By Robert Lehmann, Executive Consultant
Two years’ worth of COVID-related pressures on the workplace have prompted thousands of business leaders with entrepreneurial spirits to decide now is the time to start up their own ventures. Even amid new uncertainties including inflation, the risk of a recession and intensifying geopolitical conflicts, they can turn their dreams into businesses backed by investors.
If you’re such an individual—or helping one—the key here is to take an orderly approach, tap a trusted advisor and understand the differences between how an entrepreneur looks at an idea and how investors will look at it. Here are three helpful steps to clarify and unify these differences before reaching out to prospects:
VISION: Why is this a good idea? It's not unusual that visionaries are looking so far down the road they fail to see the details and variables required for approaching potential investors. A well-thought-out plan will lay out the market opportunity, necessary talent, legal structure and implementation schedule. Like the TV program "Shark Tank," Platinum Group helps by asking tough questions likely to be raised by investors. The final business plan must communicate your vision in the context of the key areas that a funding source wants to understand.
VALUE: What is this good idea worth? Most start-up leaders think their companies are worth millions if not billions. However, without a proven revenue stream, it's important to think more realistically. Platinum's experience with hundreds of companies can help to assess the potential value based in part on the visionary's experience, strengths and weaknesses. There are many variables to consider, such as how much equity is desirable and how much control the visionary may need to give up in terms of ownership.
INVESTORS: How many are needed and what is a good investment for this idea? Once prepared with how to present vision and value, entrepreneurs are ready to tell their stories to potential investors in the most efficient manner. Keep in mind that the entrepreneur typically thinks that the most important thing is the idea; but for the investor, it's the money. Both have value. It's important to match up the two personalities. Some investors are more hands-off, team-oriented, while others are more hands on and controlling. Especially when in a start-up or early-stage phase, find an investor who can contribute more than cash to pay attention to your plan and be involved. Maybe it's a monthly meeting, board position or debt that becomes equity; there's a lot to learn from an investor.
Platinum's 40 years of experience helping business owners realize their dreams has resulted in a proven process to help entrepreneurs transform good ideas into great investment opportunities. We can help an entrepreneur better understand the market he or she is entering, further identify the team needed to take this idea to the market, develop a solid financial plan with which to move forward, and provide the support services needed to achieve the business’s goals. We even have our own, nicer version of "Shark Tank” called Platinum Ventures Forum, where entrepreneurs present in front of a panel of Platinum Group experts to gain understanding and clarity around how to take their ideas to the next level.
For more information or to run a question or idea by us, contact Bob Lehmann at robertlehmann@theplatinumgrp.com or call 952-829-5700.