You know you need to write a business plan, so let's talk about actually writing it. Here are the guts of a great business plan. I've got ten points here that I'd really like you to follow and pay close attention to.
Number one, decide why you're writing the plan. Are you raising money? Probably. Are you clarifying your future? Certainly. Launching a new venture? Figure it out quickly.
Number two, get the big picture. Prepare an outline then visit The Capital Match Points online resource library. There's over 750 sites dedicated to this alone.
Number three, grab everything that's already handy. Consider marketing pieces, press releases, anything that you think is important. Websites, notes that you've accumulated over time.
Number four, this is so important, just start. Start typing thoughts, ideas, questions, words, and to-dos in each section of your business plan and place your thoughts in the most appropriate section.
Number five, prepare a rough draft. Take your brainstormed ideas and shape them into a useable draft.
Six, hey, now it's research time. Compile information and research to support your claims and assertions.
Number seven, start thinking about your numbers. Very important. At this point, you can make assumptions and develop a form of financial statement. If you start any sooner your numbers will be fantasy.
Number eight, write a final draft and finish the numbers. If one of our investors sees an error, you lose credibility almost instantly. Double and triple your writing for grammatical and spelling errors and certainly your financials, please.
Number nine, set a deadline. Set a deadline you can't ignore.
Number ten, finally, polish your plan to perfection. Get critical comments from readers. Not your husband, wife, business partner, significant other. Go to the source. Lastly, prepare an executive summary that encapsulates the highlights of your entire plan and places it up front. Congratulations, you're now the proud owner of an excellent business plan.
We welcome questions from our entrepreneur and capital seekers when they're writing their business plans. Call us at the Capital Match Point, because ultimately, we're interested in funding your successes.

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You've asked me about the best way to pitch a potential investor, and that's a great question. At the Capital Match Point, we've distilled our best advice in what we call the winning pitch. There are ten components to this, and I'll go through each one of them. Pay attention!
Target the pitch, number one. Capital Match Point actually takes the guess work out of that equation because the person who has interest is the person who talks to the capital seeker.
Number two. This is simple: be on time. Or better yet, be early. Capital sources usually have a hard stop. They only have so much time for anybody.
Number three, don't overwhelm the money provider. The goal at the first meeting is not to get all the money at the first time. Don't try to cram six or seven meetings into one meeting. Peak their curiosity but don't abuse their attention span.
Number four, I have to say to know your audience. Try and find out in advance who is going to be at the meeting and spend some time learning about them at their site and find out who's actually going to be in that room when you're there.
Number five, get to the point fast, and I mean really fast. Funding sources sit through presentation after presentation. That's their livelihood. So, it's easy for them to lose interest if a presentation doesn't get to that point quickly. Here's a little bit secret sauce. To get their attention, answer this: what problem is my company solving? Tell them up front. They'll listen. Trust me, they'll listen.
Six, use analogies. Use bold ideas to present new concepts. Draw an analogy from an unrelated product. For instance, TIVO for the Web, podcasting for cell phones, or eBay meets CNN.
Number seven, power points. Power points: over kill or over fill? How many slides to get the message out? My answer is the baker's dozen. You know, five minutes per slide makes the case. By the way, don't read it to them. They can read it for themselves. Tell them your story.
Number eight, know what you don't know and admit it. This is very critical. Our investors don't expect entrepreneurs to know everything. So, be upfront about it if you make a mistake. If you don't know the answer, do three things. One, admit it. Two, make a note of that question and after the meeting, follow up, find out, and get back to that person. Do not, and I repeat, do not fake it with an evasive, oblique, or indirect attempt at an answer. Our investors want to know that they can trust the entrepreneur.
Number nine, competition. Know who they are and what not to tell the capital provider. What not to tell them. Don't ever say the dreaded words, "We have no competition." That's a death warrant. Capital providers know that it's rare for any company to have no competition whatsoever. They'll know that you haven't done enough homework on your deal, and the company is going to be sort of lacking, and it's probably not worth backing either.
And number ten, control the meeting. Don't spend too much time on a particular point or line of questioning. Politely but firmly move on, follow up, and set a meeting to satisfy their concerns.
So, we welcome questions from entrepreneur when they're preparing to pitch our investors. They can us at call The Capital Match Point because ultimately we want to have your deal funded, and have success with our investors.

