Problems with Memorandum of Understanding and Heads of Agreement

These days, business agents, investment banks, accountants and many clients have come to believe that Memoranda of Understandings and Heads of Agreement are an essential part of the transaction documents.  They are not. There are enough problems with using a Memorandum of Agreement (“MoU”) or a Heads of Agreement (“HoA”) to seriously wonder if they should […]

Capital Raising: What VCs Do To You When It All Goes Wrong

Only one or two VC investments out of every ten ever come close to the elusive “10x” investment – the one that returns ten times the initial investment or more.  When your company is that elusive ten-bagger, everyone is happy with you. The problem for you arises when you are not the ten-bagger.  No matter how much […]

Venture_Capital Private_Equity

Capital Raising: Why You Might Not Want a Strategic Investor – Part One

Many a first-time entrepreneur is convinced that they must find a “strategic investor.”  Finding a “financial investor” will not suffice.  An investor who simply puts in money is not as good as one who will not only put in money, but also provide contacts, advice, manufacturing facilities, distribution channels, market clout and everything else that is needed to become a $100m revenue […]

Capital Raising: How VCs and Professional Investors Add Value to Your Company – Part Two

Invariably entrepreneurs seek to raise “smart money” – money that comes from investors who can also  can provide advice, contacts and assistance.  Professional investors often have these smarts and they can arrange introductions to strategic allies, help deal with recalcitrant suppliers or even smooth over issues with regulatory authorities or government. Usually VCs, PE companies or professional investors have […]

Capital Raising: How VCs and Professional Investors Add Value to Your Company – Part One

Funding your company is only part of the equation from good VCs and investors.  The other half of the equation is the way they add value to your company. These days, a lot of VCs, angels, PE executives and professional investors are themselves successful entrepreneurs.  This way, they get to distinguish themselves to you from […]

Capital Raising: How VCs and Professional Investors Source Deals

If you want investment, you have to get on the radar of potential investors. Fortunately for you, they need deals just as much as you need investment. Unfortunately for you, the fact that they need deals doesn’t mean they need yours.  There a hundreds of deals out there for them to look at.  That is why […]

Capital Raising: How VCs and Professional Investors Screen Your Deal

There’s a rule of thumb when pitching to VCs, PE companies and professional investors.  They ask you a lot of questions, but eighty per cent of their questions are designed to find out how you are going to lose their money. I once had something to do with the head of acquisitions for a Middle […]

Creating Value: Negotiation – Avoiding Neediness

Negotiating with big corporations often starts as a dream and ends as a nightmare.  Almost always, this is because you have demonstrated neediness. Neediness is most evident when small and mid-sized companies do their own negotiations.  It might be that a start-up needs this Fortune 500 company as a demonstration client or a cornerstone client. […]

Creating Value: Negotiation – Their Authority and Yours

You Want to be Speaking to the Organ Grinder, Not the Monkey

Have you ever negotiated to buy a new car only to have the salesman you are dealing with suddenly have to “take it to the manager” to have it approved?  Don’t get blindsided by this one in your corporate negotiations – you want to be speaking to the organ grinder, not the monkey. The “Authority Question” and […]

Capital Raising: Your Management Team – Part Two

It’s quite simple. The best idea in the world cannot succeed without a management team that can operate the company, get the business in the door and maintain a competitive position. That’s why venture capitalists and financiers are all obsessed by finding out about your team.  Their worst nightmare is to hand over their money […]