Show me the money!!! Are you ready to raise money for your startup? Leslie Mitts, Managing Practice Leader at the Wharton SBDC and Lead Advisor for the Wharton Venture Initiation Program, tells us that most entrepreneurs coming through her programs are focused on raising capital, even though there are higher priorities in many of their businesses. Since fresh dollars help drive the business engine, this is a natural entrepreneurial concern.
But are you ready to raise money? Going to investors before you are really ready can damage your reputation and may actually hinder future funding efforts. Team and a Dream uses a unique Fundability Diagnostic to help companies assess their strengths in four key areas: Team - This is the most frequently cited attribute examined by investors. Many investors will invest in an A-level team and a B-level product, but not the opposite. Having your Seed Team nailed is crucial. Traction - Showing momentum is a critical element to demonstrating progress and your ability to execute. Perceived Pain - Do people really need your product? Why? Will they need it in the future?
Product Eco-system - How does your product fit into existing and emerging landscapes? Who else is out there and how big will this market grow?
Find out what you need to succeed and discover your roadmap to getting there. Take the quiz below to see how well you might expect to score with investors. For each of the four sections outlined above, see which hurdles you can clear given the current state of your business.PROCEED WITH CAUTION: Only self-aware entrepreneurs should take these results seriously. ASSESSING YOUR TEAM
Part A:
If you or any member of your current team are not planning on being the CEO, give yourself two points and proceed to Part B.If someone on your team IS planning to continue on as CEO, then youÂ’ll need to answer yes to both of the next two questions in order to score two points; otherwise, take a zero.
Part B:Score one point for each answer.
Your score (0-5) is your Total Team Score. If you scored three or more, you pass the Team Hurdle.
TRACTIONScore one point for each item you can answer positively.
Your score (0-5) is your Total Traction Score.If you scored three or more, you pass the Traction Hurdle.
PERCEIVED PAINAward your Team the number of points indicated after each question that you answer positively.
Your score (0-5) is your Total Perceived Pain Score. If you scored three or more, you pass the Perceived Pain Hurdle.PRODUCT ECO-SYSTEMScore the stated number of points for each item you can answer positively.
Your score of (-1 to 4) is your Total Product Eco-System Score.If you scored three or more, you pass the Product Eco-System Hurdle.Now that you have completed the scoring, we shall take a look at how “fundable” your company is. Before we do, it’s important to realize that this is a snapshot in time. If you are not satisfied with your score, there are plenty of things you can do to improve it. I’ve seen many of my clients make tremendous progress along these dimensions by extending their team, focusing on sales or tweaking their offering.
YOUR FUNDABILITY RATING:
Number of Hurdles Cleared: None
IMPLICATIONIf you received this score and hope to receive funding, then you have a lot of work to do. Perhaps you just know you want to start a business and are looking for ideas. If so, keep these criteria in mind as you formulate your plans. If you already have a business concept, you should think long and hard about “re-conceiving” some elements of it to improve your scores.Many perfectly good “lifestyle” businesses may fall into this scale – you just can’t get funding for them.
Number of Hurdles Cleared: One
IMPLICATIONFunding from your rich uncle may be possible
Number of Hurdles Cleared: two
IMPLICATIONFunding from family and friends network may be possible
Number of Hurdles Cleared: three
IMPLICATIONProfessional investors will consider this, but youÂ’ll need to be prepared to explain how youÂ’ll address your gaps.
Number of Hurdles Cleared: all four
IMPLICATIONPut the finishing touches on your business plan and hit the funding trail!You will have the best chances of success in fund-raising if investors see that you can clear the hurdles in all four areas.
NOTE: Team and a Dream offers a professional version of this assessment that offers additional detail and examines nuances that arenÂ’t possible to convey in a simple quiz. If you have an interest in the professional assessment, please visit us at http://www.teamandadream.com/contactus.htm
Contact Information:http://www.teamandadream.comskip@teamandadream.com(610) 687-9195Copyright (c) 2005, All rights reserved by Post Destiny, Inc. d/b/a Team and a Dream(SM)