What It Is

Just when you were thinking of starting your own company. . .

Loose change isn’t so loose these days. Prying a round of investment from the withered purses of today’s angel investors or firms is no longer a matter of delivering a clever idea and a compelling short speech. Markets have faltered, and with them the tolerance for risk. The quick kill dried up long ago, along with the supply of ready cash. Big surprise; Investors now expect performance ahead of investment. Explosive sectors like biotech and the internet, along with huge growth in three-digit multiples, fostered a tolerance for botched execution. After all, it was really about the ‘concept’ wasn’t it? Investors positioned themselves for short-term gains, exiting quickly and moving on to the next big idea.

These days, however, the bar has been raised on expectations. If you fall down, you’re likely to stay down.

Don’t get the wrong idea: There’s still plenty of money. It’s just that investors have matured beyond dating start-ups. Now they want to marry them. Flash and sizzle no longer count. Results and a track record do. Proven execution means reliability and shelter in the storm, and it is stormy out there. Investment will follow a solid opportunity, but it’s up to you to start your own enterprise, because in this economic environment, investors won’t.

So, after borrowing from your 401K, dad, mom, relatives and friends to get started, what’s next?

Foresight is key: To get the investment pump primed, at a bare minimum you need a ‘tent stake’ business plan - and a solid one, not some pie-in-the-sky fluff - that holds up under critical eyes, along with proof that you’ve worked your plan in some capacity. After that, getting customers, a couple quick wins, growing interest, market buzz, all leading to your well-executed strategic response to the market is what keeps the money flowing. Today’s investments are staged. If you can’t communicate a credible plan for growth, you won’t grow - simple.

Credibility with investors also mandates a clear, detailed, nuts-and-bolts vision for evolving your corporate structure as you grow. These guys think big: How will your financial, ERP, CRM and other systems evolve with the business? Quality? Business continuity? Customer experience management? How do you support these critical functions when you’re small? What will you look like three years from now? At what stages do you add headcount/cost? Where are self-sustaining plateaus, the steps in between? When? How do you rationalize vertical markets, going global? Just like investors have grown up, what do you want to be when you grow up too?

A great concept is just the beginning. Building success with a partner like Thomas Financial Services, LLC, www.thomasfinancialsvcs.com gets you moving faster. Building organizational and operational effectiveness is only part of the story. Planning for success, tuning you up for investment, crafting your message, all take you to the next level. On the other side of the fence, such companies know what investors demand and are often called upon to act as scouts, to provide detailed analysis of targeted companies in a broad array of performance categories.

Great ideas, poorly executed, usually fail. Mediocre ideas, perfectly executed, tend to turn into something big. It’s no secret; Winners keep winning. Success must be institutionalized to be sustainable. Help is around the corner. Embrace it. Times have changed. Growth is slower. Investors insist on long-term wins. You must too.