Attract Investors and Key Employees

How to Attract Investors and Key Employees: YOU MUST PACKAGE YOUR COMPANY! You have come a long way on your path to realizing your business goals and dreams. You had a great idea for a product or service. You recognized a need in marketplace and moved into position to fill it. You have taken first steps toward building your company infrastructure. The first few years in business have provided modest growth and you are now in a position to pursue further growth and expansion of your business. In most cases this means you will need to pursue investors to finance expansion. In support of investor and exit strategies, you may also be anticipating hiring key employees in near future. Before you try to do either of these things it is important to understand aspects of your company “packaging” that may hurt your chances to attract an investor or that talented candidate for Vice President. In order to attract quality investors, your company must look professional. Investors and key employees evaluate many of same things about your business before they commit to investing in it. They want to see following: A company with a sustainable competitive advantage An experienced management team Defensible intellectual property, products, services, or technology A solid business model with tangible revenues Demonstrated leadership in high growth markets Whether your company scores high in any or all of these areas doesn’t really matter if you do not present yourself in a way that shows your strengths and communicates clearly to your evaluators. Your story must be clearly articulated in your business plan, in your public presentations, on your Web site, in your sales collateral, and across your entire organization if you even hope to attract interest in your business and stand out from your competitors. WHY INVESTORS AND KEY EMPLOYEES MAY BE PASSING YOU OVER Without a business plan you have no chance to attract a serious investor. You may be able to get Aunt Mary or Brother-in-Law Fred to give you a few dollars just because you smile at them and tell them that you’re brilliant, but real investors know that, unless you are serious enough about your business to plan it out, you probably are not a good risk for them. Your business plan is first thing they see and know about your company. It represents your company to them. Young and growing companies often try to meet with potential investors and employees and “wing” a business plan. Competition for investment dollars and key employees is fierce, and companies with updated, crisp, and well written business plans move to top of list for what they need most: money and talent. Angel and venture firms have trash cans full of poorly written, outdated, and badly packaged business plans. By contrast, if you impress investors with your plan, they will initiate further discussions and your chance to win financial support from them increases. What Investors Look For The following is a high level look at what investors want to see before they risk their money on a potential opportunity: A crisp and concise business plan A reasonable revenue rate and exit strategy A go-to-market and sales execution strategy Pipeline methodology with forecast and sales metrics Prospect qualification measurements, identified sales territories, and sales plans that are directly aligned to company revenue objectives A solid management team, including an effective sales organization, mapped to routes to market CASE STUDY: PLAID SOFTWARE AND CONSULTING COMPANY

Plaid Software and Consulting was in business for over five years. Plaid had sustainable revenues and was looking to attract quality investors and key employees to position company for a potential merger or IPO. Unfortunately investors and key employees were not breaking down doors to work with Plaid. The biggest reason that Plaid was consistently overlooked was that Plaid had look and feel of a small, unpolished organization. The company’s Web site, collateral, and messaging was immature and ineffective. Investors and key employees saw glaring problem areas owners needed to fix in order to make company “investment worthy”. These problem areas were: The company lacked a viable business plan. The sales and marketing components of business were ineffective. Plaid represented to investors that it had a huge pipeline, yet company lacked deal qualification metrics and a validated pipeline, and had no formal forecasting tools. Plaid did not have a go-to-market strategy, mapped to an overall business plan. Plaid had no direct sales force and its inside sales resources were ineffective because they were not managed by metrics and were not paid to succeed. The company didn’t have a channel strategy. Plaid’s Web site was unattractive, hard to use, and not informative. The company’s sales collateral was badly written and was focused on features rather than on benefits to customer. Plaid’s marketing message was not developed and was inconsistent across messaging sources. Before a worthy investor or key employee would commit to Plaid Software and Consulting, company needed to bring in outside advisors to “fix” these mission critical elements.

Credit Damage: Getting Compensated for Your Loss

Until recently lawyers for victims of credit damage had little possibility to collect for damages beyond medical treatment, lost wages and property loss. Insurance companies threw up their hands in sympathy, claiming victims can only be compensated for what can be measured — tangible goods and services. But, what happens when victim has lost considerable time from work, family bank is broke and monthly payments on mortgages, car loans and credit cards payments are missed? Regardless of haggling between lawyers and insurance companies, it’s credit victim who ends up having to live with a bad credit rating. Today, there are legally accepted means for measuring loss of credit through procedure of Credit Damage Measurement (CDM). CDM is fast becoming a potent tool for recoverable credit damage awards when damage is not self-inflicted. Previously, both judge and jury, and especially insurance companies, refused to acknowledge CDM claiming it was speculative because they could not define it as tangible damage. However, in case after case, victims of credit damage who use CDM method are getting compensation for credit loss. Many factors are changing old mindset including credit bureau technology improvements, application of Fair Credit Reporting Act (FCRA), risk scoring sophistication, and development of CDM as an objective, repeatable method that measures out-of-pocket damage reliably. Credit Ratings and Recovery The impact of a bad credit rating is much more significant than most people think. Consider what poorly rated consumers face when they want to lease or buy vehicles, obtain credit cards, buy or lease or refinance their residence. In most cases, it’s an easy decision for creditor: credit application is simply turned down or borrower is charged a much higher down payment – maybe thousands of dollars more with monthly payments that are typically several hundred dollars more. “A person with bad credit is viewed with suspicion and is charged significantly more for future extension of credit because lender feels need to protect against a greater risk or default,” says Tom Key, a civil litigator practicing in Tustin, CA. “Over years I have heard reports of financial damages from clients who have been wrongfully terminated, defrauded, injured in an accident or suffered losses from breach of contract,” Key says. “These victims were especially distraught over fact that their prime credit reputation, carefully nurtured for years, is destroyed overnight. It seemed to me that there must be a way to compensate victims for that type of loss.” Key has witnessed reactions of many jurors who failed to award a victim of credit damage their rightful compensation simply because they could not quantify damages. “Jurors want a specific loss that they can count, hold and see,” says Key. “Their reasoning is that they need to know that it is genuine. They have a tough time awarding damages based on sympathy. In order for them to confirm authenticity of a claim, they want to see its quantification.”