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We've been talking about entrepreneurs so far and what their needs and realities are, and what I'd like to do is talk a little bit about the other side: investors and what their perception is, particularly when it relates to management teams, and how important is the management team? And that's a great question. And if you think investors only invest in great deals and leave everything else on the sidelines, well, think again. The management team is probably one of the most important components of the deal. The team is going to figure very prominently in any investors decision to fund the company especially if the track record is thin. The history of the management team may be the only solid, understandable piece of information available to the potential investor.
You know, businesses must be able to succeed in the face of a lot of different challenges and rapidly changing conditions. Experience gives the potential investor comfort that the management team can spot issues and challenges and are flexible and skilled enough to deal with those as things develop.
Integrity and commitment are also a part of that. Investors want to see a high level of work ethic on the part of management and certainly to see that they have enough skin in the game.
Charisma in a management team is great, but too much can get in the way. Our investors want key players to have egos that are big enough to get the job done but not so big that the individual can't be a team player and can't accept advise, and this is a real sticky point with a lot of smaller companies. If our investors suspect that management is too arrogant or egocentric to accept advice, prospects of the investment being made are going to be very minimal.
In a nutshell, potential investors want to know that they can trust the management team with their money. They want to feel secure with the upcoming success and that their interest will be protected.
We welcome questions from entrepreneurs when they're preparing to pitch our investors. They can call The Capital Match Point, because ultimately we're interested in funding successes with our investors.

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That's a wonderful question: what about the veracity of our investment team? When a company need our investors, we want them to be ready. And you might say, "For what?" Do your homework on them just as they do homework on you. Due diligence really is a two way street. If you only think it's a one way street when you talk to a capital provider, I'd like you to examine how you can evaluate the funding source themselves. At the same time your business plan is under a microscope, you should be assessing the prospective funding source's strengths and weaknesses.
Consider the following questions I'm about to put out here as to whether the capital firm fits into your current or projected requirements. How well does the firm know your industry? How often does it work with companies that are in a development stage similar to yours? What assistance can the investor bring to you in terms of management expertise, industry contacts, or support services? What's the reputation of the firm in the investment community? If the firm is going to serve as the lead investor, then how effective will they be in helping to attract additional co-investors? Has the firm asked for any special reward or compensation for serving as a lead investor? What effect this will have on the willingness of other co-investors to participate? That's important.
I think one of the biggest things is, will this firm be able to participate in later rounds of financing if the company continues to grow and needs additional capital? To answer these questions, you speak with the owners and managers of other companies in the investor's portfolio. Determine their level of support, conflict, communication. Be sure you talk to both successful and unsuccessful portfolio companies.
Remember, this is not a me against the world scenario. You deserve to know who you're getting involved with too. We welcome questions from entrepreneurs when they're preparing to engage our investors. They can call us at the Capital Match Point because ultimately we're interested in funding success with our investors.

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So, you found an investor. Let's talk about actually structuring and negotiating the deal. The fun really is just starting. Now comes the negotiating and the harrowing process of really doing the deal and making everyone happy. The need to strike a balance between investment and investment acceptance is critical. Keep a few things in mind as we go down this path. There's the company's concerns and the investor's concerns that really need to be pointed out here.
As far as the company is concerned there's going to be loss of management control, dilution of personal stock, repurchase of personal stock in the event of employment termination. How about adequate financing? Security interests being taken, key assets of the company. Future capital requirements and dilution of the founder's ownership. Intangible and tangible indirect benefits of our investor's participation, such as access to key industry contacts and future rounds of capital.
Our investors' main concerns. Let's talk about some of theirs. Well, the company's current and projected evaluation is a concern of theirs. Their level of risk. Projected levels on return of investment. Liquidity. Protection of the firm's ability to participate in future rounds of funding. Influence and control over management strategy and decision making. Registration rights in the event of a public offering and rights to first refusal to provide future financing.
And for both parties, how about retention of key members of the management team. A resolution of conflicts, financial strength of the company post investment, and certainly tax ramifications of the proposed investment.
Negotiations have to have ample time to be studied. Legal advice is first and foremost, and I beg you to get great quality securities attorney's working for you. Don't be foolish and try to negotiate this alone. Legal fees are meant to be spent here where it counts for the future of the company.

