November 30, 1999 in ATDC News

Hot Tips from an Angel

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Charlie Paparelli drew a huge huge crowd recently at ATDC where he spoke on how to get to a second investor meeting.  Charlie entertained and spoke plainly about the most critical aspects to building a successful and fundable business.  Charlie also shared his deep passion for entrepreneurship, quoting Shakespeare "to thine own self be-true."  He shared how Richard Brock brought him out of the boring world of being a CPA doing paid management work to his true passion of entrepreneurship.  He encouraged all entrepreneurs in the group and applauded their efforts.

The #1 hot tip was in Charlies’s own words, I’m asking myself during that first meeting "Do I think he can do it?" In other words, you’re selling yourself.  You’re selling investors the confidence you can pull it off.  In addition to selling yourself have have to prepare to sell the opportunity, the business and the team.

Charlie shared a simple but important two by two.  On the vertical was the "fog factor", defined as the uncertainly of your market and its adoption.   The horizontal was time to money.   Getting a referenceable customer is one of the surest ways to reduce your company’s fog factor when trying to get an investor on board.  And of course, a paying customer who demonstrates your early business model does not hurt your ability to show you can make an investor money.  His second major hot tip – People and Market Focus reduce time to investment.

Charlie also emphasized the importance of qualifying prospective investors.  He noted that the best salespeople are also the best qualifiers.  Their time is their most valuable treasure and raising money is a sales process.  How do you qualify and how do you get to investors?  First of all, you need to know the market of investors.  On the one spectrum are the friends and family and wealthy individuals, what he calls the ignorant and the uninformed.  On the other are the informed and experienced, the VC.  If you’re qualified to get VC money, you’re pursuing a small piece of a very large pie vs. on the other spectrum, likely to keep a larger piece of a small pie.

Charlie was adamant that investors do not respond to cold-calls, and they don’t.   He shared a chart of all the key organizations and people that should connect you to investors if you have the right value-add partners.  These include lawyers and other expert professionals.  And of course, Charlie kindly and rightly put ATDC on his chart – thanks Charlie – I just happened to set up 5 investor meetings with Seven Rosen funds last week.

Charlie is  a great contributor to our community.  He tells informative stories and makes them fun. Despite some of these businesses being "boring" as your sales tax company they sure are wildly successful.

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