Comments on: Presentations from the Investor’s Perspective http://www.dr-smith.info/presentations-from-the-investor%e2%80%99s-perspective/ Turnaround Management, Senior Adviser, Board Member, Executive Coach, Author, Speaker, Radio & TV Guest & Panel Member Fri, 03 Sep 2010 13:13:51 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Dr. Earl R. Smith II http://www.dr-smith.info/presentations-from-the-investor%e2%80%99s-perspective/comment-page-2/#comment-13848 Dr. Earl R. Smith II Sat, 26 Jun 2010 15:47:35 +0000 http://www.dr-smith.info/?p=4932#comment-13848 This is a very pertinent observation. One of the key roles of an independent governing board is to help founders to make the transition and to provide the insights and guidance that are required as companies grow and external investment plays a larger role. Any founder that is thinking of bringing in external investors should look first to create a strong governing team. That will give investors confidence, assist with maintaining strategic control if investors want board seats, and provide the guidance and supports that CEOs need as they progress. Posted by Julie Garland McLellan This is a very pertinent observation. One of the key roles of an independent governing board is to help founders to make the transition and to provide the insights and guidance that are required as companies grow and external investment plays a larger role.
Any founder that is thinking of bringing in external investors should look first to create a strong governing team. That will give investors confidence, assist with maintaining strategic control if investors want board seats, and provide the guidance and supports that CEOs need as they progress.
Posted by Julie Garland McLellan

]]> By: Dr. Earl R. Smith II http://www.dr-smith.info/presentations-from-the-investor%e2%80%99s-perspective/comment-page-2/#comment-13846 Dr. Earl R. Smith II Sat, 26 Jun 2010 15:46:50 +0000 http://www.dr-smith.info/?p=4932#comment-13846 I appreciate that you do not say that the company should send their powerpoint deck in advance of the meeting. This is something that I would never agree to do as it takes away from the delivery of the presentation -- basically steals my thunder. Great post from a different perspective, thanks! Posted by Lisa Hjorten I appreciate that you do not say that the company should send their powerpoint deck in advance of the meeting. This is something that I would never agree to do as it takes away from the delivery of the presentation — basically steals my thunder. Great post from a different perspective, thanks!
Posted by Lisa Hjorten

]]> By: Dr. Earl R. Smith II http://www.dr-smith.info/presentations-from-the-investor%e2%80%99s-perspective/comment-page-2/#comment-13844 Dr. Earl R. Smith II Sat, 26 Jun 2010 15:46:00 +0000 http://www.dr-smith.info/?p=4932#comment-13844 Excellent article about the process. All entrepreneurs should read this before doing their plan as it outlines in broad strokes how to think about what they need to do and what investors look for. I am amazed most times I talk with entrepreneurs about how little they understand or know about the process, especially in today's market. I actually had one ask me to read their plan and comment about the plan. I pointed out items that I felt would be necessary for an investor to even begin to consider investing and the entrepreneur's response to me was your telling me this is a dead opportunity for me. I told him no, but you are going to need to research this and provide answers to these questions before an investor considers your project. He was missing basic items such as a complete team, cost projections only were for construction cost, etc. He felt all he needed to do was to present his idea to an investor and they would jump right on it. He was asking me to present it to some of the funding sources I have. This why he asked me to read his executive summary. I could not in good conscious present it to my funding sources as it would be a waste of time and hurt my credibility. I passed on something I felt if done right with the correct team was a solid investment oportunity. First of all my expertise is as an architect. I have worked with and been involved with developers for many years and have a good idea of what is needed to approach an investor. I am by no means an expert so if I see some very obvious holes in the presentation I am not going to fray my relationship with my funding sources by asking them to review something I know will not be considered. I try not to waste anyone's time yet many entrepreneurs get so caught up in what they consider a unique idea they want to jump ahead into producing it without going through the process of developing the idea in a logical manner and looking for all or as many scenarios that they can come up with that might cause the idea to fail. A good process for developing a presentation would be to list every item you need to accomplish to make your idea happen, list what it takes to make each of these items to happen and then develop a plan to make each item happen. When I say this I think the list should extend at least five years after opening the business not just include what it takes to open the business. As you say the projections are almost always a best guess. Entrepreneurs seem to think the best way to impress an investor is to have best case numbers laid out. Maybe that was true at some point, but today they want realistic numbers. If I can spot numbers that look wrong them more than likely the presentation is d.o.a. and you do not get a second chance in today's market. The one item I seem to never see in an executive summary is an exit strategy and yet this is one of the most important aspects for an investor. Today's investors seem to want some basic information expressed clearly. A good idea, a solid, experienced management team, realistic numbers and an exit strategy. Missing any of these in the presentation is probably going to eliminate you from any consideration. Depending on what the deal is there will also need to be other items considered, but I think these are the minimum to start. Once again excellent article. Thank you. Posted by John E. Burk Excellent article about the process. All entrepreneurs should read this before doing their plan as it outlines in broad strokes how to think about what they need to do and what investors look for. I am amazed most times I talk with entrepreneurs about how little they understand or know about the process, especially in today’s market. I actually had one ask me to read their plan and comment about the plan. I pointed out items that I felt would be necessary for an investor to even begin to consider investing and the entrepreneur’s response to me was your telling me this is a dead opportunity for me. I told him no, but you are going to need to research this and provide answers to these questions before an investor considers your project. He was missing basic items such as a complete team, cost projections only were for construction cost, etc. He felt all he needed to do was to present his idea to an investor and they would jump right on it. He was asking me to present it to some of the funding sources I have. This why he asked me to read his executive summary. I could not in good conscious present it to my funding sources as it would be a waste of time and hurt my credibility. I passed on something I felt if done right with the correct team was a solid investment oportunity.

