Every day,
our company receives calls and emails from companies seeking investment.
The large ones we route to
our investment banking practice and the small ones to our
investment conferences in New York, where they can represent themselves to investors without an intermediary. (Others call about our narrow angel investment criteria in telecom or board positions).
But the great majority of callers do none of the above. Some want something for nothing. Others are dreamers whose aspirational companies are unlikely to get off the ground, but remain the subject of loving and lengthy monologues.
It is pretty easy to separate the wheat from the chaff –
(a) those callers who understand the endurance race aspect to raising capital vs.
(b) those who think they just have to talk someone's ear off to collect no-questions-asked checks.
The following paragraphs include snippets of seven, initial conversations with members of the latter group (the naive idealists or what?) followed by my behind-the-scenes interpretation. What is your first impression? Do you think the caller will be taken seriously by a finance professional? If not, do not be like them!
Entrepreneur 1: “I don't need to hire your investment bank or present at your conference. I will be funded by then.”
Us: “Then how can we help you (I'm wondering, uh, why did you call us)?” and “Wonderful news! Are you currently negotiating a letter of intent? (No) Do you have a closing date on the calender (No)."
Entrepreneur 1: “But we have several initial meetings scheduled and they'll love us.”
Interpretation: This caller does not know that investment is often a needle – in-a-haystack search, followed by a lengthy period of due diligence, a letter of intent, negotiated terms, legal advisors, finally culminating in a well defined closing date. In other words, it entails a protracted and
wholly predictable schedule of milestones. Therefore, this blithe comment reveals that s/he has never worked with investors before. Some service providers may take advantage of that. In any case, s/he has lost credibility with professionals who know what s/he does not.