I met with an investor today. Options?

[mikekob]

Hi everyone.

I felt like starting a new thread with this small bit of progress I've come across. Meeting with an investor is probably a question on many people's minds and I met with one this morning.

I have been on a bit of a journey with this business and having a partner leave then come back. During the course of this I put a profile on AngelList as a way to raise money. Well a year and a totally new company later, I get a message from an investor. Now I've neglected this site for the last 9 months or so and it's very inaccurate and out dated. I did manage to change a very small summary to give it a current idea of the product.

I met with the gentleman this morning and talked about a whole bunch of stuff. Valuation was a big one, as were sales, mergers, and acquisitions. He came from large scale medical device sales within imaging and his partner works for Dell. As we haven't been looking for funding actively we are not willing to give up equity unless we are talking about a large sum of money. The investor was fine with that. We discussed where we are in need and we thought with sales and getting in front of the correct person. He came from hospital IT and has been a consultant the last four years still within hospital IT. He seems to have contacts out the a$$ from this and is going to try and get us in front of a huge hospital org. Basically he is looking for a 10-20% commission on sales and the same with a mergers/acquisitions contract.

We have some in house legal things to work out then look at a contract with him. I'm going to be doing some back ground research on this guy and looking for references. Is this whole situation a normal occurrence? I've never met with an investor before and am a little overwhelmed til I get a night's sleep.

Thoughts on this? He's looking to deliver big and seems to be pretty aggressive with his movement. He's already spoken with a few high level execs about this and they seem to be excited for this solution.

Mike

 

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[NicoleMarie]

Wow, congratulations! That's very interesting that he took something besides equity. I'm no pro but considering he's shown real value and drive so far instead of just wanting money/control, I'd say that's a great start. Don't forget about Googling tips about all things investors!

 

[Nate-NewVenture]

Please, please, please do your research on the investor. I hate reading about honest, motivated 'Neurs getting swindled by fast talking people. It's not hard enough gaining traction and growing personally through this process..... we meet people wanting to take us for fools.

 

[CreateLiving]

I do like that this investor is talking a commission based deal, that means he is extremely confident in your product AND his ability to deliver it to the masses. I would definitely advise you to continue your due diligence in making sure this guy is the right fit for your business, however it seems like you are making some progress. Let us know what happens!

 

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[jockinbox]

So an "investor" wants to get on the ground floor and sell

That's interesting. An investor is a person who allocates capital with the expectation of a financial return.

Sounds like this "investor" is a sales rep, or has another trick up his sleeve.

Before you go any further with this "investor" / sales rep

• NCND Agreement
• Sales Contract

Just to be safe they don't steal your idea.

Mike, I'm going to be brutally honest with you man.

You have no sales.
You're running around trying to make something happen that isn't your strong suit & for all I know you probably HATE selling

The way I see it, you have two options

1. Sell and collect royalties
2. Give equity to someone who actually understands business and can bring capital to hire sales/get marketing going

Play to your strong suit brother,
You're so close to scoring

Don't fumble the ball

 

[mikekob]

I agree it does seem a little off to me but I agreed to sit down and listen to what he said for the experience. We all walked into this meeting with the knowledge we are not willing to give up equity and we are not in NEED for capital from an investor. He was in sales for a very long time and he asked what we needed help with. I said with your experience in sales and your contacts sales would be a great place. Not necessarily to take over sales but see what he can come up with. He has good contacts at another large hospital system we obviously would like to sell to but I haven't pursued this org.

I actually love the sales part and so far I seem to be very good at it. No sales? That is correct. No sales. I am not ashamed at the end of the day to say we have no sales so far. The reason is barriers. This product that I'm selling was created from my brain. It took a 6 months to start the build due to diligence and another 6 to make it real. I'm in no way anticipating a quick sales cycle with something that has never been done before. Literally this is the only product in the world that does this. While this is both exciting and frustrating there are massive barriers that my company and three hospitals are all addressing right now. Hospitals move slow on top of it all. So for the love of God don't get so caught up on the "No sales" part like others. I'm not selling a $.99 ebook or a free app. This is expensive, is used by first responders who have lots of red tape, and is an original product. This was started in Feb so the amount of progress we've made is pretty remarkable in itself. I would love to have a sale made but it's something that will take time.

I am thinking about our initial meeting and am basically looking at this guy as a salesman for hire. Good connections, experience, and input. He's already put some legwork into finding interesting parties which is good. I'm thinking about a very limited sales contract with him if we do decide to move forward. I meet with one of my developers today and we'll discuss more. I'm not 100% set on this guy because he could in fact be a salesman trying to get his too. His partner does work for Dell and of course he mentioned he thinks he could get us in line to be bought be Dell. Again I'm still on the fence and will post as my decision becomes more final.

Mike