Venture Capital: Funds, Growth Capital Funding, Business Capital & Financing | PrivateEquity.com

Venture Capital: Funds, Growth Capital Funding, Business Capital & Financing | PrivateEquity.com

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Frank

Has anyone found a successful way to counter VC and PE's reluctance to conduct market research to guide their decision making?

President and founder of Forward Associates a strategic business and branding consultancy

I have been working with a consortium of VC's for a few years conducting research to aid them in clinical trial development, pricing and commercialization strategies, product positioning, deciding on further investments, etc. But convincing other PE and VC firms of doing research has been tough.

  • Comment (11)
  • May 30, 2012
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  • GW H.

    GW

    GW H.

    Opening new world markets

    Mr Ruppen, as a demographer for 40 years, I have found that hindsight ' BUTT SIGHT" followed by a short course in that specific history of time equals a I told you so ! A month and a half ago I represented three clients in a two-day presentation at Menlo Park California. The four venture capital groups said they would take this under consideration and perform due diligence. On May seventh my three clients each received the regular standard copy of "sorry we must decline at this time" the letter. I asked for and received appointments to have the projects critiqued by each venture capital group. In my face-to-face meeting with each panel I was told that if their expertise does not cover the outlay of investment money they will outsource the due diligence program. When I attended the meeting we were 90% capitalized by an offshore investment firm. In other words their due diligence committee consisted of three PhD people all located on the East Coast. lets stay in touch and I'll tell you my war stories. Thank you for your time

  • Frank R.

    Frank

    Frank R.

    President and founder of Forward Associates a strategic business and branding consultancy

    It is sometimes rather frightening to think that many firms will invest millions yet will spend little if anything on first understanding whether there is an idea there.

  • Jack C.

    Jack

    Jack C.

    President at C2R Corp

    Totally agree! It's funny that they spend all this energy on the business and people aspects, but not on the scientific/technical feasibilities of advanced products and services. My group has been preaching to the choir for years with very few listeners.

  • Frank R.

    Frank

    Frank R.

    President and founder of Forward Associates a strategic business and branding consultancy

    So I guess the opportunity is to understand when companies do listen, what types of research are they authorizing, is there some consistency with the types of products; i.e are they more consumer focused, who is running them? When I have been successful it has been for consumer targeted products and the companies were all run by individuals who came from companies which emphasized the importance of brands. Do you see any similarities with those firms in which you have been successful?

  • GW H.

    GW

    GW H.

    Opening new world markets

    Frank,I have several projects that I am personally involved in. I have presented to 61 lenders, VC''s, private equity firms and investment bankers since January of this year.what I have learned is if it is not high-tech they are primarily not interested. The only reason I think that I got there interest up is these projects will be based out of Vegas. Out of the 61 potential lender-investors I traveled to 24 of their home turf. The rest of them came to Vegas. I spent an average of six hours out of their total trips in enlightening them on the value of lending and or investing in the projects. All of my projects are no tech to low tech. With earnings to start on the fourth or fifth month of funding. The first years return on investment is between 6.5% to 9% no value in base asset. By the fifth year the ROI 9 percent to 12% net. With a base asset up 66 million.

    When the due diligence entourage returned to their home base they filled out and presented to the investors there expense reports some of the investors called me immediately to chastise me on taking up their precious time and the money. Several of them flew to Vegas along with their attorneys to give me a piece of their mind. After meeting with them several of them want to participate in a couple of the projects after the three basic ones get funded.

    In summary it is the investors money that is keeping a lot of these funding organizations afloat and making payroll!. Frank and Jack give me your feedback. Thanks GW

  • Frank R.

    Frank

    Frank R.

    President and founder of Forward Associates a strategic business and branding consultancy

    In essence that is the issue. The people who run the PE or VC firms are the investors and they don't see the value in spending money upfront to help determine marketplace success

  • GW H.

    GW

    GW H.

    Opening new world markets

    Frank in the near future I will be publishing my survey findings, Including my contacts using linked in blogs. Right now less than 12% of capital funding is managed by principles. For the last four years funding has become very hard to obtain. Funding groups are playing musical chairs and nobody wants to be left out. My encounter with the principles and their attorneys this last five months have shown me that there indeed is an intellectual deficit an capitalistic morals in today's funding programs. The venture-capital principles that I've talked to face-to-face here in Vegas want the deserts, but they must eat their veggies in order to get to the deserts. In other words fund my three basic projects and they will also receive dessert.

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