As part of Blackhawk’s close group of family and friends; and to set the record straight, I thought I’d share with you the Classic “deal killers” that we encounter when reviewing the more than 2,000 business plans submitted to us on the average a year
By “deal killers” I really mean the generic statements for you to avoid when submitting your “Elevator Pitch”
I hope this short list will better assist you fine tune your “Value Proposition” when approaching us for funding.
The following list is not exhaustive, but outlines a few scenarios in which we’d kill a deal in an instant
1. There is no competition.
Perhaps no other company sells a product substantially similar to yours, but this does not imply a lack of competition. Any substitute product, process or service that satisfies the same need as your business is a competitive solution. Stating that no competition exists reveals either a lack of research or imagination on your part. We interpret the lack of competition as evidence that the market is undesirable or having need of consumer education. Such a statement is an instant deal killer for us.
2. Company founders don’t have “skin in the game” and can’t inject capital but have invested $X worth of their time in the company.
We like to see that the founders of an entrepreneurial company seeking funding believe in their business enough to make investment and personal sacrifice to sustain its survival, but do not confuse the two. While foregone salary represents an economic cost of the venture to an entrepreneur, it is not an investment into the business. Investment translates to “cash” spent for costs related to starting and developing the business not sweat equity. If you have spent a significant amount to do this, please make sure to include the figure somewhere in the financial section of your business plan. If not, you are asking for trouble.
3. Our projections are very conservative, and we will break even or be profitable 1,2,3 years from today:
If you haven’t already generated profits and haven’t attracted enough clients to show us you’re actually running a business v/s just tinkering with ideas, you are most probably not fit for us. Track record for us is indeed key and we’d go on a limb and back an entrepreneur who made it big time and lost it all than funding someone who never generated profits and is still conceptualizing his/her thoughts. Ideas are a dime a dozen. All about execution.
4. Absence of information regarding how exactly you plan to execute
We like to know HOW you plan to execute. Business is WAR and if you don’t have a clear-cut execution plan ahead, we are going nowhere. Most entrepreneurs have no clue as to how they are going to execute or can’t flesh it out properly. A total deal killer
The list goes on and on. But if you can’t pass the above “acid test” there is a very little chance if any you’ll get funded. Good luck
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