Comments on: Address the five risks to increase your valuation.

By: Gene Konstant

Gene Konstant — Wed, 09 May 2012 17:04:52 +0000

John Huston’s point is right on the money. If you can do everything to start and grow a business except sell what you do … you’re dead. If you can sell, that income can pay to solve almost any other problem. [A generality to be sure but with a lot of truth in it.]

Naresh, I’m afriad, has never been given under-standing of the real function of a business plan.

By: John Huston

John Huston — Tue, 20 Mar 2012 16:34:36 +0000

A review of all our past total write-offs (6 of our 35 portfolio companies) reveals that the risk we under-estimated in virtually EVERY case was the obvious high level of “Financing Risk” (in hindsight). That’s why we now provide all our entrepreneurs a document that forces them to answer this question……….”So how many people on your sales team must get into whose office how many times and say what before you have enough revenues to achieve Survival Cash Flow Break Even?” This uncovers how many of the essential new customers have not even been called on/connected with yet!

Second………we’ve really struggled to get comfortable with any venture (other than a medical device) which must raise VC funding to achieve CFBE. Why take that risk today when there are so many capital efficient ventures out there? (Of course the answer is because the company shows huge promise, and could even be an IPO……but in Ohio we would never presume an IPO exit)

……….All the Best…….Cheers, J.

By: Dave Key

Dave Key — Tue, 20 Mar 2012 15:46:43 +0000

Classic, but often forgotten. If all entrepreneurs and investors relentlessness assessed themselves on these 5 criteria we’d have more business successes.

By: Naresh

Naresh — Tue, 20 Mar 2012 15:45:57 +0000

Dave
I remember this advice from you. I mentioned it to an investor/entrepreneur. He wanted to add “business plan” as a sixth necessity. Any thoughts? I personally dont give much value to a detailed business plan because it usually becomes obsolete the minute it is printed.