4.3 Describe Your Track Record
Your Management Track Record
Risk capital investors will, of course, be interested in how well your
company is being managed today. But be prepared: they will also want to
know how well things went in the past. The investor has the right to know
when you have faced problems, how they were caused, how they were resolved
and what steps you have taken so they won't happen again. The fact that
you've survived and recovered from earlier problems shows that you and
your team have experience, and are resilient and open to change.
- If your team has a healthy track record...
- ... highlight your success and use it to convince potential investors
that you have the credentials for a successful management team.
-
- If your track record has been below par...
- ... take the opportunity to show investors that you recognize your
weaknesses and explain how you plan to correct the situation.
-
- If you're launching a new business...
- ... emphasize your team members' performance with previous businesses.
Key Functions
There are several key functions that must be managed to keep any business
on track and working toward success. Investors will want to know how
well you perform each of them.
Think for a moment about the distinct areas that have to be managed
in your own company. If you like, type them in the following table.
Then compare your list of key functions with ours.
Key Functions Investors Care About
Do I have to let investors know if my last business wasn't successful?
It's better to be honest about previous situations. Investors
will likely find out anyway. If you indicate that you've learned
from earlier mistakes (whether or not you were directly responsible),
potential investors will probably be more reassured about your
management capabilities.
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