Pearls of Wisdom

• Don’t fall in love with a deal.

• Don’t let the warts scare you off.  No deal is ever perfect.

• Share the good news, for everyone likes good news.  Share the bad news, and everyone has some bad news, so something can be done about it.  But never surprise anyone.

• Understanding the deal.  This is the corollary of “Thirty Words to Capital”.  Just as the capital source needs to understand your business and concepts, entrepreneurs needs to understand the terms of the deal.  Don’t feel dumb; ask questions.  Capital and you are the combination which can make both of you a lot of money.

• Be prepared for very tough questions.

• Don’t expect the financial guys to be experts in your field.   And for you financial guys, don’t expect the entrepreneur to be experts in finance.

• If you don’t have a needed skill set, get a hired gun to cover your needs.

• Don’t be terrified that the capital source is going to take over and try to run your business.  The last thing capital wants to do is to run your operations.  If they need to, it’s only because you have messed up badly. They are as afraid as you are of their needing to run your show.

• Don’t get overly hung up on current valuation.  Be more concerned about what the commercial value of your product or service is and will be.

• Know your distinct competencies, and exploit it.

• Non-financial barriers to entry are wonderful.

• An entrepreneur doesn’t have to have an exit strategy to succeed, while a capital source does.  Capital sources make their money by investing and then harvesting the investments.

• A financial model is useless if you force the numbers.

• A financial model which automatically increment sales or margins by X% or $Y is also useless.

• An Executive Summary really must summarize a full business plan.  Don’t think a rough outline is the same as a summary.

• If you don’t trust the people, don’t do the deal... simple, just say no.

• Challenge all assumptions.  You don’t have to be antagonistic, but know what the assumptions are based on.

• A business model that has been validated in the market place is a business model that will likely get funded