The Importance of Story Consistency
I love business owners.
I love their passion, their original thinking, and their contagious enthusiasm. I love how they can see something where something doesn’t yet exist. I love how they believe enough in that vision, often before anyone else can see it, to bring it into existence through sheer force of will and perseverance.
I love how they think outside the box, can always see new ways to expand and evolve, and never stop generating new ideas.
The Investor Mindset: What Bankers and Buyers Really Look for in Businesses
Unfortunately, this is not how investors typically see things.
Let me tell you how I learned this the hard way – and why it’s important to keep a translator, someone who can speak both entrepreneur and investor (aka Doescher Group), by your side when you step onto the proverbial playing field to woo investors.
We were looking for an investment for our client’s expansion. It had been a tough sell. As is often the case, this client’s story couldn’t be wrapped nicely with a bow. It required a thoughtful narrative, weaving a story that demonstrated great potential, while the realization of that potential was not a sure thing. There was a risk that needed to be mitigated and confidence to be built.
After months of effort, courting bankers all over town, we had finally landed a term sheet for our client. It was perfect. It gave them all the capital they needed to execute their plans, and together we breathed a sigh of relief.
At Doescher Group, we see obstacles as opportunities, but even our team was pretty exhausted by this process. We were all relieved to be marching toward the finish line.
All the bank needed now was some confirmatory due diligence items, and they’d be on to ordering legal documents drafted and a closing date assigned. No biggie. We were sitting pretty.
How a Single Investor Meeting Can Make or Break a Business Sale
One of the confirmatory items was a site visit to see the place, meet the owner, and chat with the bankers for a couple of hours. Everything was going great and seemed to be wrapping up. I had a meeting to get to, so I was first to leave.
We connected with the client afterward, and she said it went great. My response was, “Yes! Another box checked!”
Nothing happened for a few days, and then the fateful call came.
The bank was not comfortable moving forward. They pulled out of the deal. Months of tireless efforts were circling the drain!
What?! How could this happen?
The Mistake Business Owners Often Make When Talking to Investors or Buyers
It took some time to unpeel the layers, but it all went wobbly just a few minutes after I left that meeting. The story we had spent so much time meticulously crafting unraveled in just a few minutes of casual conversation. Our client forgot who they were talking to – their potential investors – and went off script, talking about other projects that were very exciting to him. This is the kind of stuff that entrepreneurs love talking about: blue sky, big ideas.
Another entrepreneur would have heard the excitement and maybe even seen the possibility. I would have loved the passion and understood that this could become the seed of their next business, even if it didn’t belong in this discussion.
No offense, but finance guys aren’t exactly renowned for their great imaginations.
What Bankers Hear vs. What Entrepreneurs Think They’re Saying
So in this case, what the banker heard was unfocused, unserious, and perhaps unhinged. They were looking for safety and security, not potential risk.
They were about to entrust several million dollars of the bank’s money into the hands of this business owner in return for a market rate of interest.
They were excited about the opportunity we had presented to them, but their job is also to be skeptical and watch for red flags – and those few minutes completely unraveled the deal.
Why Having an Adviser at the Table Matters When Selling Your Company
At Doescher Group, we talk about being bilingual. This is a skill that is rare among self-made business owners, which is where we come in. We speak “entrepreneur,” but we also speak “banker.” As a risk-taking business owner, you are a very different person from a banker or an outside investor of virtually any type. You’re always betting on yourself. You accept the risks. It’s part of what got you here. But they’re betting on you, and they don’t want to put money behind anything that feels too risky.
What we do is help translate. And it’s also why our team does everything we can to stay until the very end of your meetings. Had I not been overscheduled that day, it’s possible we could have avoided that issue altogether.
This is a key part of how we serve our clients as Chief Transaction Officer®.
Ready to have us at the table with you?
Entrepreneurs inspire. Investors evaluate risk.
Don’t Let One Conversation Kill Your Deal
If you’re thinking about selling, retiring, or bringing on investors, you can’t afford to get “lost in translation.”
You built the business. Now you need to present it in a way buyers and bankers trust.
That’s where we come in.
See What This Looks Like in Real Life
Watch this Owner Spotlight to hear how one business owner successfully navigated the exit process with Doescher Group on their team!
