Venture capital in the New Economy has doubled. In spite of that
fact, the amount of investment capital is challenging is as ever to
access. The amount of money has increased and so have the number of
Some venture capitalists report seeing five to seven times as
many deals as last year. That means fewer than 2 percent of deals
reviewed are getting funded. Part of the reason is the amount of
money in each deal is higher. Another major factor is the number of
e-commerce deals, which attract more and larger investments, has
increased 1,000 percent in two years. And we find when considering
investments made by venture capitalists in Internet deals, only 12
percent of investment dollars go into start-ups.
Given the level of competition in today's market and our
remoteness to the hot capital markets, the Tech Center expends
considerable resources in helping companies prepare for the day when
they get the opportunity to make their pitch. Some Tech Center
clients have been around the block before and need little or no
coaching while most are new start-ups and are receptive to all the
assistance they can get.
The process goes something like this.
New clients are given an opportunity to share their business
concept at an initial meeting. Questions are asked, recommendations
are made, and clients are given a self-scoring business plan
evaluation and an outline for an oral presentation. The client
leaves the meeting with a variety of action items. One is to score
their business plan. The reasons we require this step is to ensure
the client has included all the information an investor expects to
see and to minimize the number of times our staff must read the
plan. In most cases, new clients must rework their plans to reduce
the length, strengthen the financials, and clarify why their
opportunity is uniquely superior to the competition.
Another action item is to develop a "stand up" presentation
supported with visual aids, preferably a computer-based "power
point" presentation. The initial challenge is limiting the
presentation to a maximum of 20 minutes.
Investors know what critical information they want to hear. They
want to be informed but not educated on the product, market or
industry. Investors want the entrepreneur to sell them on why the
business venture is a good investment opportunity. One of the most
common mistakes entrepreneurs make is spending their valuable time
selling their product in lieu of selling the business opportunity.
When the entrepreneur is prepared to make a presentation, the
client schedules a dress rehearsal before Tech Center staff. …