News - Inside Entrepreneurship: Use skill, not data, to land funding

"Q: My partner and I are trying to raise $2 million. During presentations the investors are very supportive until we get to our revenue projections. They just don't believe we can grow that fast with only $2 million. The more I try to convince them, the more push-back I get. I can change the numbers, but I'm not sure that will satisfy them either. How do I convince them I'm right?"

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A: Trite but true, getting a business safely off the ground is in many ways like flying a plane. Both pursuits offer great excitement but also considerable risks to everyone on board, especially the high fliers.

A flying instructor once told me that good pilots fly with humility and finesse. No matter how skilled the pilot, changing weather conditions may require a different course or even a delayed takeoff.

Investors know your projections present the best-case, sunny-skies scenario. I know of one early-stage investor who automatically cuts projected revenue in half, doubles expenses and increases the time it takes to get the proposed product to market.

While this exercise is extremely frustrating to entrepreneurs, the investor's real objective is to test the management team's mind-set."

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For more information, visit www.EvanCarmichael.com.