Entrepreneur’s VC Pitch

28 Jun 2004

E M E R G I C
. o r g: June 29, 2004 Archives

As someone who works for a young biotech firm, I enjoy reading about the do’s and don’ts of entrepeneurism and the inevitable search for extra cash infusi
on.

– What is unique about your product/service?

I think this is important. If you cannot consisely state (on demand, that is) your service and it’s differentiating attributes you’re probably in for trou
ble.

– Who actually writes you the check?

I think this an important thing to realize. Often the person writing the cheque is not the true end-user of your service. Keep in mind that the end-user
will always want additional features, but the person with the cheque-book isn’t as willing to pay.

– Are you selling vitamins, aspirin or antibiotics? (I.e. a luxury, a nice-to-have, or a need-to-have)

Important as well. Are you selling commodity software targeting a fairly large market, SPAM control for example ? or are you targeting a specific niche m
arket where your end-users have a recognized need for _something like_ your service. Is your software flexible enough to satisfy a customers requirements
without requiring substantial post-sales integration ? Do you really know what these requirements are ?

**
12) WHO IS YOUR COMPETITION?
– Who is your existing & likely competition?
– Who is adjacent to you (in the market) that could enter your market (and compete) or could be a co-opted partner?
– What are their strengths/weaknesses?
– Why are you different?
**

All important points. You always have competition, if you don’t than your market is likely non-existant or not yet mature enough. Microsoft is a constant
threat in most application spaces so it’s important to clearly differentiate yourself and position your services in such a way that makes it difficult for
competitors to duplicate. Open source is also an emerging threat. I’m a proponent of the open source community and see the potential for integration. O
SS is definately not something to fear and over time will being to play an even greater role in commercial software.

**
15) OTHER
– What assumptions are key to the success of the business?
– What “gotchas” could change the business overnight? New technologies, new market entrants, change in standards or regulations?
– What are your companys weak links?
**

Perhaps the most important points of all. During the course of operating a business, you’re always going to have to operate under some form of an assumpti
on. Business success is related to one’s ability to anticipate change and be in the right place at the right time. Mark Cuban made billions of dollars of
f of a fairly simple idea and an incredible enthusiasm for technology and learning.

I think you always have to be aware of what impacts potential market changes could have on your business. Evaluate the different scenarios and plan accord
ingly.

Every company has weak links. As one of my university professors often said, Not only do you have to make sure you have the right people on the bus, b
ut you have to ensure they’re in the right seat. So true, people need motivation and if they aren’t in the right position or feel like they’re not g
etting the support they need, motivation isn’t going to be high.

That’s my rant. Until I start my own company, I’ll leave VC and investment management to someone else. I’ll concentrate on software development for the
time being.