When you create your power points or walk over to the nearby diner or coffee shop for a quick informal chat with an investor, remember the following:
1. Focus and niches are still very much in. Broad brush and shot gun approaches are out.
2. Your strategy needs to relate to your competition. If you differ dramatically you must have a defensible reason for doing things differently and it must be supported by customer validation.
3. Depth in all areas – technology, domain, implementation, business development and recruitment – is required. Miss one and you will have some tough questions to answer.
4. Your sales pipeline needs to be well defined and well presented. Other than strategy and focus, investors need to understand how your cash flow projections tie back to actual proposals sitting in front of customers.
5. You need to maintain a balance in presenting the soul of the firm and your cash generation function.
For us a typical investor visit takes two full days from the entire team. The follow up, if and when it occurs takes another week of serious bandwidth. Will it be worth it? I don’t know.
Conclusion: If you run a business that makes money and has the promise of keeping on making money, finding investors is not difficult. Finding the right color of money with the right term sheet is.