Abstract number sorcery won't cut it anymore. Investors want to know exactly how you're going to make money.
It was just two short years ago that a profound wake-up call hit the capital markets. The numbers game of raising money had been reluctantly redefined during the 60 months that spanned from the first quarter of 1994 to the peak of the Nasdaq in first quarter of 2000. Fundamental valuations had given way to customer-driven metrics such as industry share, volume and first-to-market presence. Many on Wall Street hailed the arrival of the new "new math." Peter Henig, writing in Red Herring, said, "As long as there's dynamic growth, there are dynamic stock prices." And the recommendation that came down from Charles Crane of investment research firm Key Asset Management was, "If you believe in these new statistics, then you have to buy these stocks."
But today, huge opportunity and market share are no longer enough to secure a funding deal for your growing firm. Raising money has taken a turn back to the basics. And as company earnings have come back in line with the mainstream, the real numbers game for your deal is now focused on the most elementary component in your enterprise: your business model.
Continue reading this article -- and everything on Entrepreneur!
Become a member to get unlimited access and support the voices you want to hear more from. Get full access to Entrepreneur for just $5!
3 months free with code ZENDESK
Presented by zendesk