The traditional approach to attracting venture interest is to present a high impact and game changing concept. At the same time, one needs to convince potential investors about the competency and drive of the management team. It's extremely hard to accomplish the latter as a first time entrepreneur. The best way to do it is by presenting a fait accompli: wow your investors with an existing, bootstrapped business.
The key is to make sure that your existing revenue represents the opporunity from the unit model perspective. I was repeatedly advised to build a business plans from the bottom up with the unit model clearly defined and then extrapolated. The reasoning works well from an analytical perspective. It works even better when presented as empirical data as opposed to speculation.
The next step is figuring out the growth paths for the business; then picking one as the winner. You gotta bet on your horse to win, don't spread your recommendations around a selection of possibilities. In the end, being strategic is about choosing what NOT TO DO and keeping focus. If you don't believe me, try modeling out multiple possible growth paths in a single excel spreadsheet. If you can't do it analytically, think how much harder it will be trying to do it in real life!
You pulled yourself up by your Ugg bootstraps? Do they even have bootstraps?
Posted by: Ariana | March 23, 2009 at 03:51 PM