I don’t know where I heard this from, but ever since it has stuck. In fact just the other day I was in a conference call with a very wealthy angel investor and a business associate seeking to raise capital for his business. I had assisted in putting the projections together and he had the passion for the business. Guess how long it took before we got past the projections that took hours of time to create and on to the passion for the business? I think I counted 20 seconds.

It’s all about the people. People invest in people. So when you are building out that novel of a business plan that is complete with executive summary, balance sheets, cash flow statements, SWOT analysis, and on and on. Just know that the single most important piece of the puzzle is you. You are the one that is going to execute with your team on the vision that you articulate to your investors.

I had a very unique experience years ago working on one of the first deals of my young business career. A few of the most respected and wealthiest business people in Canada had decided to make a big bet (for me at the time, but not so big for them) on a business concept I was involved in. Sometime after that first round of financing I was visiting with one of these business people regarding their investment, and subsequent interest in a second round of investment. At this time, I labored with him and his team in updating the business plan and making sure everything was in order. Once completed, I brought this extensive plan to him full of pretty charts, nice pictures, and of course a five year forecast of the billions of dollars we were going to make together. He held the book in his hand, hefting it slightly and looked at me asking if the business plan was complete with no errors. I said that it was, and asked him if he had found any errors. He indicated that he didn’t know, because he had never read it. I was puzzled. This man had invested almost $1,000,000 into our business. Surely he had read the business plan prior to his investment. The answer was no. He made his investment purely on the people, not the plan.

In my opinion, passion is far more important than your projections. When you are pitching a deal you have to feel it, believe in it, dream about it, love it and live for it. Your passion will project to your audience and that will be more impressive than any numbers you put up on a powerpoint.

So the obvious question to ask after reading this post is, why bother with the projections? That would be the obvious thing to do given the projections take months (hopefully you take that kind of time) of research, study and careful thought. Projections and a business plan are the rite of passage, your ticket to play, unless of course you are talking to some friends, family or fools. A sophisticated investor wants to know that you put the time in and not flying by the seat of your pants. So for all of you who would be pitch men out there, my recommendation is to take the time to do the due diligence and let it fuel your passion.

Add A Comment

Subscribe to D Scott Abbott
Copyright© 2009