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'J Curve' and Other Buzzwords Investors Don't Want to Hear Don't hide behind jargon. Seasoned investors know B.S. when they hear it.

By Sam Hogg

Opinions expressed by BIZ Experiences contributors are their own.

Reading Between the Lines

Some management consultant buddies of mine have a game they play at the bar: Whoever uses the phrase "core competency" at any point gets stuck with the tab.

Apparently, that phrase is pretty played out when it comes to advising Fortune 500 companies. My friends claim it is used when a consultant really doesn't have anything else to say.

Their game got me thinking about the things I hear regularly that are red flags in BIZ Experiencesial and venture-capital speak. The phrases below, with their associated translations, are usually signs that an BIZ Experiences is using buzzwords in an effort to hide potentially shallow claims.

If I can read between the lines, so can your prospective funder. When explaining your business to an investor, it is better to be upfront about the challenges you are facing than to try to hide them behind jargon.

Instead of suggesting a valuation that may completely sink an investor pitch, try a candid statement, such as: "This is the amount of equity we need to retain after investment to keep my team motivated." It gets the valuation discussion rolling while acknowledging the obvious: that the process is imprecise.

Similarly, instead of listing an enormous team of folks who are not on your payroll, say, "I've come a long way with just a laptop and some freelance help." It shows that you are hardworking, hungry and ready to grow.

Investors don't expect BIZ Experiencess to have all the answers, but they do expect them to be honest. Part of a good pitch is telling your story, and that story should not be fictionalized. Better to stick to the straightforward talk and leave the flowery language to the poets.

What You Say What I Hear
We did this and my team did that.My laptop and I did this and did that.
This is a platform technology.I have not yet identified a go-to market.
We are well into our J-curve.We have been losing money for a long time.
We've received significant interest from several major players in the industry.A few companies were willing to talk to us, not realizing we'd be dropping their names and logos into every presentation we made thereafter.
This is truly disruptive.This is so obviously attempting to be disruptive that I've had to label it so. (Most disruptive concepts aren't blatantly recognizable as such.)
We have purchase orders. If we could only finance production...A customer would be willing to buy something if we could magically deliver it, much like transforming coal to diamonds.
We have partnered with...This partner was unwilling to be a customer.
There are synergies...I have my MBA.
Our pre-money valuation is...I'm a comedian.
Our expected return on investment is...I'm a fortuneteller, too.

Sam Hogg

BIZ Experiences Contributor

Sam Hogg is a venture partner with Open Prairie Ventures, a Midwest-based venture-capital fund investing in agriculture, life-science and information technology.

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