Editor’s note: Lea Strickland is president and chief executive officer of Focus Resources.
CARY, N.C. – Have you heard the saying that “You can’t see the forest for the trees”? Early stage companies exist in a forest of opportunity. To succeed in reaching investors, you need to enable a potential investor to see your individual tree. You have to BE one of the TREES that doesn’t get cut down or hauled away as deadwood.
If you’ve ever taken a Sunday drive through a sun dappled forest, you have probably experienced the sight of the sun streaming onto a solitary tree – spotlighting it from amongst the many. Why does the one tree standout?
Sometimes, though rarely, the tree we notice is the biggest and leaves all the other trees in the shade. The biggest tree, while it may readily capture the largest share of the sun, usually doesn’t get “illuminated”. It is usually big and we notice the shade or shadow that is produced if anything.
We may also notice the fallen tree with its broken branches, ivy, and decay, remarkable in its contrast between new life and faded glory. While it may communicate its history, it is about what was and how it will feed the circle of life, not about potential.
Then there are those singular trees, those which have found a place to put down roots and begin growing out from among the grasses and leaves. The trees which, against the odds and the elements, sprout from a seed and find purchase in the soil. The trees which have survived forage, fire, and other cycles of nature to grow beyond seedling to sapling and bring forth the buds of leaves and branches. These singular trees stand among the denizens and established forest members rooted in a patch of opportunity where water, sunlight, and sustenance feed the potential – enabling the tree to grow.
Sometimes trees exist in a managed environment where a woodsman monitors the forest, making sure that the young, healthy seedlings, saplings, and trees don’t get overshadowed (literally) by older or less healthy trees. The woodsman keeps a careful eye on the opportunities and risks in the forest. The woodsman makes sure that each tree is seen independently and as a part of the health of the overall forest.
In other forests, each seed, sapling, and young tree fights the forces of nature on its own to get the resources to survive and grow. Survival of the fittest prevails.
The Forest of Early Stage Companies
If you draw the parallel between the opportunities presented to early stage investors and the forest, you realize that your business is one of many trees competing for resources to grow. If you can’t differentiate yourself from the other opportunities, whether with the help of reputable, qualified, and “legal” representation to the investment community or through savvy pursuit of opportunities, then you will struggle to find and obtain sufficient resources to grow.
You want to be the singular tree which stands out in the small clearing – neither overshadowed by larger or more established businesses, nor viewed as a company whose time has passed. You want to be the business that is the embodiment of opportunity.
More than a Moment in the Sun
What can you do to make your company standout?
• Have a clearing between you and your competition
• Understand who you are competing against for resources and customers
• Understand environmental and other risks
• Demonstrate you have a plan to get resources and address risks
• Have a savvy advisor who looks out for your best interests
• Understand that you compete against more than an existing technology – you compete against substitutes, alternatives, and inertia
• Have a persuasive and winning story that takes you from lowly acorn to mighty oak
You can cut down the competition by investing time and effort in preparing for the financing process. From day one, acknowledge that you will be competing for resources. Hone your competitive edge. Clear the forest of competition through sound business and strong product development.
The forest of opportunity is filled with competing companies, struggling seedlings, saplings that are losing out, and maturing businesses that are becoming part of the deadfall. Don’t be the forest. Become the tree.