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Articles:

  How to Request Capital from the Professional Investor, Whitney Johns Martin, TWVF co-founder
 

Peer Power: An entrepreneur's guide to the groups, Valerie Freeman, TWVF co-founder

 
 

Resources:

 

National Organizations - women-focused

 

Regional Organizations - women-focused

 

Government Resources - general and women-focused

 
 
   
 

Articles:

   
 
HOW TO REQUEST CAPITAL FROM THE PROFESSIONAL INVESTOR
 

Prepared by Whitney Johns Martin, managing member
Capital Across America Texas, LLC

 
General Partner for the
 
Texas Women Ventures Fund
   
  STEP ONE:
 

Send a brief Investment Summary that is so compelling that it makes us anxious to read your full business plan. Otherwise, you may not get to the next step!

Remember your audience when writing the Investment Summary. You need to appeal to new investors that may or may not know anything about your company or your offer. Most people want to tell us all about their business and nothing about the deal . At first blush, all we want to know about is the deal to determine whether your company matches our profile.

If your company matches our profile, then we are interested to learn more about your business. So Step One, start with an Investment Summary that tells us quickly and succinctly about the deal . Then, you can send the full business plan upon request.

Remember to make your summary COMPELLING TO AN OUTSIDER. Convince me why I should use my scarce capital to invest in your company - one out of hundreds to chose from! Make sure your investment summary includes the following critical elements - which are geared toward the investor reader:

   
   
Concept overview : This should be very brief and broad and should include highlight of product/service, business stage, basic history and sales and customer information and forecast.
   
   
How much money and what type of investment ? This paragraph should describe the offer in terms of dollars sought and the type of investment (equity vs. preferred stock vs. debt). Tell us how much of this you have raised and describe any prior outside investments. Tell us who has invested in your company; you can either list names if well known or define them as to type such as strategic, angel or founders.
   
   
Tell us what you plan to do with the money : Investors want to know what you plan to do with the money - buy equipment, add employees, buy another business, conduct R&D, etc. Be specific. Explain how this new money will make your company grow. Make sure you tie your projections into the pro forma section in the forthcoming business plan.
   
 
What type of return can I expect ? All investors want to know what's in it for them. Tell them up front; don't make them dig through the pro forma section to figure this out! Based on the new money and the attendant growth, tell how the company's value will increase. Then, explain your exit strategy on how to reap this increased value. Do you plan to merge, sell or go public? When? This needs to be addressed in the executive summary. If not, outside investors will not see a way to make money by investing in your deal.
   
 
Give me compelling reasons why I should invest in you and your company . Investors have many opportunities to invest their money in what appears to be very good companies. Investors need to believe that you have assembled the right management team - one that can deliver the goods so to speak. Demonstrate why you and your management team can implement the business strategy and manage this company through high growth. Show us your abilities, skills, prior experience (especially building companies), business networks, management style and industry credentials and awards.
   
   
Convince me that right now is the right time : Points 1-5 above will be moot if you don't convince me that right now is the right time to invest. Make sure to convince that now -- not later, not yesterday-- is the time to invest in your deal. Also, your request should match the life cycle of your business. For example, mezzanine debt does not work for startup companies but can for later stage companies with a profitable track record. Most funds specialize in investing at certain stages of business growth, so it helps to know your audience.
 
   
 
  STEP TWO:
 

Upon request, send us the complete business plan. Hire outside professional help if you are not a skilled writer or you are not comfortable with financial modeling. A poorly written business plan can cost you millions in potential investment dollars!

