Mark Peter Davis of Interplay Ventures joins Nick to cover The Hunt for Investors, Part 2. We will discuss the remaining questions including:
- When an entrepreneur gets a first meeting w/ an investor, what should they do, and conversely, what should they avoid doing in that meeting?
- After initial meetings, let’s say the entrepreneur has some indications of interest… what due diligence materials should a founder consider and prepare for?
- How do you advise entrepreneurs w/ regards to deal terms, valuation and maintaining the appropriate level of control?
- Tell us about the Founder Catch 22, and what should entrepreneurs do about it
- You’ve written a lot about failure on your blog; can you talk about what you’ve learned and/or any lessons for entrepreneurs or investors.
- Can you talk about some of the things you’re currently up to and most focused on?
- If we could address any topic in venture, what topic do you think should be addressed and who would you like to hear speak about it?
- What’s the best way for listeners to connect with you?
1- The Search for Investors
- The Bait: The executive summary. Doesn’t need to fully explain your business. Just needs to address the basic characteristics of the business. Sector, location, team bios, raise amount, traction. The goal at that stage should just be to get a meeting.
- The Presentation: The powerpoint deck. More detail than the exec summary. Includes a deeper dive on the previous elements plus some additional elements. If you’d like to read more about what’s necessary in the standard pitch deck, you can check out the previous tip of the week called, the Elevator Pitch, that was covered on the episode with David Brown.
- The How: This is the operating model, not the financial model. It illuminates the key drivers of value and the key cost centers. What’s the cost of customer acquisition in X channel? What’s the recurring and lifetime value that each customer contributes. With this detail it’s very easy to understand the go-to-market strategy, what acquisition data is known and what still needs to be tested. This illuminates the key levers that the founder will pull in order to drive value and justifies the cost-side actions and need for outside capital.
Tip of the Week: Tips for Fundraising Entrepreneurs