“When someone takes a meeting with you to hear your idea, there is a lot more you can get out of it than just the money,” said McKean. “You can get a relationship out of it, you can get customer referrals, but I think the most valuable thing you can get out of it is feedback."
“I invest in people. If you are passionate about your business, if you invested your own money in it and went to your mom and she invested her 401k, that means a lot to me. I also have a car ride test, if I don’t want to share a 90 minute car ride with you I probably don’t want to invest,” added Ginsburg. It goes both ways and you have to like your investor as well. “You are in the trenches with your investor.”
The best investors could be retired executives in your industry, Krinzman said. Tomas added it is important to allocate resources for a good lawyer and other professional services. “Some will disagree with me, but debt is cheaper than equity,” he added. “Bootstrap as much as you can.”
During the bootcamp, some entrepreneurs in the audience pitched their businesses while others came armed with questions for the experts. It’s important to note that in the Business Plan Challenge, all types of businesses — from high-growth ventures to small, local businesses — are welcome and are judged by how well you convey your strategy to make it a success in your market.
More advice from the panel:
• Cut the jargon. Explain your business in simple language. Use analogies to simplify.
• Read Starting Gate and check out events and who’s attending in your industry. Look at speakers’ bios. Follow them on Twitter — it shows you are aggressive.
• Sometimes starting your plan with an example or two will help explain it to the reader. Tell a story — at the end of the day businesses are about the story, and why this business is important, Krinzman said.
• On financials (yes, include a financial section in your Business Plan Challenge entry — you might want to use your supplemental page for this), show that you understand what it costs to find, acquire and keep a customer. Source your assumptions where appropriate, Krinzman said. “Have a methodology, have a thought process, outline your assumptions and where they are rooted and you are away ahead of the game,” Ginsburg added.
• Be realistic on the financials. If you are showing 90 percent net three years out, we’re not going to believe you, McKean said. It has to pass the sanity test.
• If you have already raised capital, it validates your business plan. Definitely include it in your plan, said Ginsburg. Customers are even better, added McKean.
• Most investors are looking for a company, not a product. If you have a single product with plans for additional products, you could show your growth strategy with bullet points on the future products, Krinzman said.
• Books to read: McKean recommended Great by Choice by Jim Collins, Mastering the Rockefeller Habits by Verne Harish, and Playing to Win by AG Lafley on integrating strategy and execution. Krinzman recommends reading blogs of celebrity investors like Fred Wilson, Brad Feld and Mark Suster. “Those are some of the guys that write daily, are brilliant, and will give you an inside point of view on growing a business, thriving in business and what investors look for.” She also recommends Inc. magazine.
• Favorite entrepreneur? Ray Kroc, hands down, said Ginsburg. “That guy got involved with the McDonald’s brothers in his mid-40s. You can do it at any age. You don’t have to be 19 to start a successful business.”
Questions about the Business Plan Challenge? Read more about the community-wide contest, co-sponsored by FIU’s Pino Global Entrepreneurship Center, on MiamiHerald.com/challenge and follow me on Twitter @ndahlberg