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You’re a pre-revenue start-up founder and you have an opportunity to share your plans with a promising potential investor.
Exciting stuff!! … and let’s make sure you can make the most of this opportunity.
The School of Hard-Knocks teaches that 3 elements of your plan are Critical to moving your audience from “potential investor” to “check-writing shareholder” ( = $$$):
1. Motivating… but Realistic… milestones for product development, production & launch
2. Detailed MONTHLY cash projections
3. Detailed Regulatory Pathway
Here are some specifics on the 3 Critical Elements:
1. Motivating… but Realistic… milestones
What could be more eye-catching for potential investors than financials that show immediate and profitable sales success?
…But will they believe it? … or will eyebrows get raised along with suspicions that there may be other unrealistic things buried in your plan?
Your chances of convincing a target investor that you know what you’re doing, and that your team can be counted on, are far greater if your projections show a balance of upside opportunity and realistic problem-solving.
Where have you planned to resolve upcoming challenges?
Where will competence and hard work make Things go Right?
This level of realism can increase confidence in your plans dramatically.
2. Detailed MONTHLY projections
Yes – annualized projections make a neater spreadsheet that fits nicely on a PowerPoint slide…
... But can you assure your audience that you won’t run out of cash by month #6?
Monthly projections require more time & effort… and usually don’t fit well on a slide… but they help demonstrate that your cashflow is well thought-out and allow your projection’s assumptions to be discussed.
3. Detailed Regulatory Pathway
In today’s tough-to-find-funding world, the regulatory requirements for medical device technologies can be a key detractor compared to other opportunities that are chasing the same investment dollars.
By sharing the details of your regulatory path, you will show that your team has the knowledge and capability of handling this challenge.
Whether your technology is Class I, II or III, investors need to know that you have anticipated and built the needed resources into your plan.
Building a financial plan that excels in these 3 elements… and then communicating that plan effectively… will lead to the highest opportunity for success!
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