Author: Damian Brasher Date: To: Hampshire LUG Discussion List Subject: Re: [Hampshire] [OT] Letter to investors
Edward Beckmann wrote:
> There's loads of sound feedback that I do not intend to duplicate, but here
> is an extract of the kind of guidance that I offer people. It tends to be on
> the blunt side because investors are blunt. Take it as read I am aware of
> the time, expertise and heart that you have invested yourself:
>
> 1. who is your investor?
>
> I see two types of investor - one who is in it for the return and the only
> interest they have in the technical side is to ensure that your claims /
> aspirations are possible. The other investor wants a return, but has a
> technical interest in that they may also help with the project in some way,
> or it complements their existing business in some way.
>
> 2. what known need in the market are you filling? i.e. how does the world
> exist without your solution?
>
> This is where an investor needs to see a list of the current options, their
> strengths and weaknesses, and the thing that is significantly better about
> yours that will make people part with money or time to adopt. It is easy to
> knock any solution, more difficult to get people to prise themselves away
> from an imperfect but familiar one. So the balance is not only what is good
> about what you offer, but is the current stuff bad enough to leave?
>
> 3. risk and uncertainties
>
> You are hoping for an investment in a plan, not a hope. Therefore I believe
> two points are relevant:
>
> Your plan should state how, when why etc. you will get the product to
> market. In drafting the plan you will have to make a lot of decisions and
> evaluate options - the value you add to a plan is not to research options,
> it is to make recommendations / take decisions. Therefore asking for a wide
> range of investment because of lots of variables (e.g. coding speed and
> cost) tells me you have identified variables, but not solved a puzzle and
> made a definite plan.
>
> Secondly, investors acknowledge risk, which is why they demand a good
> return. However, highlighting that things can be uncertain because it is a
> risky business does not reduce your responsibility to explain how you will
> overcome the problems. So investors are really turned off by a hint that
> there is uncertainty - your role in their eyes is to have a smart plan that
> deals with variables.
>
>>From an investors point of view projects do not fail because of variables
> and uncertainties. They fail because you did not deal with the variables and
> uncertainties. So they need to see you have a plan that will deal with them.
>
> 4. your personal finances
>
> The time and money that you have invested so far is very relevant. However,
> any problems you have in finances right now is telling an investor that you
> planned to get investment later than you really needed it. Therefore they
> might wonder what else in your plan is going to happen later than it was
> needed ...
>
>
> In summary, the comments above can be dealt with by attitude, different
> wording or agreeing to disagree with me (which would not offend me), and you
> are the best judge which works for you in each case.
>
> Have fun tying down the loose ends.
Thanks, that's great ED - I'll enjoy working on this as soon as I have the
resources.
