One burning question in the mind of the capital seeker, since the dawn of time has been, how long does it really take to get a funding done? Now, in my 25 years, being on both sides of the fence as a capital provider and also as a capital seeker, I could tell you ultimately, plan on about six months. It could take longer, rarely does it take shorter.
Now, there are eight key steps in the process and being aware of those will help you understand the process and the time.
The first thing that happens, typically, is a review of the business and an evaluation of your financials. This is the point where the capital provider is making a decision on whether they want to interview you and take some further time up for consideration.
Number two, there's going to be a meeting and a presentation. Typically this one is going to be done in person and it is what we call a "dog and pony show." It is where you present your company and parade the merits of it in front of the capital provider. The capital seeker then will find themselves in a due diligence period. Now, this cuts both ways. They're doing due diligence on the capital seeker, our investors want to know, are all the facts there? Is everything in line? Do a little homework, check some facts. You should be doing the same thing as a capital seeker while they are doing there's, know who you are dealing with.
Number four, there is going to be a series of follow up questions, ultimately. You need to be prepared to answer those.
Number five comes; finally a term sheet. This is a first take, or draft, at a letter of intent to provide the funding and it will spell out: what are the terms of the funding, what type of funding equity get, what have you.
And number six, what always follows a term sheet is a negotiation. Because you never, as a capital seeker, want to take the first deal that's put on the table.
Number seven is, after negotiations conclude, typically there is a formal agreement.
And number eight is the closing. So, there are a lot of steps that you go through on the way to being funded. Being aware of those will help you to understand the time that is involved with that.

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I'm often asked, should I go it alone when it comes to funding, or should I seek the assistance of a professional? I think the best way to answer that is ask yourself a couple of questions. I've got four in particular that you need to keep in mind.
First of all, you have limited contact. You're probably great at the business that you are engaged in, but you do not want to call your friend the lawyer, or your buddy the accountant, and see who they know who raises money for your company.
Number two, you are probably strapped for time if you're running a business, and let's face it, time is a precious resource, treat it like one.
Number three, you've got to ask yourself, do you have the experience? And if you haven't been down the road of funding a company before while running it, you probably want to seek the advise of a pro.
Lastly, you want to keep in mind this one, raising capital is a two headed monster. You've got to ask yourself the question, am I capable of running this company effectively and efficiently while raising capital?
I typically recommend help. Now, you get back to the business of running your business, and leave it to the people like Capital Match Point. We have been doing this a long time. We are here to help capital seekers like yourselves, and we are happy to take your phone call at any time and help you decide whether you should go it alone, or get some assistance.

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Capital seekers at all stages need to understand: what stage they are really at, how to classify and clarify for our investors, and how to speak the language a little bit. So I want to tell you about business stages that we classify and use in our matching process in the Capital Match Point system.
First, you have the light-bulb stage. And, as a reference suggests, this is just an idea, a great idea. It could be as crude as scratched on the back of a napkin, but it has some merit to it.
Number two is where you have seed stage. Seed is where you are structuring and developing the business plan and the financials, and there is some capital expenditures going on there.
Three, there is a start-up, and a start-up is usually broken into a series. Series A, typically, a lot of times you'll see a series B when milestones are reached. Occasionally you'll see a series C and even a series D.
Number Four is early stage. Generally an early stage company is considered to be generating revenue and probably within about a million dollars, plus or minus, break even.
And number 5 is late stage company's. These company's are typically established, and mature, and looking for expansion capital.
Six, we've got a category called special situations. This is a pretty broad category, but it encompasses things like: leverage buyout propositions, mergers and acquisitions, anything at all that would enhance the company's business model, beef up the balance sheet, and add assets as well.
Now, if you are a capital seeker and you are not sure what category you fit into exactly, give us a call at the Capital Match Point. That is what we're here for. We look at companies all the time and we'd be glad to help you sort this out. It's important to know which stage you're in, so that we could target you to the correct capital provider.

