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    0 Replies Latest reply on Nov 5, 2009 8:10 AM by Adducent

    “Money Call” – You have your business plan, what's next?


      The "Money Call" - You've prepared your business plan, now prepare your self!


      I see, hear from and speak with many entrepreneurs and business owners to help them with their business.


      Often it is hard to get them to see that if they are going to get their business funded they have to take the time (and sometimes some out-of-pocket cash) to take their ideas for their venture or business and get it put to paper. And get it done in such a ways as to both present their idea and venture well, but also cover the types of things that an investor and/or funding source is going to want to know.


      Let's assume you have that done. You have your plan ready, it's solid and presentable. Now you should charge out and start contacting investors and funding sources ... right?


      The answer to that is "yes" and "no".


      Yes, the next step is to find/contact prospective investors and funding sources.


      No, you should not charge out just yet. There are a few things you will want to do to prepare yourself now that you've prepared your plan.


      Once your plan is done, there are important stages you are going to go through:


      1) Finding and researching prospective investors/funding sources
      2) Making initial contact
      3) Sending them your executive summary or business plan
      4) The follow-up
      5) The telephone presentation/interview
      6) The personal meeting/presentation/interview


      Let's discuss these stages and I'll give you some tips and guidance based on my 26 years business experience.


      1. Prospective investors/funding sources.


      When you find someone who seems a likely investor/funding source prospect and before you contact them; if possible try to discover as much as you can about what types of businesses interest them and what they've invested in, in the past.


      Doing this will help you fine tune who you approach. They may be an investor or funding source but if they are not interested in your type of business it's not going to help you to contact them and it wastes your and their time.


      Almost all funding sources and many Angel Investor groups or investment firms have websites. Very often on their websites it will tell you what types of businesses and situations they are interested in and may also say what businesses and industries they've put money into in the past or that they currently hold investments in. This is important information to know so that you can determine whom is the best prospect to contact for your specific business.


      When you find someone who seems a good fit and might have interest in your business industry or venture; then you ...


      2. Make initial contact


      By researching them first, you should have any idea of what they are looking for and if your business or venture seems to be a good fit. Then you would want to find out who would be a good point of contact for you to reach out to. Often this is on their website but if it isn't, make a phone call to them and ask "who would be the person to speak with or contact about to present your business to them for consideration. They'll tell you who or what the process is for that.


      Don't tell them they must sign a Non-Disclosure or Confidentiality Agreement (ND/CA) before they can see your information.


      Venture Capital firms and most sophisticated investors will not sign them for initial discussion with prospects; or in order to read/review business plans. It is just not practical to do that due to the volume and scope of their investing interests and business. If you ask for or demand that they sign an ND/CA then you come across as someone not very experienced in business and in how things work with investors. It is a "non-starter" ... if you ask for them to sign one ... you won't get it and won't get an opportunity to present your plan to them. If you have aspects of your business that really require ND/CA protection (intellectual property, proprietary technological or business process info etc.) then at the point where they are interested and want to look closely at that part of your business ... then it is appropriate for an ND/CA to be put in place.


      If you have a good fit for possible interest in seeing your plan and they ask you to, then you ...


      3. Send them your executive summary or business plan


      When you find out whom to speak with and talk with them or find out their process; confirm whether they want you to email or mail your executive summary or business plan. In other words, find out how to get your plan presented to them in writing. They'll tell you how to get your information to them.


      Do what they tell you to do to submit your plan but ask them to confirm receipt of the plan so that you know they have it. Also, ask them when would be a good time for you to ...


      4. Follow-up (to set up an appointment to discuss in detail)


      Very Important:


      This is something that I tell my clients and help them with. Be sure that you are 100% familiar with the contents of your business plan including how any financial projections or other numbers were developed. The worst thing you can do is not be able to answer basic questions about your plan and financial assumptions that they are sure to ask you.


      Before you get on the phone with any prospective investor or funding source to discuss your business; sit down and read your own plan again ... slowly!


      Make notes about other things that you may want to elaborate on that are not in the plan or are the types of questions that may come up that are not covered/answered clearly in your plan.


      Not all business plan writer's have a lot of business experience!


      If you had your business plan written for you by an experienced business professional then ask them to help you review your plan and prepare in advance for talking and meeting with prospective investors and sources of funding.


      When you have your follow-up call be professional (but not stiff or formal ... try to strike a cordial tone but speak with confidence). Tell them the purpose of your call. Be brief and to the point tell them when you sent in your plan, ask for their feedback on it and if there is interest to set a time to discuss further.


