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Reducing Perceived Risk Increases Value as Well as Improving the Odds
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Some Mistakes Come Down to the Calculations That You Make
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Headroom
Large x Small
Compound Calculations
Other Mistakes Are Based on Poor Planning and Analysis
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Wrong InvestorWrong
Valuation
Poor Documentation
Poor Presentation
Poor Market Knowledge
Poor Business Plan
Business Plan Mistakes Are the Most Common and Damaging
Inadequate business plan
Not showing investors how you will spend their money and how you will generate returns for them
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Opportunity
• Description
• Size and Growth
Management Team
• Resumes
Competitive Landscape
• Companies
• Products
• Alternatives
• Enduring Advantage
Finance
• P&L
• Cash Flow
• Capitalization Table
Telling a Compelling Story
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A Commonly Used Story — In Five Chapters
Size of the prize
Runners and riders
Motorcycle cheats
Advice to the jockey
Selling the horse
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A Commonly Used Story — In Five Chapters
Size of the prize
Runners and riders
Motorcycle cheats
Advice to the jockey
Selling the horse
19
A Commonly Used Story — In Five Chapters
Size of the prize
Runners and riders
Motorcycle cheats
Advice to the jockey
Selling the horse
20
But Never Forget One of the Most Powerful Influencers That You Have
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The Simple Formula to Remember …
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Show that you have a good idea that solves a problem and that addresses an unmet need; i.e., there is an identifiable market.
Show that this translates into a commercially viable product, with a business model that can generate revenue and margin; i.e., that it is commercially viable.
Show the investor that your team has the skills and expertise needed to deliver.
Show the investor that your early advantage can be sustained long enough to be able to generate growth that can continue to expand.
Everything after that is down to execution.
Recommended Reading
Marketing Essentials: Five Best Practices When Seeking Venture Capital InvestmentDavid Mitchell (G00232191)