Back in the dotcom boom days in the late 90s, I was in charge of marketing for a dotcom start-up with a new wireless technology.
And our executive team went on the road often to present our “case for support” to private investors and investor groups that wanted to invest in high tech.
What you learn very quickly in that environment is when you present your opportunity to investors, it is similar to the Shark Tank TV show in one respect, but completely different in another respect.
The similar part is you will present investors with the emotional story about your product’s potential, as well as the objective data that reveals future demand and profit potential of your product.
However, unlike Shark Tank, where the order of presentation is first the emotional story, and then the objective data, in the private investment world the prospective investors often request you to switch the order and start with the objective data first before they decide if they want to hear your product presentation.
As the marketing guy on the team, of course, I hated this because there were times when our start-up’s pro forma numbers did not meet a particular investment group’s requirements and they said, “we’re out,” even before I got my chance to present.
It was like getting pumped up to play in a game, and then the game getting cancelled right as our team was about to take the field.
A big letdown for me personally, but what about for the potential investors?
Please Save Me from Myself
Professional investors are astute.
They recognize they are human, and as susceptible to getting carried away by their emotions as any other human being.
Humans are emotional creatures.
To inoculate themselves against their emotions, before the “game” begins, professional investors wisely ask the presenting team that is about to take the field to first present its objective data.
In the real world, I believe the sharks on Shark Tank likely follow the “numbers first” process as well, but in the land of Hollywood, a numbers first process would make for terribly boring reality TV.
Most TV viewers would say, “I’m out” and the Shark Tank TV show would be quickly cancelled.
PHC Shark Tank
Recall that I ended yesterday’s article with this assertion: “Too often, leaders of PHCs assume that benefactors are as emotionally invested in what the PHC offers as they are.”
Now imagine a PHC Shark Tank where, just like in the professional investment world, a PHC had to start with its objective numbers before presenting its emotional case for support.
A key metric would be market share achieved versus the competition.
Let’s say a PHC was required to begin its presentation with data on market share, and further, let’s say the PHC was also required to state its market share in terms of the number of times it won clients against its competition, or alternatively, the number of times it lost clients against its competition.
Most PHCs would have to say something like this, “Last year, in our competition against our main competitor, Planned Parenthood, we lost 99 times out of 100.”
If you were a prospective investor in a PHC, how would hearing those numbers impact your decision to invest?