LOS ANGELES-Our industry is great at creating new and commercial viable products and system integration efforts. On the whole, we create these systems for our clients who commercialize our efforts into something significant and occasionally profound.
Yet I wonder how many of you have left an event or a facility wondering why you haven't bypassed the middlemen and done it yourself? It does take a special breed of entrepreneur to want to build a new or enhance an existing business. It is an even more rare breed that has the technical chops, the business acumen, and the desire to build something great. We have the technical chops.
I attended the LAVA conference not knowing what to expect, and left thoroughly impressed. Although billed as a Los Angeles event, much of it was national in scope and the knowledge certainly applicable worldwide. According to LAVA, the Los Angeles market alone attracts $900 billion in capital annually, making it larger than Brazil, India, and Russia combined. $400 billion goes through LA ports alone, making it the largest port in the U.S.
There were two major LAVA Conference tracks, one about money and the other leadership, along with a host of panel discussions.
Choosing the money track, it was immediately evident that there is a great deal of investment capital available, and there are a number of groups eager to help you succeed. The catch is your concept and execution plan have to be good enough to convince investors to overcome their fear of you and failure. From pre-meeting to term sheet, each step was explained by some of the biggest players in the venture capital industry, with a focus on what it takes to get attention and eventually get investors on board.
Consider LAVA as a crash course in how the investment world really works. One learns there are both formal and informal processes to be followed to attract investors' attention. Most importantly, you need to understand the language of the investor and the venture capitalist. You will need to become conversant using the language of syndicate, term sheet, deal flow, M&A versus IPO and homerun.
"Throwing your business plan over the transom" is not sufficient to get financed. You will need an introduction from a known successful entrepreneur, quality PowerPoint, management team and execution plan. More often than not, your investors will want to cash out after five years with your endeavor and they'll want some serious rewards for their risk.
What is the best way to enter this new world? First, I would strongly suggest you attend next year's LAVA conference if your plans include a major expansion. There is not a company in our industry that would not benefit from the expertise available, regardless of your locale.