Creating A New Technology: Preparing To Approach Investors

Creating A New Technology: Preparing To Approach Investors



Article written by Taffy Williams, CEO of Colonial Technology Development Co.

Part one answered the question: What are the critical steps needed to create a new technology. This part helps you put together a working document for funding purposes.

Business Plan & Slide Deck
Organize your thoughts and develop a solid business plan. This is an in depth description of the technology field of the company, corporate structure, the potential products, how these fit in the commercial landscape, the management team with their ability to execute, summary of the IP, competition, competitive advantages, and cash flow projections plus timelines of the key milestones of the company, and more. There are a few different models for business plans. It can take a while to prepare and will require significant supplemental research to make sure it can withstand scrutiny. This is the first real document that will be seen by potential funding. A good executive summary is often a great introductory piece to send to an investor, but the full business plan will be something investors will want to see.

Next in the company development process is to generate a investor pitch slide deck and a good “Elevator Pitch”. An Elevator Pitch is a 20- 30 sec description of the business that helps an investor quickly decide whether they are willing to take a follow up meeting.

The Slide Deck is a description of the company, management, technology, product, and value proposition for an investor or company. It is a presentation / sales pitch on what the company is, who is running it, what the products are, and how the person listening will make money by investing in the company. Two versions are worthy of preparation; one which is around 20 min and one around 40 min in length. The 20 min version is most often used. With questions the presentations can run 1.5 hr, but try to keep it to under an hour. Also practice a short version presentation to be delivered in around 5 min. Sometimes, investors get busy and can only give a small amount of time. Always be courteous of the investor’s time in your delivery and help them keep their schedule.

Funding
Funding can come from Friends & Family, Angel Investors, Venture Capital, Partners, and other sources. Be prepared for the long haul, there may be a significant time before funds come to the company. Do not expect to draw a salary for several months and possibly longer.

Raising capital is the part of the business that most entrepreneurs like the least. Sometimes discussions can be rather difficult while others are informative and company gets great advice. Do not take comments or rejection as a personal attack and remember that only one investor is needed to get a good start. Focus on identifying an individual or group that likes the company, management team, and technology. They will be affiliated with the company for a long time.

Grants and government funding sources are also options to consider and they are non-dilutive. There are a wide variety of grants which are possible to obtain, but it takes time and they are not guaranteed. Funding can also come from government and state programs, loans or grants, and a range of organizations that have special interests in the technology. Special interest groups for example have granting facilities for certain health areas, others for agriculture, and DOD for a wide range of areas.

Summary
The key take home points to remember:
1.Work in area you find exciting
2.Develop a “Moat around the Field” with “IP and Know How”. Yes you are to generate a true legal monopoly.
3.Generate a stellar business plan and a presentation to match. Be prepared to convince people to invest in the company and that you really need to know the space.
4.Get MONEY. It is very hard to run a company with no funds.
5.It is important not to get discouraged, to KEEP TRYING; persistence is essential.

You can follow Taffy Williams on Twitter by @twilli2861 and you can email him with questions at twilli2861@aol.com or contact him via company contact info in the website. More Startup information is contained in his personal blog. His photography is also available on line.