Venture Capital A Tale of Two Companies: Your Approach Can Make A Difference | A Tale of Two Companies: Your Approach Can Make A Difference |
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Two companies were seeking similar types of equity funding. Each had prepared a ten minute presentation to interest potential investors in their company. One succeeded in getting a lot of interest, the other never did get any active investors looking at their company. Company #1 was seeking funding for expansion into a new technology. When asked "What does your company do?" the CEO replied that they were in the wireless metering business. Sounds pretty dull, and there really isn’t any reason for anyone to get excited about this company. Needless to say, no investor came up to this company to ask more questions. Company #2 was also seeking funding. When asked "What does your company do?" the CEO replied "We increase the market value of apartment buildings by up to 20%." The reaction of any potential investor was "How do you do that??" Company #2 got the attention of potential investors because the investors wanted to know how they were able to raise market value so substantially. What is the difference? Company #1 did not present a value proposition to the potential investors. While they had a viable business, they did not understand the needs of their audience. Company #2 had a distinct value proposition to their marketplace and quickly drew the interest of potential investors. Companies are usually so involved in the "HOW", that they often miss dealing with the "WHAT". If your company can effectively communicate what you actually do, the "WHAT", then any one interested in the company or product, (the "HOW") will be forced to ask, "How do you do that?" A knowledgeable yet dispassionate professional can help your company create a clear message of your company’s products that will help market your products as well as attracting potential investors, whether they be debt investors of equity investors.
Peter Jamieson, is a Principal of Interim Executives US, which provides knowledgeable insights to companies seeking third party funding. Contact Peter at peterj@interimexecutivesus.com or on the IE Website, www.interimexecutivesus.com If you found this article interesting, you may find be interested in reading A Funding Success Story
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