Memo to: Entrepreneurs seeking financing
From: Angel Networker
Subject: Who's buying?
Last week my fellow angel investors and I were on the panel to screen companies who want to pitch at the next meeting of the VANTEC angels. It's really fascinating to see all these great technologies BUT ... I'll get right to the point: Who's buying your device, your new drug, your software app, your whatever?
To be a successful company, it's more than just cool technology. Yes, your technology will do wonderful things, contribute to the greater good of society, etc. etc. ... but in the blunt words of one of the VANTEC panelists: "We don't care about the technology; just tell us how you're going to make money for us." (Lesson note here: Know your audience. It's important when pitching to investors to show how and when they're going to get their money back and at what return.)
Successful entrepreneurs will take this message seriously - but not to satisfy a seemingly heartless investor. Successful entrepreneurs work to ensure that their cool technology can actually solve a customer pain and will actually become a product or service that real customers will buy - repeatedly. They study the fine details of who is the customer and how this customer buys. They plan and execute a viable business model around this buying behaviour in order to generate the revenues that will sustain the survival and growth of their company. Successful entrepreneurs understand: No revenues means no future for the company.
This week I've been busy doing due diligence on the companies vying for spots on the Ready-to-Rocket and Emerging Rockets lists for 2010. I spoke to a company that made it to the coveted Ready-to-Rocket 25 list and who had previously presented to the VANTEC angels. This entrepreneur planned and executed a great business model for his technology; and relentlessly pursued customers to generate sustainable revenues. THIS entrepreneur knew how to answer the question: Who's buying?