During the past ten years, our firm’s investors have generally shifted their investment preferences toward later-stage firms, where the time to exit (i.e., realize a return) are less than with start-ups. Many of our investors have also asked us to evaluate making investments in smaller public companies, so-called “micro-caps.”1As a result, we have been exposed to presentations from many later-stage private, as well as smaller public companies. Without fail, I have seen even later-stage firms and public firms fail to meet their funding objectives if they stray away from the basic principles presented by the group.
No matter the size of the firm, it vitally important that all 12 areas be succinctly covered in meetings with investors—and that the suggestions for pre-meeting preparation, as well as post-meeting follow-up, are closely followed. To be sure, more mature companies have more to offer in terms of prior history and product performance, and they can offer additional market validation and more customer feedback than earlier-stage firms.
However, we repeatedly see presentations from later-stage firms that do not address the basic 12 areas and most commonly overaddress some areas with too much data, while omitting critical points that, in sum, leave investors unwilling to commit funds.