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NextStage Advisors Assists Companies to "Reposition" Themselves For Funding

Collegeville, PA – November 19, 2002 – Companies that want to obtain venture capital may need to "reposition" themselves not just in their target market, but also for investors, according to the management consulting firm T. Williams Consulting, Inc. (TWC). Positioning for investors is more than just telling the story better. In this market, positioning for investors means making sure the fundamental building blocks are in place to ensure long-term profitability and market dominance.

"VCs are looking for companies that can dominate their markets and reach profitability before they need additional capital. Market domination often requires optimum positioning," says Dan McKinney, Managing Director, Business Launch Services at TWC."

"However, there is a paradox between market domination and what VCs need from their investment," adds McKinney.

There are many routes to market domination, but for an emerging company, it often means finding an underserved niche. Often that niche is not sufficiently large to attract VC funding. Therefore, companies need to identify broader markets into which they can penetrate. The challenge in describing a broader opportunity to investors is to not appear unfocused.

Positioning for investors is slightly different than positioning for customers. A key to positioning for investors is defining a credible go-to-market plan that allows the company to reach new markets in a focused manner.

"Without a credible plan, investors will see through a company's desire to describe a larger opportunity than the company can really support," says McKinney.

Another strategy for positioning with investors is to create a new space in which a company may dominate. Unlike the niche strategy, this strategy allows a company to position itself within a large opportunity at the outset. The challenge, however, is credibly defining a new space as compelling and without competition. One of the surest ways to lose credibility with investors is to claim competitive "new ground" when, in fact, the investor knows other companies who can make the same claim.

In the case of Octagon Research Solutions, Inc., a biotechnology Development Partnering Organization, one of the markets that investors might have attributed to them had over 900 competitors! As is the case with many companies, Octagon had many competitors within each market they served. Working with TWC, Octagon was able to identify a new competitive space. Further, the company was able to validate that the probability of each competitor competing in this new space was low. With this new positioning, Octagon successfully attracted the attention of several leading VCs and quickly had a funding commitment for their first VC round.

TWC offers this advice to companies looking to reposition themselves and increase their odds of being funded:

Broaden your market opportunities with new market identification.
Develop a position that leads to a credible go-to-market plan.
Set financial goals that support repositioning.
Create key messaging, supporting data, and marketing tools to show investors.

For more information on how companies can reposition themselves for success, contact TWC at 610-489-2626 or visit www.twilliams.com.

About TWC
Founded in 1996, TWC is a world-class management consulting firm that shapes companies to succeed. We provide a single point of contact for the outsourcing of critical needs, including Business Launch Services, Human Capital Solutions, and Strategic Assessments. From start-ups to Fortune 1000 firms, our track record of helping companies achieve success is impressive and includes experience in Biotech, Energy, Financial Services, Information Technology, Optics, Pharmaceuticals, Telecommunications, and Wireless. For more information about TWC, please contact Lisa Sarachman 610-489-2626, ext. 106 or e-mail l.sarachman@twilliams.com.

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