First of all my expertise is as an architect. I have worked with and been involved with developers for many years and have a good idea of what is needed to approach an investor. I am by no means an expert so if I see some very obvious holes in the presentation I am not going to fray my relationship with my funding sources by asking them to review something I know will not be considered. I try not to waste anyone’s time yet many entrepreneurs get so caught up in what they consider a unique idea they want to jump ahead into producing it without going through the process of developing the idea in a logical manner and looking for all or as many scenarios that they can come up with that might cause the idea to fail. A good process for developing a presentation would be to list every item you need to accomplish to make your idea happen, list what it takes to make each of these items to happen and then develop a plan to make each item happen. When I say this I think the list should extend at least five years after opening the business not just include what it takes to open the business. As you say the projections are almost always a best guess. Entrepreneurs seem to think the best way to impress an investor is to have best case numbers laid out. Maybe that was true at some point, but today they want realistic numbers. If I can spot numbers that look wrong them more than likely the presentation is d.o.a. and you do not get a second chance in today’s market.

The one item I seem to never see in an executive summary is an exit strategy and yet this is one of the most important aspects for an investor. Today’s investors seem to want some basic information expressed clearly. A good idea, a solid, experienced management team, realistic numbers and an exit strategy. Missing any of these in the presentation is probably going to eliminate you from any consideration. Depending on what the deal is there will also need to be other items considered, but I think these are the minimum to start.

Once again excellent article.

Thank you.
Posted by John E. Burk

]]> By: Dr. Earl R. Smith II http://www.dr-smith.info/presentations-from-the-investor%e2%80%99s-perspective/comment-page-2/#comment-13842 Dr. Earl R. Smith II Sat, 26 Jun 2010 15:44:56 +0000 http://www.dr-smith.info/?p=4932#comment-13842 This is an excellent and fortunately very true set of observation. I have had a number of interim roles leading transitions from founder managed to private equity. In every case, the founders have been so tightly coupled to their dream - that seeing it through the eyes of others has been difficult. Often there has been a spouse behind the scenes that made the challenge even more difficult. Invariably in these founder led firms... I have battled a desire to “sell” what was done over the past twenty years and then extend that as “more of the same, but bigger”. Depending on the fund raising stage (and personal network); angel partners can be a "more forgiving" starting place. I do think the understanding of external value and the presentation building process has been simplified when there were already angel partners in the picture who could help drive objectivity into the VC search. Posted by Barry Cole This is an excellent and fortunately very true set of observation.
I have had a number of interim roles leading transitions from founder managed to private equity. In every case, the founders have been so tightly coupled to their dream – that seeing it through the eyes of others has been difficult. Often there has been a spouse behind the scenes that made the challenge even more difficult.
Invariably in these founder led firms… I have battled a desire to “sell” what was done over the past twenty years and then extend that as “more of the same, but bigger”.
Depending on the fund raising stage (and personal network); angel partners can be a “more forgiving” starting place. I do think the understanding of external value and the presentation building process has been simplified when there were already angel partners in the picture who could help drive objectivity into the VC search.
Posted by Barry Cole

]]> By: Dr. Earl R. Smith II http://www.dr-smith.info/presentations-from-the-investor%e2%80%99s-perspective/comment-page-2/#comment-13841 Dr. Earl R. Smith II Sat, 26 Jun 2010 15:44:20 +0000 http://www.dr-smith.info/?p=4932#comment-13841 Earl, this is an interesting concept. I have devoted significant time to helping companies maximize their employee productivity and to further help companies succeed. Part of my strength comes from my work as a mediator and arbitrator in the field. The first rule is to look at things from all sides. I think that yours is a great concept. One challenge is that many who seek money have a great idea but lack the business experience to drive the project. They often lack the ability or willingness to invest in a team that can help see the project through. Further, they have no exit strategy. Posted by David Gabor Earl, this is an interesting concept. I have devoted significant time to helping companies maximize their employee productivity and to further help companies succeed. Part of my strength comes from my work as a mediator and arbitrator in the field. The first rule is to look at things from all sides.

