June 8, 2006

Google Alert

We just got de-indexed by google, and I’d like to vent my frustrations and thoughts on this blog. This de-indexing is the second in as many months and brings up two important questions.

First, when will Google fall? History doesn’t leave any big dog standing very long, every empire has fallen at some point. So when will Google’s reign end? They just settled the click-fraud case which hurt their reputation big time. They’re fighting several battles in court and trying to keep a secret.  It’s a like/dislike relationship:  we like them when we’re indexed, and can’t stand it when we’re not!
Second, and more important, is how do we survive without Google? When they de-indexed us, a lot of our traffic dove to the floor. Same thing when our Adwords account shut down temporarily. In some marketing areas, we use Google like a man with a broken leg uses his crutch; it’s hard to move without it. I imagine that some other company will step in and take their place, but who, and will they be as effective?

Third, and most important, Trent: Miami in seven. Go HEAT!!!




June 7, 2006

Dedicated Due Diligence

Point of purchase displays entices consumers, leading them to make quick, impulse decisions about a product. Entrepreneurs sometimes take a similar approach anxiously rushing investors. Rarely is there a need to feel rushed or pressured.

Due diligence brings potential problems to the surface. Performing effective, thorough due diligence before investing, can prevent losses and may lead to deals that increase the value of your investment portfolio. For the more experienced investors this will serve as a review, but for investors who are new to the scene you may want to take notes.

At this critical point in the investment process ask/investigate the following:

  • Does the team have specific knowledge and experience that make them appropriate for this venture? Can you trust them?
  • Is there a good market opportunity?
  • Does the plan show a detailed understanding of the potential customer?
  • What is the unique offering behind the plan?
  • Does the overall business model make sense?
  • If they exist, how does the company plan to displace firmly established competitors?
  • Have advertising, promotion, distribution channels and strategic sales costs been assessed accurately?
  • Are the capital requirements, growth, and profitability reasonable?
  • Does the plan show attention to detail and form (correct spelling, grammar, and punctuation; good organization)?

In addition, two important question often arise during the due diligence process. First, what is the risk associated with this investment? Second, does the potential for success outweigh these risks? After these questions have been answered you can begin to make a decision about funding a business.

Check out FundingUniversity for details on the documents, assessments and interviews that should be collected/conducted as part of the due diligence process. As a reminder, areas which should be heavily researched include:

  • market, customer, sales
  • product/service offering
  • management team
  • competition
  • financials

Good luck!

The FundingUniverse.com Team




Pitching like a Pro

A perfect pitch can be the lynchpin in your quest for funding. It plays a huge role in whether you will receive additional contact/feedback from an investor, so FundingUniverse.com has come up with Three C’s of Effective Pitching. If every part of your pitch doesn’t fit the three C’s, a potential investor may pass you by. The three C’s are:

Clear

Keep your pitch free from distractions. Your ability to clearly present your business idea allows investors to focus on your plan rather than trying to understand something that was ambiguous. To present your pitch clearly you should:

  • Be prepared. Bring your own power cords, projector, a working prototype of your product, and anything else you need to make an impression.
  • Videotape your pitch. Watch yourself with a critical eye. Have friends watch it with a critical eye. Make the improvements. Have more friends watch it. Make improvements. Have more friends watch it. Improve. You get the picture.
  • Be honest about weaknesses, but positive about your potential. No enterprise is flawless, and no repudiated angel will expect it to be.

Captivating

A little excitement can gain the attention of potential investors. Angels don’t consider pitches that bore them. This doesn’t mean you should turn your pitch into a circus, but the following rules can help you get your point across:

  • Research your audience and their concerns. What factors will help determine how they will respond to your pitch? What’s their age, their gender, their socio-economic background? What have they invested in before and what are their interests now?
  • Take notes while the other members of your team are presenting. Then use your notes to rewrite your pitch later.
  • Be observant and responsive the reactions (verbal and non-verbal) of your audience.
  • Make vocal fillers (um, eh, like, etc.) your number one public enemy.

Concise

An effective pitch contains no fluff. The pitch options presented above don’t leave any room for the non-essentials. Extremely impressive pitches leave the investor time to question you thoroughly, assess your potential, and grab a donut.

At the very least your pitch should include the following:

  • Company’s name
  • Business Cards
  • Product/service
  • Current success
  • Market opportunity
  • Any other genius your company has to offer (i.e. a management team/advisory board, a great network, a great location, etc.)

For additional pitching tips visit FundingUniversity.