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What is going on inside the mind of the investor? Every capital seeker needs to answer that question and I've got a couple of key points to make on that subject.
First of all, you want to realize that as an investor, especially on the professional level, you're listening to stories for several times a day, several days a week, several weeks out of the month, months turn into years, you do the math. It's an awful lot of presentations. So we're looking for sisync answers to the questions we're asking, as opposed to stories.
Secondly, we're looking for specific things and in fact the questions are generally formatted in a very pointed way to get those answers out.
So, thirdly, you wanna be on guard not to oversell your opportunity your company or your companies merits. Answer the question, don't tell a story.
And fourth, when you're asked a question, you need to be prepared to answer it. So, go over questions in advance, have a presentation, organize in your mind, and expect that question to come up.
An investor, overall, really is just trying to answer this simple question, "What happens if I put one dollar in the front end of this company? What do I expect to see come out the back?" And capital seekers that keep that in mind really will know what's going on inside the investors head.
And those that have questions about the nature of what's going on inside the investors head, and how to speak to them, are always welcome to give us a call at Capital MatchPoint. That's what we do and we'll be glad to help.

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I get a lot of questions from capital seekers about the type of money that is available on the Capital Match Point. I have several categories, and we classify them and categorize them for a reason. There are angel investors and angel investor groups. There are venture capital funds, commonly referred to as "VC's". We also have private equity funding sources. Then there are hedge funds; additionally private investors. Then we have a category called "other", which pretty much encompasses all other accredited investors, that would be investors of significant net worth and sophistication to make investments on their own. Now, what is important here, as a capital seeker you need to understand the differences between capital providers. They're very specific. And secondly, you need to be able to identify the source that you need to target for your particular capital needs. Now, getting in front of the right capital provider is paramount to getting your company funded. So, what we're looking for here is, the key is efficiencies. Don't waste time chasing the wrong kind of money, and don't waste money doing that either. The thing you need to be doing is running your business. So, take the most efficient route to capital. If there are any questions on this subject I always invite the capital seekers to call. That is what we do on a daily basis here at Capital Match Point, and we can easily help you identify the type of capital sources that would be most efficient for you to use.

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You know, in talking to capital seekers, inevitably, I mention this three-minute review that a capital provider will do, and there's a lot of, what I call "eye catchers" that happen during that process. And these are the things-- I'll give you ten items that jump out and really make an impression.
One, patents and trademarks. Hey, if you've got something that has a patent or a trademark on it, chances are it's worth taking an extra look at.
Second item, capital invested person. What we like to call "skin in the game." Want to see that management has a financial commitment to the concept or idea before they come looking for money from us.
The third thing is the management themselves. We're looking for executive gems, big names, experienced big companies, big achievements.
Ok, #4 would be milestones achieved by the company so far. If they set out in their business plan to hit goals, I'd like to see some of that in a pattern developing.
Six, a growing market demand. This one's pretty obvious. You don't want a shrinking market. If you could have got in on the Internet, for example, when there were just a couple professors talking to each other, that's a growing market. You see where you'd end up.
Marketing strategies. I like to see innovation in marketing, not just, "We're going to hire a Madison Avenue advertising firm to do a few commercials and sell our product."
Revenue growth year over year. That's one of my favorites. I like to look and see a pattern, particularly one that's on the up-swing.
Now, strategic partnerships are important. That's my #9 gem, and I like to see that there are businesses that want to do business with your business.
And intellectual property is the tenth gem. Intellectual property is always worth taking a look at. A little esoteric sometimes, but valuable, and it is an asset that you're going to see on the balance sheets, so you're going to want to know what that's about.
That's my ten gems. If you've got some questions about what looks good in your presentation, I always welcome capital seekers to give us a call at Capital Match Point, because this is what we do and this is why we're here!

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If I were asked to describe the Capital Match Point, I would have to say that it is a boutique community in which capital seekers are able to meet directly with our investors, [who] are interested in providing capital to their specific type of company.

Now, the capital seekers are treated with hands on care. They do not just up load their data and deposit it there. We actually take the time to review the data with our capital seekers. It is part of our [Capital] Match Point mentor program. We know ultimately what our investors expect to see. The goal is to present a clear and concise picture of your company, and to do so with the perspective of our investors in mind.

It is our job to make sure that your company is reflected in the best possible light.

