Sagacious Think

When preparing for outside financing, its important to understand that investors are investing as much in the team as the product.  So it behoves the team to understand where they stand in that dynamic.  Too often the focus is on the product.

I prepared this model, that I use with the companies I work with as an idea of how they fit in the scenario.   That upper-right hand corner is the ultimate goal, but the closer the company is to achieving that goal; probably the less funding required.  The more established the company, the less risky it is.  The idea is that the company has a product that is past the pilot stage and may be ready for production and is fully staffed with no missing gaps in key skills.  For companies to know and understand where there are gaps, and can not only acknowledge them but also identify their plans for closing their gaps is powerful and very convincing that this company is on track.  This is powerful message as it tells everyone that the management team understands the current state of the company and what they need to be successful.  The team understands the gaps, and has a plan to address them.

The same sort of insight into the status of the product is also required, and investors like to see what the company doing to move to that final square.  Teams get caught up in the idea that they have a great product, but the earlier the product the greater the risk and they should understand how investors view this dynamic.