Investors: What Entrepreneurs Should Know Before Looking For Money
Chico Enterprise Record:
The heads of various venture capital groups and individual investors had a range of advice to give entrepreneurs looking for a cash injection.
The investors were specifically asked to give entrepreneurs their best pieces of advice during the recent North State Entrepreneurs, CEOs and Innovation Forum.
‘Put good people around you’ was the advice from Roger Akers of Akers Capital, a small Central Valley fund 
that specializes in technology, telecommunications and software investments. ‘You also need to demonstrate the path to profitability,’ which Akers said is something all investors want to see, even if the company isn’t there yet.
‘You don’t have to have the answer (about profitability) but if you know where you want to go, it’s better.’
Mark Zetter of Sacramento Angels suggested that entrepreneurs really look carefully at what they present to investors. ‘Someone, actually here in Chico, sent me a 10-megabyte video over e-mail. It would have taken forever to download it. Think about how you appear to investors.’
Zetter, who has participated in angel investing for 3 years and has helped 8 companies, said venture capital funds like his usually have guides on their Web sites that entrepreneurs should follow about submissions.
‘Follow the rules.’ Work hard before approaching an investor is what Jim Schraith of DFJ Frontier suggested.
‘Get as much work done before you come to see me.’ Schraith also said he appreciates an entrepreneur willing to suffer and sacrifice. Someone driving an expensive car means that he’s not willing to put his needs aside for the good of the company. ‘I like to see used furniture in an office, and someone not paying himself,” said Schraith, who describes DFJ Frontier’s focus as investing ‘anywhere but Silicon Valley.’
Do your homework on potential investors, suggested Harry Laswell of American River Ventures, an early stage fund that looks at Northern California frequently.
‘Learn something about the investor you’re thinking about approaching,’ said Laswell, suggesting that doing otherwise would waste the investor’s and the entrepreneur’s time. Discover if the investor has a specific focus on his investments, and if it doesn’t fit your need, it’s probably not wise to make an overture.
While no one should know a business like its founder, there are times when an entrepreneur can’t see down the road.
But a goal should be somewhat configured, said Steve Mills of DCA Capital Partners. ‘Entrepreneurs should know why you win, what’s compelling about your biz,’ said Mills, who specializes in late-stage opportunities and growth-oriented enterprises. ‘You should look at why your solution is superior to anyone’s on the market.’
Representatives of local business assistance programs also weighed in with advice for entrepreneurs and small business owners. They were asked to put their best advice in one comment.
Jim Goodwin, CEO of the Chico Chamber of Commerce, suggested that a business ‘get help before you need it.’
Bob Nash of Superior California Economic Development District suggested, ‘Be careful’ and weigh risks.
Kathy Schmitz of Tehama Job Training Center told listeners to ‘manage your work force as an asset.’
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