Reasons Why You Did Not Secure the VC Money

Sometimes the truth can hurt. Here are several pitfalls you can avoid to better ensure you receive the funding you desire.

• Weak management with little or no depth or track record, or with a critical member of the team either weak or missing.

• Unrealistic valuation expectations.

• Control issues.

• Timing is not right. An important ingredient in the companys ability to execute its plan is missing. Company may be too far along or not far enough along to take advantage of the ramp up in sales and earnings.

• Failure to illustrate the compelling (growing, dominant and profitable) nature or dynamics of the business (or of the market in which it operates).

• Management doesnt know their stuff. Management did not fully appreciate or understand the market and industry (size and trends), competition (existing and anticipated), technology and/or capacity risks.

• The Business plan and projections and/or opportunity doesnt add up after completion of the due diligence.

• Requires too much, or too little, money to be of interest. The typical venture fund is seeking to back an enterprise that can produce a minimum of $20 million of revenue within 2-3 years.

• This is not a company, but rather a product. VCs typically do not invest in single-product companies.

• Owners not responsible to meeting, due diligence and information requests– waste of precious time.

The Grimes, McGovern & Associates team can help you secure the venture or bank financing you need by helping you get your house in order, prepare a business plan, review your presentation and make introductions. For a confidential review of your situation call us today, (301) 253-5016 or e-mail us at [email protected].

M & A Resource Library    Obtaining Finance

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Grimes, McGovern & Associates provides expert advice during all phases of a transaction. Contact us today for a confidential consultation: John McGovern, CEO, [email protected], (917) 881-6563 or Julie Bergman, VP, Newspaper Division, [email protected], (218) 230-8943.