Packaging Your Technology IP or Invention to Raise Capital
This is the third article, in a six part series in which we are reviewing the 6 most important truths that all entrepreneurial-minded scientists and/or inventors should understand in their quest to turn an idea or invention into a home-run multi-million dollar business. In our previous two articles, we took a look at the importance of a business plan to commercializing your technology, IP or innovations, as well as discussed the value of your patent to raising capital.
So what does it really take to raise capital? First, you need to project your idea into the future. Establish a clear vision (think size of a Basketball) and then back track to what you need to do to get there (remember, your idea is currently the size of a marble).
Next, you need to take an objective look at the gaps in your business? It is critically important to stress the word “objective”. Most entrepreneurs struggle with this as they find themselves looking through the rose-colored glasses they purchased at the nearest Overly Optimistic Shop. Friends and family can be great resources for feedback, but be sure to ask them to be candid even if they think it’s not what you want to hear.
Ask yourself the following:
- Do I have the right strategy and tactics to create a sustainable business year after year?
- Do I know my “real” capital requirements to execute on this strategy?
- Do I have the right management team in place to compliment my own skills and expertise?
- Will investors be convinced I can execute with this team?
Bottom line, it’s not so much about the idea or the IP as it is about the execution. Can you convince investors that you can execute? If the answer is “no”, you need to seek out 3rd-Party assistance (consultants, advisors, new management team members, etc.) to ensure you have the business expertise to answer yes.
If you have all of your gaps filled, you now need to create the “Best Package” possible to present to the investment community. By package, I mean, you need to present your company in the best light possible. Here are three easy steps toward accomplishing this:
- First you must look the part: Spend money and time to create a logo and an impressive “look and feel” to your PowerPoint presentation to match.
- Second, build an advisory board to show investors that experts think you’re fundable.
- Third, create the absolute “best” business plan, executive summary, and PowerPoint presentation that you and your team can develop. Once finished, show them to your advisors and ask them for their objective opinion. Be sure to tell them not to hold back. If they say “perfect” then you’re set. However, if they say “it’s OK or needs work” then you know you need to either take another run at it yourself, or hire a consultant to help you become “investor ready.”
At the end of these three steps, you will be well on your way to having your “Best Package.”
Truth #3 – you must honestly assess if you have put your best foot forward with the resources you currently have available. You have one shot with an investor. Creating your “Best Package” the first time will not only help open doors but should also provide you a better shot at successfully raising capital. Putting your best effort out there the first time will also help keep investors focused on the investment, your team, your strategy and your ability to execute. If these are all strong, your chance of cashing a check in the near future goes way up. Good Luck!