Investors are looking for a solid framework of how your company will grow and succeed, and they want to understand all of the assumptions underpinning that framework. It’s called The 1-10-100 Process, and it meets all the same criteria as a five-year projection, without the arbitrary time variable.
You’ve maybe heard the terms “dumb money” and “smart money.” If this is your first rodeo, “dumb money” refers to capital from investors who provide nothing but the cash, ie. they have no experience or connections in your industry, while “smart money” comes from investors who can offer you their rolodex and years of experience in addition to their funds.
Unfortunately, smart money is by and large a myth.
There are several reasons why business owners are afraid of asking questions. I’ll tell you right now, all of them suck. But here they are:
* They’ll get answers they don’t want.
* They should already know the answer.
* They’ll frustrate the other party by asking.
Your goal in this first meeting is not to have your counterparts think “dang, we have to acquire them right now” but “wow, this is a really thoughtful person who I can see working with on a regular basis.” The barrier to the former is insane. The bar for the latter is simply being yourself and taking the occasional breath so that the other person has an opportunity to speak.