VC Money with the 12 Steps to Get It and 21st Management

By Deaver Brown

VC Money defines the 12 things VCs need to know to invest; 21St Century Management brings you up to date for your investors to know & you to do. 

VC Money defines the 12 things VCs need to know to invest; 21St Century Management brings you up to date for your investors to know & you to do. 

• Language: English
• Publisher: Nil
• Release date: Jul 16, 2023
• ISBN: 9781614964568

Book preview

VC Money

12 Steps to Get It!

Chapters

01. Introduction

Start with what they need.

02. What are VCs Looking for?

Their core 12 questions

03. Question 1: Is Your Market Big Enough for Them?

$1B or more is probably the floor, with a strong growth factor

04. Question 2: What can you do uniquely well in your market?

Why you?

05. Question 3: What pain points or problems do you solve?

Do your customers love you?

06. Question 4: How can you create and sustain barriers to entry?

If you have a VC engaged now, you are on the downward slope.

07. Question 5: Can you hold off the low cost producers and the smart guys?

Low costs win.

08. Question 6: How do you make money?

Show us the way to the money!

09. Question 7: Can you pump out your product or service?

Can you deliver?

10. Question 8: Can we invest in these people?

VCs like realistic optimists

11. Question 9: Do they clearly understand your product or service?

Be clear & Be sure they do

12. Question 10: What has your company done so far?

What have you accomplished

13. Question 11: How much money do you really need?

How do you get all the way across the river?

14. Question 12., the Last One: Exit with an IPO if You Can

Delivering the bacon!

15. Summary

Make it work for them & it will work for you!

01. Introduction

Start with what they need.

VC Money is focused on getting your presentation and company in alignment with their requirements. Their standards are high but the payoff for you is higher by being properly funded, guided by trusted advisors, introduced to key firms and people to build your company, and having experts at liquefying your exit through an IPO, corporate bolt on, or creating a lasting stand-alone company.

The rise in the importance of the financial and tech sectors has led business schools to focus more and more on creating financial analysts and tech team builders than the long standing tradition of developing business practitioners.

Harvard Business School, for example, now proudly teaches their new 5 I program of general concepts: Innovation, intellectual ambition, internationalization, inclusion, and integration versus teaching the traditional business tool kit of sales, marketing, operations, and finance.

VC’s are staffed with these graduates so be aware of this educational trend when presenting your deal. The 5 I’s, financial analysis, and team building must be addressed successfully or you will not get their money.

The VC industry has evolved from simply funding prospective growth companies to focused approaches of funding large R & D projects in the Internet, tech and medical areas primarily or launching innovative stand alone companies in these sectors to liquefy their investments on a huge scale through large IPOs or acquisitions by major firms in their market place such as Amazon, Cisco, or Merck.

What does this trend and focus mean for you?

You must position your deal in their sweet spot or not get their money. You do have alternatives such as corporate investments into a category they are in, angels interested in attractive deals VCs don’t want to do, or locally based investment groups focused on promoting local businesses.

My first three VC deals would now be angel funded because the markets were not in current preferred VC sectors and angel funding was not widespread in the 1970s and 1980s.

My first two VC investments would have benefitted substantially from focusing on the exit position from day one. We would have been far better off to have had a corporate sale scoped out early rather than focus so intently on creating stand alone businesses.

The Umbroller stroller company ultimately got sold to Rubbermaid Newell; but we missed the earlier richer opportunity to sell to Fisher Price, with their perfect brand name and organization for our company.

In the second instance, we tried to create a stand alone company in General Sound but would have done far better to focus on developing the technology and selling it off as we eventually did.

The third was a home run, perhaps a grand slam, with American Power Conversion, APCC, but we couldn’t get a VC to bankroll us and made it to an IPO without one. We used a hybrid approach with a limited partnership royalty agreement for just $525,000 which let the company make it to an IPO.

Why the struggle?

Fundamentally these companies were not focused on the exit position from the beginning and did not have the need for the substantial investment the top tier VCs wanted to make for the payoff they required nor did we do an adequate job of giving them what they wanted in our presentations so we could get what we wanted.

Each deal was about $500,000, nowhere near the $3 to $5 million floor of those days. So, we got third world VCs as I call them for our businesses who were not much more skilled than we were in the financial markets. Each did well