Early in my career, I worked for a commercial bank. Most of the new Lending Officers hated the dreadful Wednesday morning Credit Committee meeting. There, the Officers presented client requests to the members of the Credit Committee, which consisted of the President, the senior risk officer, and a few other top lending officers, and hoped they were approved. But hope is not a plan.<\/p>\n
The seasoned Lending Officers had a plan that was usually successful for their clients in these dreaded meetings. They understood risk and the likely questions that the committee members would ask at the meeting\u2014and they always had an appropriate plan. Due to the limits of time during their presentation some item or characterization would be bypassed. They included anticipated questions in the lending documents. There may have been a request for additional collateral, a higher interest rate, shorter tenor or term or personal guarantees. The seasoned Lending Officers almost always had the client approval before the committee meeting and these additional requests were in their \u201cback pocket.\u201d As a result, when the conditional approval went through, the Lending Officer often had all the required additional documentation before the credit committee members returned to their office.<\/p>\n
How were these lending officers so successful? Yes, in part due to experience. Mostly, it was that the loans were pre-sold (not in the mortgage way) to the credit committee members before entering the meeting. The deal was pre-shopped, and championed by one or two credit committee members. Walking in, the lending officers knew approval was in hand.<\/p>\n
Entrepreneurs going to Angels also need to find their champion and pre-shop their deals. They need to find someone on the inside who will be the evangelist for the deal. Entrepreneurs need to get past the Angel\u2019s investment committee. This is usually the investors\u2019 spouse.\u00a0 The pitch by the entrepreneur must be clearly articulated to ensure investors clearly understand the value proposition and can articulate how the investor can get investor committee approval.<\/p>\n
If an entrepreneur can articulate their value proposition and demonstrate that their team is the best to execute on the new venture. Then go\u2014and pre-sell the deal. The entrepreneur will appear confident, clear and worthy of investment of the Angel\u2019s time and money.<\/p>\n","protected":false},"excerpt":{"rendered":"
Early in my career, I worked for a commercial bank. Most of the new Lending Officers hated the dreadful Wednesday morning Credit Committee meeting. There, the Officers presented client requests to the members of the Credit Committee, which consisted of … Continue reading