Entrepreneurs need an edge

As entrepreneurs, we often struggle in attracting investors to our firms. Despite our best efforts to communicate the important issues, we are frequently left to question the criteria that investors use in making their investment choices.

By Gary Williams
Brigham Young University

http://deseretnews.com/dn/view/0,1249,590037951,00.html

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(For an excellent book ("Smartups" by Rob Ryan ) on how to build a successful company: http://www.entrepreneur-america.com/

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Communicating the value of our businesses in an investment world cluttered with entrepreneurial noise reminds me of a Rich Tennant cartoon. In the illustration, an anxious entrepreneur is seated across the desk from a business professional who delivers the following comment, "I appreciate you sharing your dreams and wishes for starting your own pool and spa business, but maybe I should explain more fully what we at the Make-A-Wish Foundation are all about."

Recently, 99 college-age business teams at Brigham Young University competed for several thousand dollars in awards and the exposure that top selection would afford to their enterprises. The competition involved the submission of a three-page document, outlining key aspects of the business. Summaries were judged by a group of investment and business professionals.

Each team was asked to provide:

* A summary of the business or idea in two or three sentences.

* The business concept and model and a brief review of the business strategy.

* An analysis of the market and potential customers.

* The business’s competitive advantages and differentiation from competitors.

* A team overview profiling team members, advisers and mentors.

As the judges reviewed each plan, I noticed that additional information was critical to the selection of the "winners." The investors were looking for something else, the edge that might make a given company succeed. Following is a glimpse into the selection process and the additional criteria that seemed to make the difference.

* The overall quality of the submission was critical. Did the submission have a professional appearance? Was it well-written? Did it show time and effort?

* Related to the quality of the written submission was the style of writing. The businesses that were selected used a writing style that I would describe as factual, confident and rational as opposed to argumentative. They utilized supporting evidence that was independently verifiable to back up their claims.

* Did the idea fit the resource, team and environment? For example, if the business required significant capital, did the team have the capability of attracting and managing the proposed investment?

* Was the business scalable?

* Was the business an idea or product looking for a market? The judges felt that a business looking to solve some pain in the market and then developing a product or service to satisfy that pain had a better chance of succeeding.

Review your business documents against the above criteria. Remember, knowing what creates the edge as you seek investors will improve your chances of success.

Gary Williams is affiliated with the BYU Center for Entrepreneurship. He can be reached via e-mail at .