   
  Make sure the full plan includes at least this much information (in your preferred order):
   
 
Investment Summary (see Step One above)
Company Mission and History
Products/Services - tell us if you have registered brands, patents, proprietary products or services
Marketplace - size and scope; where your company fits
Manufacturing Capacity/Operations and Distribution Channels
Sourcing and Supply - especially any critical outsourced functions
Customers - brag if you have recognizable names or Fortune 500 customers
Competition - diagram how your company compares to the competition
Management and Organization - diagram your organizational chart; highlight biographical information that demonstrates that this team can grow this company; highlight members of the board of directors and your advisory boards, especially members of a scientific advisory board
Financial Analysis and Projections
 
Include 5 year forecasts - prepare integrated balance sheet, income and cash flow statements
Include a text summary of the financial forecasts that highlight performance over the five years, use of percentages is helpful
Use text to clearly indicate major shifts, i.e. improved margins due to capital available to buy raw materials in bulk
Include historical financial data
Include text summary to highlight any unique aspect or explain any problem areas; deal head-on with tough issues
   
Deal Structure and Use of Proceeds - be specific about how you are going to use this new money
Exit Strategy - if you know names of potential acquirers, list them
Investment Considerations - tell us of all the benefits investors receive such as board positions
Appendices
 
Product/Service list
Brochures
Press releases and coverage
Awards
Customer or supplier letters of recommendation
Backlog list or work
Certifications, ISO status or other such relevant information
Resumes
   
 

While the above list is not exhaustive, it is thorough. Be careful not to overdue the business plan. We only have a limited amount of time to read your plan. Use clear and concise sentences and remember -- pictures and graphs are worth a thousand words.

 
  STEP THREE:
 

Be prepared to answer in depth questions about anything in your investment summary, your business plan with appendix, or your company. Make sure it all ties together. If you change your assumptions on how much money you wish to raise, make sure you also change your financial projections.

 
  STEP FOUR:
 

Hopefully you were successful in attracting an outsider to seriously consider your company. What's next? In the language of venture capitalists, the dog and pony show follows. That's the time for you to impress the investor with your presentation skills and knowledge of your company. These presentations involve the senior management team and often last twenty to sixty minutes and are followed by a question and answer session.

 
   
 
 
   
   Resources:
   
   
  National Organizations - women-focused
   
 

Center for Women's Business Research ( www.womensbusinessresearch.org )

 

The Center For Women's Business Research, founded as the National Foundation for Women Business Owners, is the premier source of knowledge about women business owners and their enterprises worldwide. This non-profit is located in Washington, DC.

   
  Count-Me-In ( www.count-me-in.org )
 

Count Me In is an online micro-lender that uses a women-friendly credit scoring system to make loans of $500-$10,000. These loans are available to women across the United States for that all-important first business loan.

The National Association of Women Business Owners (NAWBO) propels women entrepreneurs into economic, social and political spheres of power worldwide. Headquartered in the Washington, DC metropolitan area, NAWBO is the only dues-based national organization representing the interests of all women entrepreneurs in all types of businesses. The organization currently has over 75 chapters and is affiliated with a global organization represented in 35 countries.

   
 

National Association of Women Business Owners (NAWBO) ( www.nawbo.org )

 

NAWBO is the only dues-based national organization representing the interests of all women entrepreneurs in all industries. Their mission is to propel women entrepreneurs into economic, social and political spheres of power worldwide. The association has over 8,000 members in nearly 80 chapters nationwide, and is affiliated with Les Femmes Chefs d'Entreprises Mondiales (World Association of Women Entrepreneurs) in 35 countries . This non-profit's national office is in the Washington, DC area.

   
  The Committee of 200 ( www.c200.org )
 

The Committee of 200 is the professional organization of women entrepreneurs and corporate leaders running large companies or divisions. The organization capitalizes on the power, success and influence of businesswomen in the global economy. Membership is by invitation only.

   
 

Springboard Enterprises ( www.springboardenterprises.org )

 

Springboard is a national not-for-profit organization dedicated to accelerating women's access to the equity markets. The organization produces programs that educate, showcase and support entrepreneurs as they seek equity capital and grow their companies. To date, Springboard has hosted over 14 venture forums for women resulting in over $2 billion in capital raised.

   
  Women Presidents' Organization ( www.womenpresidentsorg.com )
 

The Women Presidents' Organization (WPO) is a non-profit membership organization for a select group of women presidents who have guided their businesses to at least $2 million in annual sales (or $1 million for a service-based business). Participation is by invitation only.

