Investors focus on early-stage equity investments that
have 5 common characteristics:
Generally, investments are made in the first institutional
or A round. This round, normally ranging between $3 Million and
$10 Million, is typically sought after conventional seed or angel
rounds have been realized.
|WHAT THEY SAY...
||WHAT THEY REALLY MEAN...
|We conservatively project
||We read a book that said we had to be a $50 Million
company in five years, and we reverse-engineered the numbers.
|We took our best revenue estimate and divided
|We accidentally divided by .05.
|We project a 10% margin.
||We did not modify any of the assumptions in the
business plan template that we downloaded from the Internet.
|The project is 98% complete.
||To complete the remaining 2% will take as long
as it took to Create the initial 98% but will cost twice as
|Our business model is proven.
if you take the evidence from the past week for
the best of of our 50 locations and extrapolate if for all the
|We have a six-month lead.
||We tried not to find out how many other people
also have a six-month lead.
|We only need a 10% market share.
||So do the other 50 entrants getting funded.
|Customers are clamoring for our product.
||We have not yet asked them to pay for it. Also,
all of our customers are relatives.
|We are the low-cost solution.
||We have not produced anything yet, but we are
confident that we will be able to be.
|We have no competition.
||Only IBM, Microsoft, Netscape, and Sun have announced
Plans to enter the business.
|Our management team has a great deal of experience...
||...consuming the product or service.
|A select group of investors is considering the
||We mailed a copy to everyone in Pratt's Guide.
|We seek a value-added investor.
||We are looking for a passive, dumb-as-rocks investor
|If you invest on our terms, you earn a 68% IRR.
||If everything that could ever conceivably go right
does go right, you might get your money back.