The rise of Groupon – Infographic produced by Aman Kumra
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being remarkable
Seth Godin on why being remarkable can be the best marketing tool for your business.
Throw your best pitch
You will need style, presence and command when you make your very best pitch to investors. Remember, this is your opportunity, but their meeting. Your preparedness is quintessential to the success of your presentation.
This is not a time for surprises, although you may be asked some interesting questions by investors who may or may not be knowledgeable in your field. You can tell a story, engage in small talk and enjoy the experience, but never forget this is serious work. Your ability to convey the value of your product or service is the one thing you and your potential investors will always have in common. As experienced as these investors may be, they always remember the great presentations.
About the meeting
After a bit of get-acquainted conversation, the meeting will come to order with a typical query like, “What can we do for you?” At that moment, the game is on.
Typically these meetings take about two hours. You must be prepared with hard facts and a variety of other materials listed below, but that initial salvo is important. You should respond with a well-articulated, fact-based and concise overview of your enterprise.
Make it clear that you will be happy to expand on your remarks but get the investor engaged by asking if there are specific areas of your business about which they have questions. When they respond, pay attention. Answer the questions authoritatively. If you do not understand a question or do not have an answer, say so. Investors appreciate your honesty and your passion.
Once this introductory stage is set and you have their attention and understand their concerns, you are ready to take the floor with a directed presentation.
Remember that these investors have heard many presentations. What will make yours stand out?
Understand the investor’s objectives
Investors may come in different shapes and sizes, but they all want the same thing – winners. When you take the stage, make sure you are rested, prepared and confident with your knowledge. The investors are studying you, perhaps more closely than you think. Maintain your posture, emit a confident tone and use good body language to emphasize your confidence.
- Cards on the table – The investors want to know your business and are listening keenly to how you articulate your venture.
- Present the team – Make sure the investors know you have an experienced support team of experts and that your team is their team.
- State your needs – The investors want to hear you state your needs, where the investment will be used and how it will promote your product and, of course, what makes this a good investment.
Most of, all investors want to be repaid. If you lack confidence, so will they.
The seven step presentation
Your presentation should follow the seven-step process. This provides all the information the investor requires in an orderly manner and gets you to the finish line in a structured process. You will do well to practice this presentation in advance. You may also want to have listeners ask you likely questions. Even with all this preparation, you must maintain your ability to think on your feet. The practice simply establishes a base upon which you can rely.
- Introduction – This is your opportunity to convey pertinent information about your company. Define your company in one concise sentence. State your basic idea along with your value proposition. Your introduction clearly states what you do and who your targets are.
- Team Concept – Convey the attributes of your management team, what makes you unique and what attributes this team has that inspires confidence.
- Your Market –Clarify your market, show the need for your product within that market and what remedy your product brings to the table. Clarify the size of the current and future market.
- Your Solution – Clearly demonstrate your product’s solution for the marketplace. Establish the product’s value and show the demand with supporting facts.
- Reveal Your Business Model – Tell the investors where your business is and where it will be after you procure the investment. Present verified results as to your current sales, production and financial performance. Demonstrate your command of the dynamics of the industry and market.
- Discuss Competition – The investors know you have competition. Identify and describe the competition within the framework of your strategy. Illustrate your competitive advantages.
- Your Request – Describe what you need from the investor to make your venture a success. Detail what you expect from a business partner and show quantitatively the expected results of the investment.
In summary
After you conclude your presentation, there will be questions. Listen to the complete question. If the question is confusing, get clarification before answering. Maintain your professional composure throughout the meeting. You are the expert. They have the money.
You will have your mission statement, perhaps even a video or demo, your financial model and all your financial statements and market analysis. Stay with the conclusions derived fro those important quantitative reports. If necessary, refer to them for information.
In the end, there are three likely scenarios. The investors will deny your request, they may approve your request or they may ask for another meeting. In any case, you should receive a preliminary indication as to what is the next step towards closing the deal.
The right risk
Entrepreneurial ventures are certainly not for the feint of heart. Innovative enterprises involve risk taking. There is no way around it. The world knows the Bill Gates, Steve Jobs, Ted Turner and Sam Walton success stories. The global economy is filled with entrepreneurial success stories, and, yes, just as many ventures that did not succeed. Once again, innovative enterprises involve risk taking.
And, not everyone is geared to take risk or should take risk. Let’s understand one important thing. Risk taking is not throwing ideas against the wall and hoping they stick. Good risk taking is a measured, structured and necessary process. Today’s economic conditions highlight the need for risk takers and the rewarding opportunities that await savvy risk takers.
