At last night’s Mashup event in London, a panel of venture investors and service providers to start ups discussed what are the best digital media growth opportunities.  The unanimous opinion was there more than enough funds available to support great ideas.  For those entrepreneurs trying to find funding, they know it is a big challenge.  And, the panel was rather biased as the individuals were openly soliciting business proposals to invest in.  However, it does make sense for entrepreneurs to work on improving their business plan because resources, though scarce, are indeed available.

Venture funds are shifting priorities during this recession so it pays to understand the effect of background macro trends.  A report by Deloitte indicates that VCs have been decreasing their overall investments, shifting their focus to the best or least risky companies, and increasing their support for later stage investments to get them ready for an exit.  On the average, smaller venture investors are keeping their funding levels steady while larger fund managers are decreasing their exposure to risk where possible.  Only about one in five venture backers are increasing their investments now.  Now some sectors are faring better than others with clean technology investments on the rise and Asia as a geographic region receiving more investment.  On a micro level, does that mean there are less resources for start ups?  Well, as the panel said last night, great ideas will always find funding.  The challenge right now is to get a good idea or innovation to a stage that it is attractive for investment.  That means improving not only the product or service but having the right market focus to commercialise the opportunity.  It is not enough to have a really cool widget or novel service today, but a real business plan for success presented in the right way will attract funding and resources to grow.

To create a great idea, the business plan, message, and proposition needs to be packaged in such a way to be attractive to investors, not with pie-in-the-sky revenue projections but with real, market based, measurable and relevant estimates of the potential for success. Important questions need to be researched like the size of the market opportunity, potential channel partners or routes to market, critical view on the competitor’s share of market including strengths and weaknesses.  A map needs to be derived of stakeholders in the market including customers, partners and competitors with measurable estimates of their potential gain or loss if the product or service is successful in the market.  And, international opportunities for expansion should be assessed and prioritised based on those that are the most actionable in the shortest period of time.  A great idea includes how to best commercialise the opportunity by investing in building the sales team, marketing campaigns, service and support requirements along with associated costs and ROI from these programmes.  All these factors differentiate a great idea.  And for those great ideas there is plenty of money around.