When Raising Capital, Communicate With Energy and Expertise!

One of the very first lessons any early-stage entrepreneur must learn is the art and science of raising capital. It is a never-ending process that is truly a major component of the lifeblood of any company. Regardless of how good a product might be, or how tremendously it solves an acknowledged problem in the marketplace, without a positive influx of cash, the technology and the company will die on the vine. 

Learning how to effectively present to Angel investors is a mission critical item for the entrepreneur. This is where paying particular attention to your E2 equation can make or break your concern.   So, what exactly is E2 and how can we apply it to the raising of capital? 

E2 is nothing more than a notation to remind us to always fill our investor presentation with Energy and Expertise. Angel investors, or any investor for that matter, will understand that any new entrepreneur will not have all the answers, nor will they intuitively understand how to build a successful business. This is where a good investor will bring their knowledge, guidance and experience to the table to help increase the probability of success. 

Two mission critical items most savvy investors will be looking for at this stage of the company’s development are the level of Energy the entrepreneur brings to the table, and the level of Expertise tied to it. Let’s look at each individually. 

Energy.  

A lot of hard work can and will make up for a deficit of practical business experience.  When an investor is sizing up the opportunity, the very first thing they will look at is you and your team (if you have one). A big part of what they are trying to determine, is what level of energy do you bring to the table? Is it obvious to them that you eat, breathe and live this idea? Are you so passionate about it that it keeps you up at night? Is every waking moment devoted to turning your idea into a commercial success? 

If it is, this will be a huge plus for you in the yay or nay column. This is not something that can be faked or embellished. Investors have seen the good, the bad, the ugly and everything in between. They are very good at seeing through a façade.  They are also very good at identifying the real thing when an entrepreneur is throwing his or her heart and soul into the process. Make sure you are in this with everything you’ve got and make sure it shines through in your presentation. 

Let’s assume this is the case and you are the type of person the investors might have to occasionally pull the reins in on. Great place to be!  Now that they know and can see for themselves that you are “all in”, the second mission critical item they will be looking for is your level of expertise. 

Think of it in these terms. When it comes to telling your story and explaining how your product, idea, or service works, everything you say and do should send the message that you are the subject matter expert.  It should be apparent that no one knows as much or more about this subject than you do.  Certainly, you should be able to demonstrate that you know far more than your biggest competitor and this knowledge will play a key role in over taking them in the marketplace.  

Expertise. 

There is a fine line here between demonstrating that you are the subject matter expert and coming across as a know-it-all who the investors might feel is unmanageable.  No one can or does know everything, but do you know the product and the market, and can you answer any and all questions about your product that you get asked? 

Here’s an example: 

In the world of medical device sales, you have many salespeople calling on surgeons that have years of the highest level of education available. A surgeon will understand that it is not possible for a sales rep to know the intricacies of the type of surgery they perform anywhere near the level of knowledge that they possess. This is simply not doable, and the surgeon does not expect to rep to be able to acquire that level of knowledge. They do, however (and this is a big HOWEVER), expect the rep to know everything there is to know about the product they are selling.  That is where you want to be. Make sure that you do your homework, again and again and again, and then do it one more time to ensure there are no questions that an investor can ask about your product that you can’t answer. 

Remember that confidence comes with knowledge. Know all there is to know about your product and your confidence will soar.  This combination of confidence and knowledge is what will get more investors to take out the check book and strike a deal. 

For more information on raising capital, watch this video: 

https://www.youtube.com/watch?v=KEWlOP417uo