A prominent lawyer once told me, “Is the ones they tell themselves everyday.”
I’m pondered this for a few years. I thought I knew what he was referring to at the time, but I have a much clearer idea these days.
I have a clearer idea, because even tho I tell potential new clients “think of me as a business proctologist, I’m going to look really deeply into everything, and you have to be completely honest with me or I can’t help.”
That’s a fact. If I try and “sell” a project as one thing, and a potential investor’s due diligence uncovers something that wasn’t revealed, or I didn’t discover, both my own, and the company’s credibility is shot – that investor skates and won’t be back.
Entrepreneur’s “lie” to themselves in so many ways: denying there are similar projects or products on the markets that are much farther along than they are; understating the finances of the company, past investor’s positions, debt.
Not having a basic understanding of accounting, or some other business procedure, but insisting on doing it all themselves.
This is why “we” always need to surround ourselves with people much smarter than ourselves. From the get go. You don’t hire lawyers and accountants because they are cheap. You bite the bullet and get the best.
You don’t try and pitch a business plan that you wrote with help from some off-the-shelf software, or hired somebody off Craig’s list to tell your story.
YOU need to be able to tell YOUR own story, and explain every single aspect and nuance of the deal, the market, potential, customers, and so on. I’m not discounting that there are talented biz plan writers out there, I’ve crafted a few for other people myself. But I understand now the disadvantages of an entrepreneur not KNOWING his / her own plan. That’s a fatal error.
No investor expects you to be expert at all things related to your business. But they do demand you be smart enough to understand what you don’t understand!