You know what’s funny about my business?
The wide variety of industries and situations I get called into that differ significantly on the surface but share the same principles.
Hazardous Materials Storage, Plastics and fiber optics manufacturing, Logistics, and Consulting.
Owners came to me on all of these in the past week.
All had the same question.
Can I raise money or sell given where my business stands?
These are confidential conversations so I will not share there the details.
But I will tell you in one of the proposals what I really liked.
First, the owner wasn’t saying the usual BS of “This is a $X hundred billion market and if we just get 1% of that then this opportunity is 10,000x for the money I’m looking to raise.”
(As an aside, I once saw 17 pitches with some variety of that hype crap at a summit and not one raised $1 of funding – go figure.)
Second, the owner listed the significant risks on one slide and how he mitigates them.
Third, the owner didn’t do a dog and pony show around his financial projections but rather grounded them in reality by showing what would happen to the investment in 3 different scenarios.
He was communicating to the investor… “hey I’m serious and do not want to waste your time. I know you have options of where to invest your money. Let me tell you what that would look like if you invested with me if any of these scenarios end up happening.”
Let me ask you… which do you think resonates more? 1% of the Wizard of Oz BS or 100% of the real world and how it works?
Anyways, thought I would share these observations with you as we start the new week and month.
What do you think?
Am I being unfair to Dorothy, the Lion and other hype clowns?
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George Sotiropoulos contrasts the common “1% of a billion dollar market” pitch that fails to raise funding with a real investor proposal that shows what investors actually want to see.
It listed risks with mitigations, presented three financial scenarios instead of projections, and communicated respect for the investor’s alternatives. The article argues that grounded, honest positioning attracts serious investors while hype and fantasy repel them.