stark choices at this stage: Find ways to grow the business without financing or call it quits. They took the first choice. They also engaged public-relations professionals, and succeeded in getting several of their most successful corporate clients written up in business and industry trade publications - with their agency mentioned as the key force behind their clients’ success. This publicity gotDavid E. Gumpert, author of Burn Your Business Plan, often tells the story about how he and his partner failed to raise money after sending their business plan around to venture capitalists and meeting with several others to make presentations. Disappointed by the fruits of their labor, they considered giving up on their venture in 1995. Fortunately, on the advice of their board of advisors, they chose to divert their time from massaging the business plan to making sales. The financing, they were told, would come later.

Turns out, they sold enough to stay afloat through 1996. In 1997, sales failed to grow as quickly as they expected, so they decided to seek financing again. This time, they expected positive results would be easier to obtain, after all they were fairly well established now. The board, however, told them to get out there and promote their business and make more sales.

If At First You Don’t Succeed…

Gumpert and his partner instead decided to dust off their old business plan, spend many hours rewriting and updating the plan, and to set out once again to seek financing. And, once again they were turned down. How could this be? In the late 90’s, it seemed like every new Internet-related venture in the world was obtaining financing. In fact, according to the MoneyTree Survey, sponsored by Price Waterhouse Coopers, Venture Economics, and the National Venture Capital Association, the amount of venture capital - $7.7 billion in 1995 -- had grown to $16.4 billion by 1997.

Nonetheless, the failed financing left Gumpert and his partner with two stark choices at this stage: Find ways to grow the business without financing or call it quits. They took the first choice. They also engaged public-relations professionals, and succeeded in getting several of their most successful corporate clients written up in business and industry trade publications - with their agency mentioned as the key force behind their clients’ success. This publicity got

hose to divert their time from massaging the business plan to making sales. The financing, they were told, would come later.

Turns out, they sold enough to stay afloat through 1996. In 1997, sales failed to grow as quickly as they expected, so they decided to seek financing again. This time, they expected positive results would be easier to obtain, after all they were fairly well established now. The board, however, told them to get out there and promote their business and make more sales.

If At First You Don’t Succeed…

Gumpert and his partner instead decided to dust off their old business plan, spend many hours rewriting and updating the plan, and to set out once again to seek financing. And, once again they were turned down. How could this be? In the late 90’s, it seemed like every new Internet-related venture in the world was obtaining financing. In fact, according to the MoneyTree Survey, sponsored by Price Waterhouse Coopers, Venture Economics, and the National Venture Capital Association, the amount of venture capital - $7.7 billion in 1995 -- had grown to $16.4 billion by 1997.

Nonetheless, the failed financing left Gumpert and his partner with two stark choices at this stage: Find ways to grow the business without financing or call it quits. They took the first choice. They also engaged public-relations professionals, and succeeded in getting several of their most successful corporate clients written up in business and industry trade publications - with their agency mentioned as the key force behind their clients’ success. This publicity got

ow. The board, however, told them to get out there and promote their business and make more sales.

If At First You Don’t Succeed…

Gumpert and his partner instead decided to dust off their old business plan, spend many hours rewriting and updating the plan, and to set out once again to seek financing. And, once again they were turned down. How could this be? In the late 90’s, it seemed like every new Internet-related venture in the world was obtaining financing. In fact, according to the MoneyTree Survey, sponsored by Price Waterhouse Coopers, Venture Economics, and the National Venture Capital Association, the amount of venture capital - $7.7 billion in 1995 -- had grown to $16.4 billion by 1997.

Nonetheless, the failed financing left Gumpert and his partner with two stark choices at this stage: Find ways to grow the business without financing or call it quits. They took the first choice. They also engaged public-relations professionals, and succeeded in getting several of their most successful corporate clients written up in business and industry trade publications - with their agency mentioned as the key force behind their clients’ success. This publicity got

eemed like every new Internet-related venture in the world was obtaining financing. In fact, according to the MoneyTree Survey, sponsored by Price Waterhouse Coopers, Venture Economics, and the National Venture Capital Association, the amount of venture capital - $7.7 billion in 1995 -- had grown to $16.4 billion by 1997.

Nonetheless, the failed financing left Gumpert and his partner with two stark choices at this stage: Find ways to grow the business without financing or call it quits. They took the first choice. They also engaged public-relations professionals, and succeeded in getting several of their most successful corporate clients written up in business and industry trade publications - with their agency mentioned as the key force behind their clients’ success. This publicity got

stark choices at this stage: Find ways to grow the business without financing or call it quits. They took the first choice. They also engaged public-relations professionals, and succeeded in getting several of their most successful corporate clients written up in business and industry trade publications - with their agency mentioned as the key force behind their clients’ success. This publicity got the agency’s phones ringing with new prospects, several of which converted into additional sales.

As the business grew, they remained on guard about monitoring their expenses and aggressively collecting receivables. By 1999, they were operating profitably at $2 million in annual revenues, with nearly 20 employees. Also, the amount of venture capital being invested nationally had soared to an astounding $55.5 billion. But, Gumpert and his partner paid little attention to this; their interest in outside financing had dropped significantly. (By 2000, Venture capital availability peaked at $85.5 billion.)

The Power Of Publicity

As Gumpert and his partner carried their success into 1998 and 1999, their promotional efforts eventually attracted the attention of a publicly held company that was seeking the expertise they offered in developing and managing online content. In December 1999 this company acquired Gumpert’s company, NetMarquee. To Gumpert’s surprise, the acquirer never asked to see their business plan; it only wanted to see their financial projections under several different scenarios.

In recounting his financing experience, Gumpert makes two points: First, even during good times, the venture capital route is closed to the vast majority of businesses that seek it out. While it might have seemed back then that nearly every business that asked was receiving venture capital, the reality is most carefully crafted business plans are rejected out of hand by venture capitalists. Second, you’ll be surprised what you can accomplish without the financing