Not the type left by a Range Rover. A physical product, example of service, a flagship customer or sales revenue. Serious investors need to see these. In our initial investor presentations everything was theoretical. We didn’t bomb strategically, but failed to get traction. Are you sensing a theme yet?
We had exceptionally well developed plans. Costs, bottom up sales forecasts, 3 years of financials, customer agreements to sell, but nothing physical. Not much has changed in business since the first markets appeared 3000 years ago. People need to see, touch, smell and feel what you are doing. They believe what they see. There world view is shaped by personal and often physical experiences. So to in business investing and capital raising. Put simply, the further you are down the development the track the more serious you seem.
- If you have thorough business plans: Ok
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If you have a prototype product: Good
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If you have a commercial grade sample: Great
- If you have sales revenue from your widget: Excellent
The message a plan sends is: “Were serious only if you give us money”.
The message a prototype sends is: “We have put some money on the line to show you it works”
The message sales revenue sends is: “We believe in this. We have invested substantial funds to get to this stage. So far it’s working, and we are serious”
We are at protoype stage, so it is a much harder task to raise capital. We need to move up the food chain to get our Angel and we know it. What message are you sending your investors?