Earlier this morning, we pinged out a sponsored message promoting a capital raising workshop.
It reminded me of a ‘rant’ we published in the second or third edition of Anthill Magazine, way back in March 2004, by Michael Gordon. The piece was about the frustration many investors (and editors) feel when being pitched to.
Here’s what we published in 2004…
Why is it that so many people involved in the communications, information and biotechnology industries seem incapable of simply articulating what it is that their wonderful technologies do. What is the point of boring investors to tears when all they really care about are the market benefits?
Never has this been more important than today, when funding to develop and exploit these great technologies is required from the great unwashed. It may well be that you have developed a proprietary technology, using the most advanced systems and exploiting the most complex combobulators and thingamejiggits, but to what end?
Business exists to serve its customers. And technology must have a purpose. It exists and will be exploited to meet some unfulfilled need or because it can meet some customer objective more effectively. In other words the technology must deliver some tangible benefit to a defined customer base.
Another way of looking at it… customers buy benefits. And so do investors.
If you are going to cure cancer, thatís fantastic but very few people will be interested in how many Nobel Laureates you have on your team or what gene technology breakthrough you have achieved, unless you tell them that you intend to cure a disease that affects billions of people each year.
During due diligence an investor is likely to want to understand your process, including technologies used and resources available, but in the initial presentations investors are no different from your ultimate customer; all they want to know is what makes you and your products different.
Twenty years as a business analyst and strategist has taught me one great lesson: There is never any shortage of ideas, modest or grandiose, which have potential but in reality little chance in the proverbial of achieving success. It is rarely the technology that is responsible for the lack of success. Rather, it is typically a failure to understand the basic principals of business management.
As the dotcom boom so clearly articulated, build to satisfy a need. And when looking for capital, GET TO THE POINT!
Honestly, has much changed? Maybe. Maybe not.