The Money Chase: What Does Investment Grade Mean? Part 1

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Jan 242010
 

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  • Initiative: Investors are always avoiding entrepreneurs who cede the initiative to events beyond their control. They avoid teams what come to a dead stop because a funding decision has not been made, a key piece of technology has not been developed or the business plan has not been finalized. One investor had a particularly interesting way of focusing this issue. He added up the total number of hours that a team had at its disposal during a given week and then compared it with what they had accomplished. The results were sometimes startling. In one particular case, he came to the conclusion that the founders had to be spending most of their time playing video games as they got so very little out of the hours at their disposal. Another entrepreneur made a presentation with a business plan that had a two year old date stamp on it. He was asked, “in the two years since this plan was completed, what have you accomplished”? The silence that followed brought the meeting to a rapid conclusion. Every presenter needs to be aware that they are being graded primarily on the results they have already achieved. Having a business plan and an untested value proposition is not nearly enough. Being an entrepreneur is about implementing. Without that, you are just an author of third-rate fiction.

    • Next: The Money Chase: What Does Investment Grade Mean? Part 2 – Value Proposition

    © Dr. Earl R. Smith II

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      52 Responses to “The Money Chase: What Does Investment Grade Mean? Part 1”

    1. Dr. Earl R. Smith II says:
      May 31, 2010 at 10:14 AM

      Praveen Kumar wrote:

      @Dr. Smith…

      Glad to know that an example that came to my mind is one given by stalwart like you …

      you are right about the baby example as well…..

      and I must thank you for the statistics on marriage and investment…. I thought the equation was heavily tilted to the investment side :)

    2. Dr. Earl R. Smith II says:
      May 31, 2010 at 10:13 AM

      Praveen Kumar wrote:

      @ walter ..

      thanks for the insight .. you are right … these days even guys are going around dating 15 women at a time and if resources and law allowed they would marry 15 girls at a time :) …

      you are right that the VC’s have to work with 100 proposals at a time but I would still say they should short-list and have a dating period… i think its good for both sides…

      for VC firm of google one marriage was good enough…..

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