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Mommy Millionaire

Kim Lavine has transformed the lives of millions through appearances on the Today Show, Rachel Ray, GMA, NBC, ABC, CNN, CNBC, FOX, NPR, Oprah & Friends & features in USA Today, Guideposts, Inc, Business Week, Entrepreneur, and Forbes, to name a few. Her startup bible MOMMY MILLIONAIRE was called by Publishers Weekly “A top-notch how-to guide on launching a business…a rare gem.”

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Kim Lavine
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Kim is on a mission to inspire people to follow their dreams, empowering them with hope, honesty and faith.

Identified as America’s Expert on Inspirational Business Advice, Kim touches and inspires millions around the world through her appearances on The Today Show, Rachel Ray, Good Morning America, NBC & ABC news, CNN, CNBC, FOX, NPR, Oprah & Friends Radio Network, and features in USA Today, Country Living, Guideposts, Inc, Business Week, Entrepreneur, Women's World, and American Baby to name a few. Read More...

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Kim Lavine's Print Highlights
Thursday
May012014

« Just Show Me the Money Already »

by Kim Lavine

I spoke at a Business Plan Pitch competition recently. It was nothing like this...

From MOMMY MILLIONAIRE

I dressed myself up in my lucky suit, the one that managed to be very professional while displaying the absolute limit of politically correct décolletage, and put on all my best over-the-top green daisy crystal jewelry.

Smart Money

I drove the hour and a half to this university’s event, and found my way to a crowded room filled with at least a hundred people, all focused on a panel before them made up of three individuals: the first can only be described as the most buttoned-down, formidable-looking Master of the Universe I had ever seen in my life—bow-tie, spectacles, and all! If you looked up Prestigious East Coast Cash Money in the dictionary, his picture would be there. Out of all the money there, he was Smart Money.

Old Money

Next was Old Money herself, sitting on the panel and receiving the fawning attention of the three entrepreneurs there waiting to present. Third was a person who was the second-generation founding family member of a major pharmaceutical company, William Parfet of Upjohn, recently purchased by Pfizer, for which I once briefly worked. They had brought out the big guns.

Corporate Money, Washington Money

There was another group of investors sitting at a table to their right. I turned around to see that the VC team of Corporate Money and Washington Money were there too. 

Criteria for Presenting at Capital Raising Events

  • Large Potential Market: For most of these events you have to be talking about a minimum $200 million dollar market, of which you would forecast a percentage of sales, with profitability in three years.
  • High Anticipated Growth Rate: Projected annual sales growth of 25 percent or more.
  • Experienced Management Team: Key people who have been there, done that.
  • Competitive Advantage: A “distinct” advantage in performance, price, etc. compared to the competition.
  • Barriers to Entry: Economic means to discourage or beat competition in the field, including proprietary technology or patent.
  • Clear Strategy for Commercialization: A realistic and well thought-out plan to bring product to market.
  • Scalability: A substantial likelihood that that the business can grow exponentially once the product is launched.
  • Proof of Concept: Ideally, a product or service that clearly fulfills a need, has achieved some level of sales or sales commitments.
  • Business Model Anchored in Reality: Management has thoroughly assessed its market, product development costs, on-going operating expenses and overall funding requirements.

Time Is Money

The usual introductions were made, but this was a group that wasn’t about wasting time. There weren’t going to be any compulsory lame jokes or sleepy personal narratives about the events of their drive there today. Time was money, and these people were all about money.

The panel was introduced; Smart Money, turns out, had his own capital investment firm, was involved in the late 90’s Silicon Valley IPO madness as a Senior VP for a major investment firm, and was instrumental in the founding of Napster. And he was a first-round investor in Google.

The room went dark, the overhead projector was turned on, and presenter number one hooked up his laptop and started the PowerPoint show. I could tell right away he was in Life Sciences. His short-sleeved shirt—no tie—and sandals gave him away.

He was a certified genius—he was a Nobel Prize laureate—but he had no idea of the step-by-step mechanics of how to ask for and close a sale.