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Capital seekers are often asking me how it is that we derive the criteria that we are asking for them to provide on their data sheets. I’ll tell you, it goes back about 25 years for me in the business. There is something that we call the three-minute review. And this is a situation, if you can picture, capital providers are sitting there looking at deal after deal after deal. Eventually, you develop a strategy. You’re looking for key points in a business plan to decide if it’s going in the trash or if it’s going in the pile to take another look at later. And here’s how it works.
Basically, and not in this particular order, but we’re looking at these things. The number or amount of money needed. One of the primary concerns. Can we provide that amount of money? Is it within our pervue? Is that the amount we typically invest in?
Secondly, what stage is the company in? A lot of companies, right now especially in this economy, are taking preference if they are in a later stage versus a start-up, although there are plenty of good ideas getting funded out there.
The industry, very, very important. There are shifts in the industry from time to time. High tech may be in favor at one point, medical may be in favor at another point, and you may find right now that just plain bread and butter industries, like consumer products and manufacturing, are in favor. And look at the business description as well. What’s this business about in general? Then, I’m looking at the company background. Where did this concept come from? How is it developed? How did it end up in the space that they’re in?
Probably one of the most important things, and I think Ken Honeyman would agree with me, and Mark Bass, as well the management team, I can’t tell you how many of our investors go straight to the management team once they've determine what business they’re looking at.
Now, the product or service that you're providing is another key factor. Then, we look at the market data that goes with that. And remember, these are quick looks, so we’re scanning this. Technology and the viability of that technology, have we been hearing about this technology? Is it a buzz word? Is it something we see a lot of coming into the office on the horizon?
Next, we’re gonna look at competition. Remember, there’s always competition. If there’s not, there will be.
And finally, we’re looking at commercialization, and that’s the question of how are you gonna monetize this concept and turn it into a business and generate profits?
And that’s a three-minute review. Those are the fields of data that you’re going want to fill out and be ready to answer to. But that’s how typically an investor’s looking at your deal. So, be aware. Now you know what’s going on inside the investor's mind when he’s looking at your data.

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I’m frequently asked this question from our entrepreneurs, “How do I raise capital given this economy?” And it’s a good question. There’s a lot of anxiety surrounding it, so I think you want to be aware that it’s true. IPOs were down 85% through the years 2007 and 2008. And now, in 2009, it appears that the well has dried up completely. But don’t despair. There are options. Even though the banks have pretty much cut back their lending, and investment bankers are sitting on the sidelines, there will always be entrepreneurs. And in fact, there are more entrepreneurs created in times of economic crisis than usual.
I'll give you a perfect example. Top-level executive loses his job. Highly skilled position. Got some savings. He’s got a great idea, and he’s always wanted to be in business for himself. There, you’ve got an entrepreneur being born. On the other side of the coin, there’s always investors. There are professional investors that run just like any other company, and they are in the business of providing capital.
Now, the disconnect is occurring in the deal flow. So, how do you access the deal flow as an investor? And as an entrepreneur or a capital seeker, how do you get in front of the investor directly? Well, if you don’t have a strategy, it’s like shooting an elephant with a BB gun. You’re gonna have a tough time. What you need to do is develop a strategy. You need to be able to package and provide your deal criteria and capital requirements, convey those to a targeted audience of capital providers, and one of the ways that you can do that really efficiently now is through a capital network website. Capital Match Point is a perfect example.
One of the benefits in going that route is that you’ve got a captive audience of investors that are professional investors. They are interested in your industry, your stage of business where ever it might be: start-up, early stage, later stage. And they’ve got the capital level that you’re looking for.
One other secret here: cut out the middle man. You don’t want to be working through a broker in times like this. Everybody is looking to save money and cut costs. So, remember, capital is always going to have a cost associated with it. What I recommend to all entrepreneurs and capital seekers alike, at any stage, be efficient with your capital costs, take the most direct route to funding you can.

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Most of our capital seekers are going to find themselves in a position to make a verbal presentation or "pitch" to our investors. Now, I get a lot of questions as to what is the most effective way to communicate their message and sell their company to the investor and I've come up with three points in particular that I tell all capital seekers to pay attention to. First, you want to pick your most skilled communicator in the group. Typically most capital seekers have a board or several partners and one of them is a better communicator or better speaker than the others. It doesn't neccesarily have to be the majority holder of the company or the guy that came up with the idea, get the guy that's the best communicator and put him in front. Second, put yourself in the investor's mindset before you deliver your presentation. Ask yourself, "what is he thinking?"and try to tailor the answers to the investor's mindset. And third, and this is my favorite, I want you to deliver the answer to the questions you receive in thirty seconds plus or minus. And there's a reason for this, please pay careful attention to it. You don't want to invite conversations or really open the door to topics that are not pertinent to the question that was asked. And I invite capital seekers that are trying to
strategize their presentation and have questions about it to give us a call at the Capital MatchPoint, that's what we're her for. We'll put our skills to work for you and give you a few tips in that area if you need them.

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