I think that yours is a great concept.

One challenge is that many who seek money have a great idea but lack the business experience to drive the project. They often lack the ability or willingness to invest in a team that can help see the project through. Further, they have no exit strategy.
Posted by David Gabor

]]> By: Dr. Earl R. Smith II http://www.dr-smith.info/presentations-from-the-investor%e2%80%99s-perspective/comment-page-2/#comment-13838 Dr. Earl R. Smith II Sat, 26 Jun 2010 15:43:10 +0000 http://www.dr-smith.info/?p=4932#comment-13838 I am impressed by your thoughts and would be happy to find some time to speak next week. Regards, David Posted by David Gabor I am impressed by your thoughts and would be happy to find some time to speak next week.

Regards,

David

Posted by David Gabor

]]> By: Dr. Earl R. Smith II http://www.dr-smith.info/presentations-from-the-investor%e2%80%99s-perspective/comment-page-2/#comment-13837 Dr. Earl R. Smith II Sat, 26 Jun 2010 15:42:30 +0000 http://www.dr-smith.info/?p=4932#comment-13837 Dr. Smith, I find your articles very helpful. Posted by Martha Retallick Dr. Smith, I find your articles very helpful.

Posted by Martha Retallick

]]> By: Marc McCormick http://www.dr-smith.info/presentations-from-the-investor%e2%80%99s-perspective/comment-page-2/#comment-13821 Marc McCormick Thu, 24 Jun 2010 22:47:30 +0000 http://www.dr-smith.info/?p=4932#comment-13821 Dr. Smith, I will soon be seeking capital for launch of a business platform to provide (what I consider) timely services to banks. As a R.E. developer/investor used to debt financing, raising equity capital is new to me and I am intimidated. Thank you for the insight. --Marc McCormick Dr. Smith, I will soon be seeking capital for launch of a business platform to provide (what I consider) timely services to banks. As a R.E. developer/investor used to debt financing, raising equity capital is new to me and I am intimidated. Thank you for the insight. –Marc McCormick

]]> By: Dr. Earl R. Smith II http://www.dr-smith.info/presentations-from-the-investor%e2%80%99s-perspective/comment-page-2/#comment-12412 Dr. Earl R. Smith II Sun, 21 Feb 2010 16:25:44 +0000 http://www.dr-smith.info/?p=4932#comment-12412 Vitaly, Thanks for the comment and links - very helpful. I agree that many CEOs have very spotty knowledge about IB and how they work. My group is organizing a seminar for this April and that is one of the focuses of it. Investment Bankers can be a great help is the client understands how they work and what their standards and objectives are. Lacking that, relationships with either inexperienced or unsophisticated clients can be very rocky indeed. I visited the article - if Hal would provide me with a Word file version, I would be glad to publish it on my website as a guest article. Dr. Smith Vitaly, Thanks for the comment and links – very helpful. I agree that many CEOs have very spotty knowledge about IB and how they work. My group is organizing a seminar for this April and that is one of the focuses of it. Investment Bankers can be a great help is the client understands how they work and what their standards and objectives are. Lacking that, relationships with either inexperienced or unsophisticated clients can be very rocky indeed. I visited the article – if Hal would provide me with a Word file version, I would be glad to publish it on my website as a guest article. Dr. Smith

]]> By: Dr. Earl R. Smith II http://www.dr-smith.info/presentations-from-the-investor%e2%80%99s-perspective/comment-page-2/#comment-12411 Dr. Earl R. Smith II Sun, 21 Feb 2010 16:20:23 +0000 http://www.dr-smith.info/?p=4932#comment-12411 Vitaly Michka wrote: Great article, Dr. Smith! We work a lot with Investment Banks, I am amazed how little potential clients know about IB and how they work. My colleague wrote a great article on this subject: http://bit.ly/9ReCnS I believe that one must know what the IB want to finance and what they are looking for. There are no point in presenting them a project they have no appetite for. Here is my short article on this subject for your perusal: http://bit.ly/9BsXYQ Vitaly Michka wrote:

Great article, Dr. Smith!

We work a lot with Investment Banks, I am amazed how little potential clients know about IB and how they work. My colleague wrote a great article on this subject: http://bit.ly/9ReCnS

I believe that one must know what the IB want to finance and what they are looking for. There are no point in presenting them a project they have no appetite for. Here is my short article on this subject for your perusal: http://bit.ly/9BsXYQ

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