   
  Women's Business Enterprises National Council ( www.wbenc.org )
 

The Women's Business Enterprise National Council (WBENC, pronounced "wee-bank) is dedicated to enhancing opportunities for women's business enterprises in America's major business markets. In partnership with women's business organizations throughout the United States, WBENC provides access to a national standard of certification and provides information on certified women's businesses to purchasing managers through an Internet database -- WBENCLink.

   
 

Women's Leadership Exchange ( www.womensleadershipexchange.com )

 

The Women's Leadership Exchange (WLE) offers all-day business conferences for the established woman business owner. WLE provides knowledge, tools and connections to help women grow their businesses.

   
 
   
   
 
   
  Regional Organizations - women-focused
   
 

Dallas-Ft. Worth Chapter of NAWBO ( www.nawbotx.org )

 

As the voice for women business owners, the National Association of Women Business Owners (NAWBO) attracts, supports and motivates women entrepreneurs through dynamic programming, committed and influential corporate partners, financial strength and professionalism. The DFW chapter holds monthly meetings across north Texas and offers special programs and events, peer-to-peer mentoring, loan program and a web-based network listing.

   
 

The Forth Worth Women's Business Center ( www.fwbac.com/wbc )

 

This center is dedicated to offering women who want to start a business in Ft. Worth or Dallas, a place to get the help they need to make their businesses successful. The Center offers free business counseling and mentoring as well as educational workshops in the areas of financing, technology, certification and more.

   
 

Check www.onlinewbc.gov (or http://www.onlinewbc.gov/wbc.pdf ) for locations of other women business centers throughout Texas and the Southwest.

   
   
 
   
  Government Resources - general and women-focused
   
   
  General
   
  U.S. Small Business Administration
 

The U.S. Small Business Administration (SBA) was created by Congress in 1953 to help America's entrepreneurs form successful small enterprises. Today, SBA offices in every state, the District of Columbia, the Virgin Islands and Puerto Rico, offer financing, training and advocacy for small firms. In addition, the SBA works with thousands of lending, educational and training institutions nationwide .

   
  The SCORE Association
 

The SCORE Association (Service Corps of Retired Executives), "Counselors to America's Small Business," is a non-profit association comprised of 10,500 volunteer business counselors throughout the U.S. and its territories. There are 389 SCORE chapters in urban, suburban and rural communities. SCORE members are trained to serve as counselors, advisors, and mentors to aspiring entrepreneurs and business owners. These services are offered at no fee, as a community service.

   
  Small Business Innovation Research and Small Business Technology Transfer Programs
 

Small Business Innovation Research Program (SBIR) is a highly competitive program that encourages small business to explore their technological potential and provides the incentive to profit from its commercialization. Small Business Technology Transfer (STTR) is an important new small business program that expands funding opportunities in the federal innovation research and development arena. Central to the program is expansion of the public/private sector partnership to include the joint venture opportunities for small business and the nation's premier nonprofit research institutions. STTR's most important role is to foster the innovation necessary to meet the nation's scientific and technological challenges in the 21st century.

   
  Small Business Investment Companies
 

Congress created the Small Business Investment Company (SBIC) Program in 1958 to fill the gap between the availability of venture capital and the needs of small businesses in start-up and growth situations. SBICs, licensed and regulated by the SBA, are privately owned and managed investment firms that use their own capital, plus funds borrowed at favorable rates with an SBA guarantee, to make loans or venture capital investments in small businesses.

   
 
   
   
  Women-Focused
   
  SBA's Online Women's Business Center (www.onlinewbc.gov)
 

SBA's Office of Women's Business Ownership (OWBO) promotes the growth of women-owned businesses through programs that address business training and technical assistance and provide access to credit and capital, federal contracts, and international trade opportunities. With a women's business ownership representative in every SBA district office, a nationwide network of mentoring roundtables, women's business centers in nearly every state and territory, and the Online Women's Business Center, OWBO is helping women start and build successful businesses.

   
  WomenBiz.gov ( www.womenbiz.gov )
 

WomenBiz.gov is the gateway for women-owned businesses selling to the federal government. It is organized to target the five specific stages that a woman business owner should go through as she begins to explore whether the federal government is the right customer for her.

   
   
 
 
Copyright © 2005  Texas Women Ventures Fund, LP All rights reserved.