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What a fantastic question: how to get your deal in front of the investor and what not to do. Everybody always talks to you about what to do and so forth. But I'm going to talk to you about what not to do from an investor's standpoint.
There are nine items I'd like to take care of at this point.
Number one, an inadequate team. I believe a quality team is probably the single most important factor in looking at a young company. So, surround yourself with people smarter than you.
Number two, is the company crowded or in a noisy market space? Markets have a lot of players are difficult even if the innovation is head and shoulders above the rest. If it's a consumer market, you'll have trouble getting your message to stand out in this economic environment.
Entrepreneur naivete. This ranges from plans that had no real plan from going to market. Their thoughts were just announced, and the customers will come. Unrealistic expectations with no real through put.
Four, plans with no concise explanation. It drives us crazy. A plan gets about 30 seconds to catch my attention or the investors attention. If the first few sentences aren't compelling for me to keep reading, I won't.
Five, plans that require too much total money. Angeles typically don't want to be the first quarter million dollars into a deal that's gonna take $10- or $20-million to achieve a profit.
Evaluation. We've covered a lot about evaluation before, but what we often ignore is absurd evaluations. Early in our discussion of a company, a plan will fail if it's ten times what it ought to be.
Seven, lack of barriers to entry to intellectual property. A star team can sell a plan that's really based on execution. But ordinary mortals like us have to show that they can keep others out of that space.
Eight, problematic deals. Plans that don't fit the angels/VC mold of plans with unusual deal structures, the investors will tell you how they want to invest, typically.
And finally, don't use a broker. Investors don't like paying brokers. They'd rather have the money going into the company, and too many of the brokers and companies at this stage are not properly licensed which casts a real pall on the whole transaction.
So, prepare yourself to navigate the capital or raising minefield with some common sense and the help of professionals you'll find at The Capital Match Point.

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When a capital source really says no, what does that mean. Let's learn something from this. I tell the entrepreneur, you've had a number of face to face meetings with funding sources, and they turned the deal down, and that's tough. Let's debrief a little bit about what's happened and what they probably told you. Let me give you an insiders look and decipher what they've said to the entrepreneur when he gets turned down. Hey, we've all been turned down by financing before, and I think it's instructive to know, but more valuable as a learning tool when these standard push backs occur. They're telling you something, so let's be prepared. I think it's time to read the lines between the standard phrases they get back to you on.
They say, "I liked your company, but my partners didn't." In other words, no. if this person truly believed in the project, he'd vouch for you and get this thing going.
If they say, "If you get funding or a lead investor, we'll follow." And what that really means is, once your first round of financing is completed by someone else, we'd be happy to give you more, but let someone else take the risk.
They say, "Show us some more traction, and we'll invest." What that really means is, I don't want to say no, because you may land a large customer in the interim. But right now, I just don't believe in it.
They say, "We'd love to co-invest with other VC's or other angels." What it really means is, if your deal was worthy of a VC, they'd want it all for themselves.
When they say, "We love early stage investing." What that probably means is a VC's dream is to put one to two million dollars in a pre-money company and winding up owning 33% of the next Google. VC's aren't that risky. They only want to invest in proven teams with proven technology in a proven market.
So, there you have it. We've heard it all before. These are typical responses when they say no. So, be prepared to hear any of these and take it with a grain of salt. There's always an investor to fund any deal. We just don't want a capital seeker to shut down after the first one or two turn downs. We can help re-purpose the deal and adjust it and turn that "no" into a "yes."
We welcome questions from entrepreneurs after they engage our investors. We're here to aid the entrepreneur and get the capital they deserve. So, let's make this as easy as possible. Call us at the Capital Match Point, because ultimately, we're interested in funding successes with our investors.

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When in front of a potential investor, the question is, how does an entrepreneur establish credibility?
What the capital seekers say to our investors may make or break their funding. I think the easiest way to understand of what to tell these people is really what not to tell them. And over 30 years of hearing these phrases or some semblance of them have driven me and capital providers to see caution flags that instantly appear. Keep these phrases out of the conversation.
Don't tell me our projections are conservative. Entrepreneur projections are never conservative. If they were, they'd be zero. Or, "the market will be $50-billion in 2010." The magnitude is just not logical in this economic environment.
Here's another nugget we hear. "HugeCo is going to sign our purchase order next week." This line is trying to show the capital provider there is some attraction beneath their heel. Ultimately, nine times out of ten, the purchase order won't be signed until the next week or the week after or the next year if ever.
Employees. That's a favorite turn-off. "Key employees are set to join us as soon as we get funded." Well, my question is, why would an executive leave a $250,000 a year job to join a start up? That's not going to happen in this economy.
Here's another one to close the door behind you quickly. "No one else is doing what we're doing." Either there isn't a market or you're incapable of finding your competition on the web. Or, "We have a proven management team." Just because your bio says you have a proven team means nothing to us.
Surround yourself with reputable directors and advisors and step aside when necessary.
And, "Patents make our product offensable." Mentioning patents should be talked about one time in the presentation and that's it. Saying you have a deed filed for patents for what you're doing is enough. Filing back up patents is a defense of a hole through your presentation.
And the best of the best is, "Hurry, because several other funding sources are interested." Creating a sense of scarcity is stupid. There are very few people who actually have multiple firms chasing them in this economic climate.
We've heard them all before, and no one want's to hear them again. So, beware as you leave these words for the wise. Prepare. Resist the temptation to repeat any of these nuggets. We can help you prepare your presentation at the Capital Match Point and be professional while you're at it. Visit us, call us, we'll help turn your "no" into a "yes."

