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Score Elevation Tactics

It is tempting to counsel moderation. The less money required, the more likely you are to receive it. You may also receive your funding if you appear not to need it. But as is often the case in new venture launching, the reverse could be closer to the truth: It could just be easier to raise a whopping amount of money than it is to raise just a little bit. If this score is low, it could be best to first address the management team issue—that is the first place your investors will look. Fifty million dollars for a new software venture could be unreasonable unless it is discovered that the prospective CEO of this new company is Bill Gates. Once the management has been reviewed, then it could make sense to determine a more rational capitalization scheme, say, less than $10 million until the concept could be proven for sure. To keep management that is most likely to deliver a success, investors will sometimes be quick to make special concessions to the team.

While we are on the subject of management solving a low score on capitalization requirements, here is another tactic. Try to position all executives so that their financial requirements will be met by other means, at least until either break even or substantial capital infusion. This could occur by all hands receiving retirement checks or holding jobs not on their résumés, such as night shift at the factory, driving a cab, running a subway train, and the like. Just smile and keep moving, knowing that better days are waiting. This could drive your capitalization score up and solve your management questions at the same time.


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