Seek local investors, firms told

By Mia A. Aznar

Wednesday, April 20, 2011

TO get investors to fund a business, a chief executive officer of an electronics company believes it is best to look among local candidates rather than foreign investors.

Sinohub CEO Harry Cochran, who spoke before Cebuano businessmen during a money and investment forum, said locals are more familiar and more accepting.

Sinohub is an electronics company whose major growth driver is custom-designed mobile phones for customers in developing countries. It is listed in the New York Stock Exchange, has about 900 employees and had revenues of $128 million in 2009.Cochran said it is easy to find investors online, as information is out in the open on the web and networks like LinkedIn allow the public to find the kind of people they are looking for.

But he advised them to look for local investors first because they could be looking for similar companies to invest in.

Another tip Cochran gave entrepreneurs in need of investors is for them to develop their “elevator pitch.”

He said that this means they should be able to convince the potential investor to pour money in their business during a short elevator ride.

“It just takes 30 seconds to interest them. You can do a lot in 30 seconds with practice,” Cochran said.

In presenting the company’s story and what led to the creation of it, Cochran said it was best to keep things simple. However, he said that the investor should see that the company’s people are passionate about what they have.

He also said that those who pitch should come with a “slick presentation” complete with a business plan and projections for three to five years.

He said the presentation should include the intended market, the uniqueness of the product to generate excitement, the competitors, the defensible position in the industry, how the money will be used and the potential of the company.

“At the end of the day, people want to see numbers,” he explained.

Cochran, though, cautioned those who pitch to bring up the amount of money at the beginning of the presentation.

While he said that they should first figure out the highest amount they can ask for without turning the investor away, he said that it is best to make sure this is enough.

He said that if a price is set, it will not get higher.

He also warned against claiming there is no competition.

“Maybe it means there’s no market,” he said.