Any Experience with VC Funding Sources?

OK, I have a great line of products, a comprehensive business plan, initial markets worth ~ $17 - 20 Billion, patent protection, and a decent marketing plan. What I don't have is the capital for tooling, initial production run, and workspace.

Does anyone have any experience with ACE-NET (a federal program for financing start-ups), or "Angel" sites? IF there are any freepers with VC experience, I would very much like to hear about your successes, failures, what did and did not work.

Since I know this will be asked: funding sought is $1.1 million.

Also, Admin Moderator- I have no idea why you might feel compelled to yank this thread, but at the least, ACE-NET IS a federal program, and I am considering using it. I would think that soliciting comments from freepers with experience with ACE-NET would be completely permissible. However, since you yanked my last thread on this subject about an hour ago, I would at least request an explanation of why if you yank this one as well.

Thanks.

Start by preparing serious projections with serious numbers -- "initial markets worth ~ $17 - 20 Billion" sounds like the garbage "business plans" that were floating around investment banks and VC firms at the end-stage of the dot.com craze. By mid-2000 they'd gotten so ludicrous that they were being passed around my institution accompanied by peals of uproarious laughter.

I'm hard-pressed to see how you can have 35 pages of financial spreadsheets and calculations for a business which is not yet a going concern. Most of the goofy dot.com business plans also came with reams of "projections", and wild or irrelevant assertions about "market size" were often the foundation of the whole mountain of meaningless numbers.

The sole survivor among the dot.coms I had occasion to deal with had been in business for a couple of years, under the sponsorship of a well regarded VC firm, and STILL had no projections beyond the end of the current year, and nothing more detailed that standard financial statements. They were sufficiently attuned to reality to know that they had no idea what their business would look like down the road, and to busy running it to waste time pretending otherwise -- and their VC sponsor was quite happy with this state of affairs. Not surprisingly, they made a smooth transition in their business model when dot.com-mania evaporated, and have continued to grow steadily.

The government program may be impressed by lots of detailed projections, but most VC firms won't be (the ones who were mostly went the way of their dot.com sponsorees). Serious financial projections for a proposal-stage start-up are by definition very brief and general.

Point well taken, however, those projections cover a lot more than projected revenue, cash flow, and balance sheet (there's about eight pages right there). They also include production costs, tooling costs, general business expenses, sales and marketing costs (which are also carried to the cash flow tables), personnel, and carried inventory. Added to that is the fact that I have nearly 30 years experience in this particular market and that it has nothing whatsoever to do with IT, or dot bombs or anything else even remoetly connected to computers.

To be sure these spreadsheets, taken together, represent only a projection, a best-guess as it were of what will happen, and the best battle plans are discarded at the moment of eneemy engagement. But at the least they demonstrate a thoughtful consideration of all the variables, and as ammendments are made to one area of the model, the changes ripple through the other areas to give a nice strategic overview of progress.

I am also aware that the document that I am terming a "Business Plan" is not a suitable document for a VC firm. It is in fact, a Business Plan, filled with far more detail than a VC firm wants to know as an initial introduction. They will eventually want to see all that stuff, I presume, but only after the project is under serious consideration.

In the meantime, the initial "just the facts, Ma'am" document is modelled after an Offering Memorandum and is ten pages.

And my market calculations are spot on. (and if they are guilty of anything, it is that they are too conservative)

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