I listened with rapt concentration for the ten minutes he was allowed to make his pitch, laboring to understand just what he was talking about. The second the precious ten minutes expired, the panel moderator stood up, cutting off the power supply to their laptop, ending their dazzling PowerPoint display preemptively.

He asked the audience, “Anybody here understand what they’re selling, raise your hand?” I had to admit that I did not, along with most of the room by evidence of the scant hands raised in answer to the rhetorical question.

How could it be possible that such an accomplished and learned group of scientists could come this far in the evaluation process of capital funding without understanding the rudimentary basics of asking for a sale?

Just Show Me the Money

They had succeeded in dazzling the audience with their unfathomable and recondite knowledge of life sciences and some baffling new technology they had discovered in their labs at Cal-Tech and MIT, but had completely failed in expressing what and when its practical application and financial benefit would be to the group of investors gathered there who were concerned with only one thing: the bottom line.

The Bad Guns

This exercise in vanity was rewarded with ten minutes of passionate criticism from the group of investors—or Bad Guns—who spared no ego as they tore apart the business plan and its ineffective presentation. The stunned entrepreneur presenter stood staring like a deer in the headlights, helpless to avoid the truck that was rolling over him, while the room of observers sat in stunned silence, witnessing the carnage with self-satisfaction thinking they would say the same things if only they had the chance or the courage.

This guy was a Nobel laureate, and he was being eaten alive! ‘Guess my Angels treated me with kid gloves, after all,’ I thought.

Next was a company selling fuel-cell technology. I could hear the fear in the presenter’s voice as he started. He had flown in from California for this opportunity to present. He spent a few minutes explaining how airport security had stopped him, wanting to confiscate his fuel cell prototype, and how he almost didn’t get it there. This was a very bad decision, because he burned up two of the ten minutes of his presentation time, and he found his PowerPoint slides cut off a full two minutes early. He didn’t even get to show them the money at the end.

Didn’t matter

One member of Bad Guns was so knowledgeable about the most arcane details of fuel cell technology, that he appeared to know more than the presenter. He didn’t mince any words.

“I know more about this technology than you do, and that prototype you’re holding is worthless! Your technology is already obsolete!”

Yikes! I was scared, sitting in the audience

This same man would later check out my cleavage and smile at me with a big friendly “hello” at the break; more proof that breasts can tame the savage beast. The third and final presenter was another life sciences company; he had the charisma of a board, and I lost interest one minute into his presentation, remembering only one thing he said.

“We have a burn rate of $40,000 a month.” I listened long enough to hear that burn rate meant how much money you went through with all your fixed and variable expenses each month, or your negative cash flow. It presented a sort of thumbnail for potential investors to understand what your capital needs were.

Money: Code Red

This company was researching a cure for cancer, so they had laboratories, scientists, and all kinds of technical expenses. They needed money as soon as possible, he explained, if they were going to continue their work. Everybody here, including Nobel laureates, were in a state of Code Red when it came to money apparently.

What is Burn Rate?

    Refers to the amount of negative cash flow per month that a company goes through
    Indicates how long capital raised will support operations until company shows profitability.

The presentation was over and the three panelists including Old Money, Smart Money and Drug Company Founder were besieged with people from the audience, anxious to present their own opportunities. I was one of them. I dashed up to the front, waited in a very short line for my turn, then made my pitch first to Drug Company Founder.“Sounds very interesting,” he replied politely, “but I only invest in Life Sciences.”

Chutzpah

Next I was on to Smart Money. I put my low-cut décolletage suit in front of him along with my pitch. Within seconds he gave me the direct contact information for the President of Old Navy in San Francisco, including her direct dial phone number. I later found out that taking cutting-edge technology out of MIT and commercializing it into start-up businesses was something he did in his free time. I got his business card and burned his email address and telephone number into my memory.

It wouldn’t be long before we were talking regularly.

An Excerpt from MOMMY MILLIONAIRE

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