For the experienced angel investors who have cut their teeth on risky investment in ideas and visions, the popularity of the “Lean Start Up Methodology” as a way to start and grow a company may seem revolutionary and the latest craze. For those business savvy men and women who believe in validating a product and market opportunity before spending R&D money or investing in capital infrastructure, the premise behind the “Lean Start UP Methodology is actually quite logical and practical.
For all those investors who ever thought angel investors were crazy for investing in companies whose only measure of success was how many clicks, or likes, or free users they could attract, there is a saner way to gain the benefits of investing in companies before they go public. Early stage investors that hale from corporate America and understand the value of strategic planning now can venture into the world of early stage companies who still have relatively low valuations, but mitigate that risk because the company actually knows there is a market for their product and a demand for their product before they ever go to market. Emerging Growth companies that have grown organically inherently utilize the market validation process of the Lean Start Up Methodology because revenues have been their source of growth capital.
In the Podcast “Business Strategies for Success – Attracting Capital & Customers” http://www.blogtalkradio.com/karen-rands/2014/09/23/business-strategies-for-success–attracting-capital-and-customers
Paul Hoyt and Karen Rands explore the importance and differences between a Business Plan and a Business Strategic Plan. A business plan is more like a brochure to describe the business, where the strategic plan is a blueprint to be a road map for how the company will succeed in the marketplace. When looking at a company to consider for investment, the executive summary introduces you to the opportunity at a high level, the business plan provides more detail about the direction and potential, but the strategic plan will show how they plan to actually get that point of success. Often times the strategic plan is saved until due diligence starts.
Companies at different stages may have varying levels of completeness of a strategic plan. Start ups simply don’t know enough information to have a great detail in their strategic plan whereas emerging growth companies with a history of performance leads to shifts or pivots in their strategy on how they need to adjust the plan to achieve the results they want and best utilize the capital they are raising. Regardless of the stage, the company should have some form of a strategic plan that shows how they will use the funds to ramp up staff, implement marketing plans, enhance operations, and increase sales.
The Lean Start up Methodology in effect creates a corporate environment that is living the market responsive strategic plan. Fundamentally it is an approach that embraces improvising, adapting and implementing – measure and repeat.
For more information about Paul Hoyt and his Beyond Business Services visit http://paulhoyt.com
For more information about Kugarand Capital Holdings and the educational programs for investors and the due diligence portal for emerging growth companies, visit http://kugarand.com