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How to Win Over Investors

The United States may be in a deep recession, but that doesn't mean there aren't investors looking to fund new businesses.

Entrepreneur and start-up advocate Kirk Coburn, BBA '94, MBA '06, shared how entrepreneurs can entice investors during' Knowledge To Go webinar Sept. 13. Coburn launched the PGA Tour Network, selling to SiriusXM radio and also founded Chief Outsiders, a Houston-based company that provides executive-level chief marketing operators to growing businesses.

According to Coburn, in order to get investments, every start-up needs to have two things:

  1. A great management team
  2. A great idea that has a solid value proposition

Coburn also identified four points that investors look at when analyzing an opportunity.

The key things investors look for, or the "4 M's"

  1. Market: Does your company do something you are passionate about, that you are good at, that consumers are willing to pay for, and that is unique from everyone else?
  2. Management: Do they have the experience to get to the next level? Are the right people in the right positions?
  3. Model: Do you have a well-thought out business model that factors in future innovation and growth?
  4. Money: How much total capital do you need from investors? Do you understand your cash flow?

A key indicator of a company's success is their attitude towards employees, Coburn said. Many potential investors expect employees to be valued above all else.

"This is a very big issue for companies," he said. "It's one of the key struggles as a company gets successful. Companies that value employees based on performance tend to perform a lot better."

Coburn pointed to angel investors, venture capital firms and seed accelorators as quality options for those looking to grow a company, Coburn said. Angel investors typically give larger amounts, said Coburn, who is a participant in a Houston-based angel investment group that has invested $8 million this year alone.

Moot Corp for Professionals

Coburn then shared details on his latest project, based in energy, which is the number-one sector in venture capital today.  SURGE is a Houston-based, start-up accelerator for energy entrepreneurs.

It's is a three-month program that is mentor-based and will help each participant become more appealing to investors. Each participating company will be given $30,000 in cash and will be taken through a rigorous business curriculum.

Seed accelorators such as SURGE are based on the model of student business plan competitions like Mort Corp. (Coburn's PGA Tour Network plan landed him in the runner-up spot at Moot Corp when he was a student)

"They took the same business school idea and made it professional," Coburn said. "Let's take serious entrepreneurs, put them through a structured three-month program, and let's provide those entrepreneurs with capital and mentors in return for a small percent of equity. There are over 50 seed accelorators around the world today."

The idea is to help people refine their business model, management team and original idea, which is rarely what ends up going to market, Coburn explained.

Coburn stressed the opportunities entrepreneurs can find in Houston by pursuing the energy field. His new program, he explained, can help great ideas get the start they need in the active energy business ecosystem of Houston.

"I'm doing SURGE because it is very hard to find the best deals in the world," he said. "In order to do that, we are calling out to the world and saying, 'Hey, you have an idea, and we have the capital to help you."

Get more details and listen to the full webinar by clicking the Listen Now tab on the Knowledge To Go website.

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