The Gates, Jobs, Turner and Walton rags-to-riches stories have many similarities. Basically, they had such compelling products or services that their businesses simply jumped into our culture, right? Not exactly. These giants took risks, but they had plans, good plans and they followed sound business practices to enable their passion.
While the leaders were most certainly big risk takers, they had their eyes wide open. They may not have had enough credit to start but they had business plans, compelling ideas and conceptual business models. Entrepreneurs need to take risk, but risk can be termed informed risk or uninformed risk, structured risk or unstructured risk. A surefire way to fail is take uninformed and unstructured risks.
When Turner paid $2.5 million for the dilapidated, debt-ridden WJRJ radio station, it was a risk, but not uninformed or unstructured. The transaction included no cash and was simply a stock for equity swap. With no money invested, how much risk was Turner really taking. The man had a vision and a plan, and he knew how to market both. The result is the mammoth CNN Empire that revolutionized worldwide media coverage and paved the way to the information age.
Gates and Jobs had products. What products they had! Those products are so commonplace today that it seems impossible the entrepreneurs had difficulties launching new ventures. But, they did.
Don’t forget Sam Walton. He launched the behemoth Wal-Mart enterprises with money borrowed from family members. Eventually credit was not a problem, but there was no way he could have launched without creative financing.
Apple and Microsoft used imaginative ways to preserve their precious cash. Like many entrepreneurs, they found ways to solve problems, often trading equity for effort. That may be the reason that the Apple and Microsoft cultures remain as committed as they are. The ability to find creative solutions characterizes entrepreneurial leadership.
These risk takers encouraged outside-the-box thinking and applied it to their products and business practices. Their equity for effort approach was not borne from naiveté, far from it. Equity for effort meant preserved cash, a committed and loyal workforce and an environment where everyone stood to win if the mission was accomplished.
Researchers at Cambridge University have studied the entrepreneurial mindset. In a controlled study, decisions were classified as “cold” meaning no risk, or “hot” representing high-risk decisions. Managers and entrepreneurs scored equally on “cold” decisions. On “hot” decisions, entrepreneurs were more compulsive.
Often that compulsivity is based upon their abilities to foresee solutions to problems that the structured manager cannot envision. Risk takers anticipate problems and therefore anticipate solutions. The forward thinking ability to see solutions and alternative solutions is the entrepreneur’s answer to risk. If you can get them off the beach, just ask those original equity for effort investors in Apple or Microsoft how they feel about their risk taking leadership today.
Entrepreneur traits
One of the hardest things about starting a new business is having the courage to take risks. To take risks, you have to have a certain type of personality and to succeed, you need to have a set of characteristics that ensure your success. If you start your own business, then you are an entrepreneur, and as an entrepreneur, you are a breed apart because you are doing things that others do not have the backbone to do. You are taking great risks, hoping for great rewards, and to do this successfully, you need the following traits:
- You need to be able to take control and direct things with authority. You need to have authority with your employees, as well as with the people you buy supplies from. An entrepreneur creates their business by having control over the events that govern it. If you can have authority to get deals, you can offer lower prices to your customers. That makes your business successful.
- You need to have a healthy body and mind. By working constantly, people get sick and as an entrepreneur, you do not have time to get sick.
- One of the most important characteristics you need to be successful is confidence. As an entrepreneur, you need to be confident in your decisions. If you are not confident in your decisions, you will not trust yourself. You need to have complete confidence to know you are making the right choices for your company.
- You need to be completely aware of you surroundings and the various situations that may come up. By having this awareness, you can understand all the ramifications of your decisions. By analyzing decisions and situations, you can predict problems and prevent them before they happen.
- Having a realistic outlook of one’s success is important, as is the ability to dream and think outside the box. If you have an honest outlook of how you will do, you will be able to set goals that are achievable.
- You need to be able to have the ability to see things conceptually. The reason for this is when things can be chaotic and crazy, it can be difficult to concentrate. As an entrepreneur you must be able to see through the chaos. With the ability to think conceptually, you can see the solutions to problems that may be grounding other entrepreneurs.
- You need to be attracted to challenges. In fact, you need to thrive on challenges because being an entrepreneur is all about meeting challenges and defeating them. If you are afraid of challenges, then you will likely fail in your business. This also involves looking at risks and thinking the risks through properly to make the right decisions.
- You absolutely need to be able to handle stress. It can be very stressful when a business is suffering and you cannot let that stress break you. With the ability to handle stress, you can not only get through the stressful situation faster, but also save yourself a lot of headaches down the road.
You must remember that an entrepreneur needs to love what they are doing. If your love what you do, then you will be able to work through the tough times in order to find success with their business. This is a key characteristic and without it, success is something that will not happen for you in your business.
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