      Some "do nots":

      • Do not try to get them to commit or discuss investing or funding your business on this call.
      • Do not get into a long discussion on why you need the funding or "what's happened" to create the need for the capital.
      • Do not give long answers to questions at this point. Be brief without straying off subject.
      • Do not volunteer information that is not asked for. Keep the conversation relevant. All you want to come away with on this call is to set a time to have a more thorough discussion if they have reviewed your plan and have some interest in discussing further.


      Keep the above "do nots" in mind and any others that seem prudent in the context of your situation and this initial conversation with them.


      If they have not reviewed your plan yet, ask when to follow-up or leave it that if they are interested they will get in touch with you (which is often the case) ... ask them how they want to "play it".


      If they don't have interest then thank them for their time and ask if they know of anyone that might have interest in your venture.


      If they do know of someone, ask them if they could introduce you or at least give you a personal contact for you to approach them. Be sure to thank them again before closing the conversation with this investor/funding source prospect.


      But what if its ...


      Good news!


      They want to set a time to talk to you about your business plan. In that call (or maybe when you have them on the phone) they are going to ask many questions about you, your venture and your business plan. You need to be prepared for those questions and ...


      5. The telephone interview


      It bears repeating:


      Before you get on the phone with any prospective investor or funding source to discuss your business; sit down and read your own plan again ... slowly! If possible prepare by reviewing with an experienced business professional.


      Take any notes from your initial contact and any subsequent information you've pulled together on the prospective investor or funding source and sit down and go over your plan again with your notes.


      If you can't answer basic questions about the information in your business; if you make naïve statements or ask questions like what we discussed about having them sign a ND/CA or "how much funding can I get from you" or "how much will you invest" (you should not ask those things at this stage) - then you will "kill" your chance to get their interest. Also, never tell them "you have to move fast on this opportunity" ... if you do then you just shot yourself in the foot. That approach is not going to be received well by any experienced and sophisticated investor or funding source.


      If you can't answer their questions, ask inappropriate ones of your own or make the wrong kind of statements ... then you have just dialed the chances down to about zero that you will be funded (from this particular source at least). Look at my article "What doesn't matter and should not be in your business plan" to get an idea of other things not to say or discuss.


      This conversation will usually dictate whether you have a shot to get in the door to receive real consideration as an investment candidate.


      If the phone conversation goes well then this often will lead to ...


      6. The personal meeting/presentation


      Be prepared (know your business, all the parts of your plan and how the numbers were generated and any assumptions, know precisely how much money you are looking for, what is needed for and how it will be utilized)!


      Be professional!


      Dress well!


      How you interact and communicate with people, not just on this specific focus of finding an investor or funding source for your business but on a whole bunch of other things, often will dictate how well things turn out.


      Not all of us were born smooth and articulate talkers, professional ‘talking heads' ... but if we give it some thought and preparation we all can frame our thoughts in such a way as to be as effective in communicating them as possible in order to reach our objectives.


      See it in your mind before you do it for real ...


      This is a powerful technique used by successful athletes and business executives.


      Before you have your first meeting with the investor or funding source; sit in a quiet place, get yourself completely relaxed and go through the upcoming meeting in your mind.


      With your eyes closed visualize the meeting as you and the other parties go through all of the steps of a productive meeting and ending positively to set the stage for a decision of more like for the next meeting or discussion.


      You can't expect a good result if you don't prepare in advance for it. Success often belongs to the one that is most prepared. Make sure that person is you! Be prepared to answer their questions thoroughly. Establish what your objectives are for every discussion or meeting that you have with them.


      Don't lock up and get stressed ...


      Breathe! Many people forget to do that when they are in stressful situations. If you feel nervous; take deep and regular breaths ... let the tension out (without making a big production out of it in front of them of course!).


      As the other parties relax as well; face them directly with your arms and legs uncrossed; lean forward slightly.


      Do not sit there biding your time so you can jump into the conversation! Be attentive, listen to what they are saying and asking. Answer them clearly and to the point.


      Remember your discussions and meetings are to get them to talk to you about your business and for you to tell you them about the business. Maintain eye contact and use positive expressions and nods but don't go overboard.


      Remember don't let anything distract you; stay focused on what you are saying and also on what they are saying (and the intent underlying their words --- very important --- do not lose sight of why you are talking with them)!


      The above tips and advice can't guarantee you will be funded by them, but it will help you have a better chance.


      Good luck and best wishes to you.


      Dennis Lowery,


      Adducent, Inc.