Proven Tips for Attracting Investors
Since we are on the topic of business plans today, I'm inspired to share another tip on how to improve them as a funding tool.
Long ago, back in the fall of 1986, I had just completed my business degree and was looking for a startup gig. Then one fateful morning the telephone rang. It was a couple of electrical engineers I had done some work for that spring as part of my university's student-run small business consulting group. This time they wanted me to help them write a business plan. Since they were working on some innovative stuff with inverter technology, I jumped at the opportunity. In lieu of a real salary at the beginning I was given a small stipend and block of equity in their company. This motivated me even more than a pay check.
Within a few weeks of starting with them, it was decided that the five key officers would travel to San Francisco to exhibit at the Macintosh Show at the Marconi Center. Our initial product was a UPS (uninterruptible power supply) for the Macintosh computer which back then had strong market share. We called it the MacUPS. At the show we met all the prospective distributors for our product as well as the people publishing the various Macintosh magazines. All of them loved the MacUPS prototype we had brought for demonstration purposes.
Then the light bulb went on!
Since there was such a high concentration of Mac distributors at the show why not ask them all for written evidence of their interest in carrying our product? So over the next two or three days, it became my responsibility to solicit letters of interest. In most cases, they supplied them. In a few cases, because they were understaffed and overworked, I volunteered to write their letter for them. Once the draft was approved it was printed out on their letterhead and finally signed by a senior officer of their company.
After returning home, I decided to put the 10 best letters at the very front of the business--before even the executive summary. The plan ended up winning us $545,000 in venture capital funding which back in 1987 was some serious coin.
Don't miss opportunities like this at the next trade show or industry conference you attend to provide proof of genuine market interest to investors.