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I think it's instructive to answer your question by trying to get in the investor's head and find out how much an entrepreneur really needs to raise, and I want to talk about the actual amount of capital that's considered being raised and what our investors really look for.
First of all, the amount of money being raised is a pretty good indicator of how much the entrepreneur thinks the company is really worth. The thing I find most interesting is how the company arrived at that number. What our funding sources want to know is where they're going to spend the money. Can they do it for less? What would they do if they had more money?
Secondly, the question is, I think the right question is, how much money should be raised? The right amount of money to bring into a company is enough to reach sufficient milestones, if they raise more money to a higher price at a future date. If all goes well, the money invested will be used to drive all sorts of risks out of the business. Will it be used to take the company to cash flow positive? Will it be used to pay down debt? If they don't know exactly what they're capital needs are or they raise too much money early on, they could be selling off too much of the company for too little capital.
Third, if too little money is raised, the company may run out before the business is proven enough sufficiently to raise additional capital. In other words, raising too little money can be fatal.
Fourth, companies should leverage early stage venture money to drive up the value of the company, so the next time the company fund raises. they'll be able to bring in larger amounts of money while suffering smaller amounts of dilution, which is very important for management teams.
Unfortunately, the perfect amount of money to be raised is not always obvious, and the question of why is the company raising the amount of money it's raising is really important. So, when the entrepreneur is going out to raise money, they have to be prepared to know the answer to how much they're hoping to raise and why.
We welcome questions from our investors and entrepreneur when they're preparing to engage. They can call us at the Capital Match Point because ultimately we're interested in funding successes with our investors.

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You know, by virtue of my position at the Capital Match Point, I have the opportunity to talk to entrepreneurs on almost a daily basis. Entrepreneurs that are seeking capital and in various stages of finding it. And one topic that our conversation almost always gravitates towards is what is your company worth? And after we talk for a few minutes. the answer usually comes back as something vague or maybe just simply, "I don't know." And one thing that I can't stress enough is that you, the entrepreneur, regardless of what the investor is doing because they're going to form their own opinion of what your company's worth, but you, the entrepreneur who's seeking funding have a very fact based, analytical opinion of what your company's worth.
Now, valuation and middling is as much art as it is science, and everybody has their own way of doing it. This investor will think that something's important, and this investor will think something else is important. So, what I generally recommend is that you take at least three methods of valuation and look for convergence around a number. And chances are, if you get convergence around a number, you're on the right track. Now, whether you like that number or not, I don't know. But it means that you are on the right track. And again, there are a lot of different methods of doing valuation, but three that I would recommend, because they are widely used and all of our investors will understand them, is the price-to-earnings ratio, the price-to-sales ratio, and the discounted value price of the cash flows.
Now, the price-to-earnings ratio will require you to go out and do some research on publicly traded companies in your market space. Find out what kind of price-to-earnings ratio they're trading at compared to your company and what you think the appetite the market will have at your time of exit and make your valuation accordingly.
Price to sales is done very similarly, except that, instead of earning-- the price of your stocks to earnings, use the ratio of the price of your stock to sales. This method is used a lot in mature industries that don't yet have a clear path to profit but in industries that do have revenue. It's almost a surrogate way that the market uses to assign value to a company.
In the discounted cash flow method, what you need to do is make some projections about your company's cash flow out into the future. Five years if you can; three years minimum. Discount those cash flows back to the present, sum it together, and arrive at a value of your company.
Again, your opinion and the investor's opinion are going to be different. That's ok. But you need to be armed with something to negotiate with. Or, if you'd like some help in establishing a value of your company, get in touch with us at the Capital Match Point. We're here to help, and we're here to maximize our client's chances of getting funded.

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