Venture Capital Strategy & Introduction Screening
      (C) 1990, 1993 Marions Panyaught Consultancy of Samani Intl Entps
       --- [Reproduce freely if in entirety. TLX (23) 6503536867] ---
[*] PEOPLE-CHEMISTRY QUESTIONS:   What have you done before? had partners? 
succeeded? Who do you know in your chosen industry? How do you intend to 
attract the right kind of employes? Tell me about workaholics, work intensity 
and family values. Should sales quota pressure be countered by accountants? 
How do you plan to avoid yes-men? How can you spot a loser? How do you plan 
to grow from controlling everything to delegation? Are you crazy enough? Do 
you inspire people? Why is your life on the line? How do you plan to create a 
tension of urgency to keep your mind switched on? What requisite skills does 
your team inevitably lack? What causes employe turnover?
[*] MARKETING QUESTIONS: Why is your product better than what's out there?  
  Convince me you're not just another clone. How do you add value? 
Why is your marketing better than others? What special need do you
  satify? How big is that need (potential market)? Why should it grow? 
  Why isn't that need being satisfied already? Numerical goals: eg # calls.
NOTICE THAT IBM & LOTUS SUCCEEDED WITH EXISTING TECHNOLOGY VIA BETTER SERVICE.
  I don't want to find money for research projects, I want to make money.
How many potential buyers? How many up/downmarket products to link with?
     Have you actually talked to any customers? What do they think? Orders?
   What future products synergise with initial product? Value added services?
   Stage/rate of product/industry growth/maturity/cyclicality/share? 
     How good are your forecasts/schedules? Social/Eco/Tek/Legal trends?
   Niche. Credibility. Pricing [cost v cust abil/need v compet v reguln]. 
     Positioning. Image. Warranty. Ads/PR/Promo/Mail/Shows/Distrib/Export.
   Entry barriers for competitors? Proprietary,Supply,R&D,Experience,Svc,
     Cost,Scale,Switching costs,Exit barriers,Differentiatn. Price elasticity
   How do you plan to measure marketing effectiveness?
Likelihood of competitive retaliation - Who?  Substitute products? Imports?
   Which competitors matter? Why? Segements? Reputation? Anlst rpts/Trade mags
   How can we delay provocation of competitors? Advantageous to do so?
   How competitors better able react? Mktg,Fnc,Prdxn,Cost,QC,Dstbn,Svc,Eqp,Loc
Major Buyers? Who money/authority/desire/rating? Distribs/OEMs? Export?
     Decision:Awareness->Comprehension->Conviction->Action Media/freq/message?
       How ads(Want[concept]/devlop[latent]/focus[convert]/satisfy[keep])?
   Likelihood of backward integration by buyers? Demographic/trend/segment?
Suppliers? Who are? How reliable? Exit barriers to them? Seasonality?
[*] FINANCE QUESTIONS: What have you spent so far? What is the asset value? 
Do you maximally lease leverage your assets? Interest expense of inactive 
assets? Leveragibility, defendability, effective life & revenue for patents, 
intangibles? How much do you need, for what, until when? Do you have any 
debt, patents, incorporations? What does it cost to produce? Including your 
time? Gantt timeline schedule. Revenue, net income, breakeven, cashflow 
(sustainable?), NEBIITDOC, sweat equity? Tax, perks, regulatory liability, 
fund availability? Why is your cost structure better? How will it evolve? 
Debt management? How do you plan to control, coordinate and synchronise 
sales, cash flow, production and development? Can you accept owning less than 
a tenth of your firm in ten years? Will net income match the competition in 
seven years, half in four years? Will net quick assets cover most of the 
venture capitalist downside? Include: Inventory flux, unsolds, ad budget, 
commissions, benefits, insurance, rent, utilities, supplies, uncollectibles, 
payables, tax, interest. Plant Dependability, Efficiency; Supplier credit; 
Project liquidity. Compare with Dun's Standard Business Ratios. 
Explain EVERY assumption in notes. 
[*] CAVEAT: A strategic plan should be the coordinating brain of a firm, 
making sure everything fits together without gaps or redundancies. It is not 
a piecemieal rulebook but a mindset from which specific action plans follow. 
A good strategy is obtained from managers - at their full, unencumbered, 
uncluttered cognitive attention -- thinking cohesively together, not by 
submitting incrementalist, satisficing piecemeal plans which take on a life 
of their own. This is why a plan must be made by experienced line managers, 
not imposed by far-away staff. This is why pay, budget and control should be 
subservient to strategy; increased allocations should be conditional on 
achieving projected results. A plan is a strategically opportunistic way of 
dealing with worst and best scenarios: you don't plan on luck, rather you are 
ready to take advantage of good or bad luck when it arrives by knowing what 
you want. Strategy allocates skills, technology, financing, production, 
inventory, service, sales and distribution - on time - without waste or 
scarcity; value drivers and destoyers in these areas should be accurately 
identified so each new major action can leverage existing strengths. You plan 
on stealth and randomness to confuse your opponent's retaliation but you also 
inevitably expect them to discover the truth; likweise you must determine 
your competitor's motivation, share, niche and costs. You divide your firm 
into a portfolio of distinctly operable businesses, investing in high growth, 
milking low growth and divesting low share. Joint ventures are only for 
learning. For turnarounds, you must shock, then lead, access total 
information, maximise cash flow, simplify, then demobilise and grow again; 
you must negotiate everything and seek allies but post-emergency management 
is like post-traumatic stress: need positive images to displace painful 
memories, but need period of grieving, too. But fundamentally, strategy is 
thinking -- no formula can ever substitute for thinking.


----NOTES/ADDENDA--

	Limit the number of primary participants to people who can
consciously agree upon and contribute directly to that which the
enterprise is to accomplish, for whom, and by when.  Single-digit odd
number.  Define the business of the enterprise in terms of what is to
be bought, precisely by whom, and why.  Concentrate all available
resources on accomplishing two or three specific, operational
objectives within a given time period.  Prepare and work from a
written plan that delineates who in the total organization is to do
what, by when.  Employ key people with proven records of success at
doing what needs to be done in a manner consistent with the desired
value system of the enterprise.  Reward individual performance that
exceeds agreed upon standards.  Expand methodically from a profitable
base toward a balanced business.  Project, monitor, and conserve cash
and credit capability.  Maintain a detached point of view.  Anticipate
incessant change by periodically testing adopted business plans for
their consistency with the realities of the world marketplace.