Unit 30 Entrepreneurs and Venture Capital listening 1e

Ed Coombes First of all investors are obsessed with two key things: competition and the revenues. With the competition, they want to know who is there at the moment? How are they going to react when this company comes into the market? Or if there is no one there, who is going to come there as well? Now this sends a signal out to the investor about whether the management really understand the market they're in, and how they're going to react in the future and the fact that they are a little bit focused on the future as well. So they can put in barriers to entry or what we call defend themselves. The other thing is, with revenues investors don't mind if a company, if it's a start-up, in the first two or three years is making a loss, because they are using the capital invested in them to achieve as great a market penetration as possible ... So the investor in that business plan when they are reading it is wanting to see when is the first revenue going to come in. How big is it going to be? Apart from those two chapters, there are chap, management are key. You tend to want to find people with past experience of their sector, you want to find out if there's any non­executive directors on board. They are very, very critical to young growth companies, but also to mature companies, because the world changes and everybody suffers from myopia, i.e. they can just see their own little spot. They need to be challenged because markets change, customers change, the company needs to change to address its market. Entrepreneurs tend to be very emotional, very focused, a lot of qualities which are paramount for starting a company, drive, etc., but they can get in the way of investors at a later stage in terms of the style of running the company, the attitude, the relationships between the new shareholder or potential investor/shareholder and the existing management.

…………… unable to stop thinking about something; too interested in or worried about something
…………… the main or central point of something, especially of attention or interest
…………… a problem, rule or situation that prevents sb from doing sth, or that makes sth impossible
…………… a movement into or through something or someone
…………… inability to see distant things clearly
……………… a person who makes money by starting or running businesses, especially when this involves taking financial risks
…………… more important than anything else