So far this year our firm has been fortunate in closing 3 mid market company expansion transactions in a tough Private Equity/Venture Capital marketplace. Five glaring thoughts of “what works and what doesn’t” come to mind for those interested in bringing in equity partners for 2010:
*Do research and contact a few choice targeted firms that are in your business, don’t shotgun and contact a directory full of firms, you are wasting your energy.
*The widget or technology is your child, but detach yourself from boring the VC group with a 60 min demo of how much you love it! Stick to how the potential funding will accelerate the customer’s willingness to buy now rather than later.
*Clearly identify competitors that exist now, in the future, and how you will defend your company. Do it now as this is one of the main concerns in investing in companies during today’s economy.
*Show the five year plan you will perform. You will have to live and execute later what you put out there now, be warned!
*Size up the Venture Capital firm at your presentation, these will be your long term partners, not just a transaction. Contrary to most folks looking for expansion monies, you will be on the board with this firm and all the personalities. Do you like them? Do you love them? Do they love you? Let me ask again, how much will you really love them for the next 5 years?
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