The Four Things an Investor Wanted...

My MBA team got the opportunity to present our business plan to a panel of venture capitalists yesterday...sort of the culmination of our program. One of the tougher panelists kept repeating the four critical things he wanted to see from all entrepreneurs. Mind you, this guy sees 20 business plans per week asking him for money, he is a multi-millionaire (if not billionaire!) and I thought his criteria for potentially giving people large sums of money was interesting.

Passion - he stated he wanted to see that ll of the participants were genuinely passionate about what they were doing. Not hard for us in that category, wouldn't you agree? Some of the most deeply passionate people I know are Chiropractors and their love for what they do is amazing.

Competency - he also wanted a team of people that held core competencies in certain areas. Marketing, finance, sales, customer service, etc. Having a team of people around you that are fundamentally competent in these areas are deeply critical. Do you know how to interpret the financial statements and pro formas of your business plan? The panelists all agreed that the most important financial statement they looked at was the cash flow statement. In other words, the asset most needed to keep your business a going concern. See here for a past blog to help you better understand these.

Trust - he wanted to be able to trust us and see that we trusted each other. That if somebody challenged us with a difficult question, the entire team would have our back if we were a bit perplexed. Patrick Lencioni wrote a great book called The Five Dysfunctions of a Team that I highly recommend for the fledgling entrepreneur. It discusses how to build a great team, with trust being the most important foundation of the enterprise.

Character - he wanted to see high degrees of integrity, commitment and discipline by those running the company.

Reflecting, I thought it was interesting to note that essentially 3 of the 4 key ingredients for this gentleman when giving money were on the softer side of business acumen. Of course, having the core competencies of finance, accounting, statistics, economics, marketing, etc are absolutely critical to the success of the company...but it emphasizes to me that who you are and how you build relationships with stakeholders weighed much more heavily in his mind...

Build a great team...surround yourself with the right people. Hold each other accountable. Work your tails off. Create a great marketing plan. Be transparent with your staff. Do what's right AND do the right thing.