I was a panellist at an Investor Summit in Australia last week watching up-and-coming entrepreneurs present in 5 minutes their business and investment opportunities. The panellists were made up of venture capitalists (VCs), investment bankers and deal makers. We have all seen presentations over the years by hopefuls wishing to raise finance or complete some form of transaction. Presenting your case in 5 minutes is daunting, even for the most experienced of presenters. Nevertheless, I think it’s a wonderful way to get clarity around a business concept. If you cannot articulate the key messages and vision in that time you have a real problem with yourself and your business.
One of the biggest problems at this event was that our presenters did not understand who the panellists really were. They had not researched or thought about them. Worse still, some of the presenters thought that the panellists were just interested in money, they had not realised that we all had strong scientific backgrounds and were in a position to ask cutting questions on the feasibility of, and risks involved in, taking their projects forward. Furthermore, many of the presenters made the mistake of telling the panellists something that they already knew and was common knowledge – such as total market size, which, in the end, is pure non-information to most VCs, who want to know what size of that market the business is going to capture or grow to, and how. They want to know how any investment is going to add value, and what milestone(s) can be achieved.
"Some of the more successful budding entrepreneurs, besides having a strong commercial case and a clear business vision backed up with a realistic business plan, had another important ingredient, and probably one more crucial than anything else – pure passion and determination.
The majority of those presenting had businesses too early for seed capital, and these were urged to go back to their companies and continue to get government or research/university funding. This was in their best interests because it was non-dilutive from a shareholder perspective, and would allow the research to reach a point at which it was ready for true commercialisation, i.e. sufficiently de-risked and at some stage of basic proof-of-concept.
There was no doubt that some of these presenters had something going for them, but others, frankly, did not. Some of the more successful budding entrepreneurs, besides having a strong commercial case and a clear business vision backed up with a realistic business plan, had another important ingredient, and probably one more crucial than anything else – pure passion and determination. These will be the successful ones!
Fintan Walton Chief Executive Officer PharmaVentures Ltd