriously. Any misrepresentations, or items in your start-up company’s development schedule that do not make sense to the investors and their due diligence team will cause them to question your credibility as an expert in your industry, as well as your start-up company and its management team. Remember, investors at this point, are looking for reasons not to invest in your start-up company, and so any upfront inconsistencies in the details of your development schedule will give them a reason to move on the next investment opportunity.

Identify Significant Milestones

Once you have completed a detailed development schedule, your next step is to review it from a funding requirements point of view. Here, you need to determine what the significant milestones are for your start-up company’s technology, product, or service offering. This can include items such as the following:

  • Technology simulation completed,
  • Completion and delivery of prototype, 
  • Alpha testing completed,
  • Beta testing completed,
  • Second prototype developed and beta tested,
  • Production units completed, and
  • Delivery of first production units.

Your start-up company’s milestones may be different, but the key here is to identify the significant milestones associated with the development of your technology, product or service offering. Here, investors are looking for points in your start-up company’s product development cycle that add significant value to your company and that at the same time can be used to increase your company’s valuation for subsequent funding round, as necessary. It should also be noted that development milestones should necessarily include both business and technology milestones. Remember, you are in business to secure customers not just to develop a technology, product or service offering.

Determine Your Total Funding Requirements

Once you have completed your development schedule and identified your significant milestones, you must review your start-up company’s financial pro forma statements to determine your company’s funding requirements. Here, reviewing your cash flow statements is a key to determining your company’s total funding requirements and the associated timing of this funding. This is where most start-up companies have some issues and it may require you to secure external help to both develop your financial pro forma statements (Income Statements, Balance Sheets, and Statement of Cash Flows), and to review and delineate various funding scenarios.

At this point it is important to develop several financial pro forma funding scenarios including:

  • Best case scenario,
  • Typical case scenario, and
  • Worst case scenario.

Each “case” scenario needs to be developed to include both internal (development) and external (market) driven factors, both of which will affect your company’s projected financial pro forma statements and hence the funding requirements for you company. This will take a significant amount of time and effort, but, in the end you will have developed a complete picture of your start-up company’s funding requirements. Finally, each funding “case” should include a complete list of the assumptions that go along with each scenario. This type of financial analysis and presentation will earn you credibility with your investors.

Map Your Development Milestones to Your Funding Requirements

The next step is to “map” your significant development milestones to your funding requirements. This can best be presented in table form or graphic form. This mapping provides your investors with a complete picture of the funding requirements of your company and the associated significant milestones. Many first time entrepreneurs do not go through this step and it generally will provide difficulty when it comes to investors wanting to understand the value of your company at the various points of its development. So, spend time reviewing your significant milestones and mapping them to your funding requirements, this will provide for smoother discussions with your investors.

Be Flexible

Once you have identified your significant milestones, determined your total funding requirements, and mapped these two items, learn to be flexible with your potential investors. Very seldom does the original funding scenario (e.g., $10M of total funding in two funding rounds – $4M and $6M) that you envisioned for your start-up company, or that you have mapped out in your business plan, come to fruition as presented. This can be for many reasons, including, but not limited to:

  • Your potential investors may only have a small amount of money to invest (e.g., angel investors),
  • Your investors would like to see your product’s significant features, functions, and capabilities proven out, before they invest more money,
  • Your investors have concerns over your company’s ability to secure market traction and would like to see your company secure a lead customer before the next round of funding.

All of these items and an infinite number of other concerns and issues will dictate your company’s final funding rollout scenario. The key here is to be flexible. Having gone through the details of your start-up company’s significant milestones and total funding requirements, it will then be easy for you to support any funding scenario that comes your way. Also, in reality, it may be beneficial for you and your company to entertain other funding scenarios, than originally envisioned. As a result, this may require you and your team to give up a smaller amount of total equity in the long run, and enhance your company’s future valuation in follow-on rounds of funding.

As outlined, spending a significant amount of time developing a detailed development schedule, identifying significant milestones, determining your total funding requirements, and then mapping these milestones to your start-up company’s funding requirements is key to securing funding from third party investors. By doing this work upfront you are guaranteed to increase your credibility with your potential investors. This will also ensure smoother discussions with your investors, once you move forward in the due diligence process.

May 4, 2009 Posted by | Business Planning, Business Plans, Venture Capital, venture finance | 1 Comment