Venture Capitalists Adopt Conservative Stance in Difficult Times

Start ups ain't what they used to be. . .
It's been a while since easy money was easy. The days of nailing an investment round with a clever idea and a quick pitch to a VC or investment banker flush with cash disappeared to the same bright Camelot as did all the weekend symposiums teaching the perfect elevator speech. There was market tolerance for investment risk that simply doesn't exist today. If you think funding will flow your way because your concept is irresistibly brilliant, think again. These days you need more - a lot more. The investment landscape was different in the last century. Between biotech, dotcoms and internet hardware hucksters, there was so much opportunity on hand that failure of most start-ups was acceptable. One Yahoo made up for six bad shots. Rapid growth drove short-term investment strategies. In their haste to claim market share, Investors often plunged headfirst, then left the party fast, moving on. Concepts trumped execution.
So failure is okay, you may ask? In case you haven't heard the news from Lehman, those days are over.
It isn't as if there isn't any cash - there is. But investors are long past the thrill of one night stands or starting companies on their own. What they're looking for these days is reliability and commitment. Quality trumps quantity as big money targets fewer opportunities, but sticks with them longer. If you expect to get hitched, you'd better have a track record, more than a story, and mostly, a company already in business.
So, after borrowing from your 401K, dad, mom, relatives and friends to get started, what's next?
Foresight is key: To get the investment pump primed, at a bare minimum you need a 'tent stake' business plan - and a solid one, not some pie-in-the-sky fluff - that holds up under critical eyes, along with proof that you've worked your plan in some capacity. After that, getting customers, a couple quick wins, growing interest, market buzz, all leading to your well-executed strategic response to the market is what keeps the money flowing. Today's investments are staged. If you can't communicate a credible plan for growth, you won't grow - simple.
Your back office strategy has to turn heads as well. Investors expect you to think like the big boys. How do you rationalize expansion in corporate systems like financial, quality, CRM, ERP, distribution, production, etc? What do these critical functions look like today? How are you planning for evolution? What are the trigger points for adding people, taking on cost? Have you anticipated stable, self-sustaining conditions in your business that set the stage for vertical markets or international expansion? Investors committed to the long-term demand sustainability in every aspect of your business.
A winning technology or brilliant idea is just the beginning. Partnering with experts like Thomas Financial Services, LLC, www.thomasfinancialsvcs.com who specialize in connecting you with the investment community, can get you off the launch pad faster, get you to market in time to claim the top of the hill. Business insight helps you tell a better story, build a bullet-proof plan, makes you a better company. Of course, connecting companies with investors is more than just tuning up an enterprise; Playing from the money side, savvy investors rely on such experts to offer insightful, fast, third-party analysis of emerging opportunities and the people who run them.
Great ideas, poorly executed, usually fail. Mediocre ideas, perfectly executed, tend to turn into something big. It's no secret; Winners keep winning. Success must be institutionalized to be sustainable. Help is around the corner. Embrace it. Times have changed. Growth is slower. Investors insist on long-term wins. You must too.

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Thomas Financial Services LLC, Small Business Consulting connects emerging companies with the investment community. In addition TFS provides fast analysis of operational competencies in any company targeted for an investment round. Thomas Mezger, CEO, tmezger@thomasfinancialsvcs.com and John Sawinski, SVP, jsawinski@thomasfinancialsvcs.com bring over sixty years of international business development experience to get you to the next step.

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