Venture Capital | How to Prepare Your Company

 

EPISODE 135

CHRONICLE: November 29th, 2023

 

Venture Capital | How to Prepare Your Company

 

"Go as far as you can see, when you get there, you'll be able to see farther..."

                                                                                             Leadership from JP Morgan

 

In looking at the factors and misconceptions behind why some companies get funded, others get left with no avenue to attaining the funding they feel they need or deserve.

Having done many deals, predominantly with Visionary entrepreneurs, start-ups, and mid-tier companies, I have found several reasons why some were able to gain interest, get a meeting, and finally culminate in funding.

Most questions I receive from the companies we work with at LiquidMind (LiquidMindsite.com) are how to locate a VC firm, their priorities, where they find deals, and when I will receive a Term Sheet. There are many points of contact, but I have broken these into five areas of focus when dealing with VC firms.

1. The HUNT | Finding Deal Flow
   1. 44% of deal flow comes predominantly from through their network, investors, or other entrepreneurs.
   2. 30% of deal flow comes from References.
   3. From Pitches, although many entrepreneurs think this is the avenue, it is the path least traveled at 10% of Deal Flow.

2. The ODDS | The Funnel
   1. 100 Opportunities.
   2. 28 get a Meeting.
   3. 10 get an internal meeting.
   4. 5 go on to Due Diligence.
   5. 1-2 get a Term Sheet.
   6.  
3. The CLOSE | Deal Timeline.
   1. Due Diligence | 120 hours, on average.
   2. Close | 90-120 days, on average.

4. The FACTORS | Most important to VCs.
   1. Founders/Team | 95%
   2. Business Plan/Opportunity | 75%
   3. Market Size/Exit | 70%
   4. Industry | 30%
   5. Valuation | low point on the totem pole, valuation determined upon exit, and multiple dollar-to-dollar investments. IRR vs. DCF analysis.

 

5. The DEAL | After Close Value.
   1. Guidance | 90%
   2. Investor flow | 70%
   3. Connections | 65%
   4. Operations | 60%
   5. Board | 55%

As you can see, this is very definitive outline but can change relative to the deal flow, opportunity, and other factors.

Although not an exact science, this gives you a good indicator of what is on a Venture Capital firm's radar, the best chances you may have for striking interest, and hopefully, a Term Sheet.

Good luck, and Enjoy the Ride!

 

Stay True, Stay Authentic, be Different, and be Great!

Enjoy the Journey!

 

Bryan Smeltzer, President

 LiquidMind Inc.

 

#TheVisionaryChroniclesPodcast

#TheVisionaryBrandBook

 

@LiquidMindsite.com

@BryanSmeltzer.com

 

 © All rights reserved, Bryan Smeltzer, 2023

 

 

Bryan Smeltzer is a consumer products business executive and entrepreneur. He has held executive-level roles in business development, Product, and marketing with some of the world's most prestigious brands, including; Oakley, TaylorMade, Adidas, K-Swiss, and Schutt Sports, among other international brands. He also founded a men’s apparel brand, successfully running a profitable business for ten years, eventually selling to a VC firm.

 

 

He also hosts a Podcast called The Visionary Chronicles, ranked as the #1 Visionary and Top 50 Marketing Podcasts by Feedspot, and recently finished his first bestselling book, The Visionary Brand, The Success Formula Behind the World’s Most Visionary Brands, and recently received the prestigious Readers Favorite Award for BEST Non-fiction, Marketing Genre book.

 

With the book's release, Bryan created The Visionary Brand MasterCourse. The Master Course site at The VisionaryFiles.com includes a Master Course with 18 Video Learning segments and almost 2 hours of Visionary lessons training. Over the past five weeks, over 1,500 brand leaders and Entrepreneurs have taken the Master Course! Unleash your potential as a brand leader and take the Master Course.

 

 

Bryan oversees LiquidMind Inc., a global brand strategy firm that partners with start-ups and established mid to large-cap consumer brands to empower businesses to think differently, be different, drive a passionate culture, and execute relentlessly.

You can contact or  follow him at;

 

email |  bryan@LiquidMindsite.com

Facebook |  @bryansmeltzer33

 Instagram | @bryan_smeltzer

X |  @bryansmeltzer

LinkedIn |  linkedin.com/in/bryansmeltzer/