| I am not writing this to create a list of
| |
| | need on board in management to be
|
| things not to say so people can hide the
| |
| | successful. If this were true, you are
|
| facts or in any way mislead potential
| |
| | either spending WAY too much money on
|
| investors. On the contrary I personally
| |
| | staff, or you do not understand the
|
| believe you must be 100% upfront with any
| |
| | skills you will need to bring on as the
|
| potential investors, and even volunteer
| |
| | business grows and evolves. This is
|
| some weaknesses to be credible. I am
| |
| | never true and saying it is like waving a
|
| writing it to help entrepreneurs and CEOs
| |
| | flag saying I am an amateur. All
|
| "design" these issues out of their
| |
| | investors assume you will need to hire
|
| business so they never have to say them.
| |
| | other key players and set aside a stock
|
| Although there are certainly many
| |
| | option pool for that purpose.7. We are
|
| exceptions to these, as a general rule
| |
| | going to sell this product to everyone
|
| there are many good reasons why all of
| |
| | (even in a single industry), because
|
| these things should not be part of your
| |
| | everyone can use it. This worked during
|
| company, if you are looking for outside
| |
| | the bubble for a while when $30 million
|
| investors. I have discussed some of the
| |
| | was being dropped (foolishly) at a pop to
|
| logic why, but this should not be
| |
| | fund some broad horizontal plays. Today,
|
| considered a comprehensive discussion of
| |
| | the smart money is mostly funding
|
| the reasoning behind each item. You
| |
| | companies going after niches, and maybe
|
| should also realize some of the reasons
| |
| | some verticals (with top management
|
| are a function or perception, of the
| |
| | teams, ideas and markets). Virtually
|
| market. I would never say they all make
| |
| | every company today needs a market entry
|
| sense all the time. Each situation is
| |
| | strategy that is narrow and focused to
|
| always different.Most entrepreneurs
| |
| | establish them as the "go to company" for
|
| greatly underestimate the difficultly and
| |
| | a particular problem or solution. You
|
| time required to succeed at this task.
| |
| | NEED to be the big fish in a small pond
|
| They also underestimate the opportunity
| |
| | first because small fish in the ocean get
|
| cost to their business while they are
| |
| | eaten alive more often than not. You can
|
| "away" focusing on something else. You
| |
| | add niches, products or expand to an
|
| only want to raise outside capital, if
| |
| | entire vertical later after proving every
|
| you really NEED to have capital to grow.
| |
| | element of your business in a single
|
| I am recommending to many CEOs I coach
| |
| | niche. By the time you get there so much
|
| and mentor today that because it is so
| |
| | can change it is usually even a waste of
|
| difficult to raise money today, and
| |
| | time figuring out what that order will be
|
| valuations are not great, it would be a
| |
| | in advance. Markets and technology are
|
| far superior alternative to spend the
| |
| | too dynamic today.8. We have no
|
| same amount of time selling, or adding
| |
| | competition. This is virtually never
|
| value to your business in other ways,
| |
| | true, as people are doing something to
|
| than to spend six to twelve months
| |
| | deal with the problem you solve today. If
|
| chasing investors. In many cases
| |
| | you are a restaurant then the grocery
|
| spending the same amount of time and
| |
| | store across the street is your
|
| effort selling your products, or service,
| |
| | competition. You can almost never view a
|
| could generate just as much money and not
| |
| | market that narrowly, unless you just got
|
| dilute your ownership and subject you to
| |
| | the patent on nuclear fusion, even then
|
| the whims, regulations and covenants of
| |
| | coal, oil, hydroelectric and solar are
|
| bringing in outside capital. This does
| |
| | still competition. Besides you really
|
| not, however, mean you should not develop
| |
| | can't know who else might be working on
|
| a complete business plan. This process
| |
| | the problem and if it is an attractive
|
| will greatly increase your chances of
| |
| | market you will clearly have followers.
|
| success whether you are raising outside
| |
| | So you need to articulate how you will
|
| capital or not.1. I have not invested my
| |
| | stay ahead of competition either
|
| own cash in the business, but have only
| |
| | way.9. Only our management team is
|
| put in lots of sweat equity. Experienced
| |
| | qualified to develop and execute this
|
| investors know that a start-up is a
| |
| | business. This is about as false, naive
|
| roller coaster ride of both highs and
| |
| | and arrogant a statement as anyone can
|
| lows. They want founders to prove their
| |
| | make, so don't even come close. To say
|
| commitment by investing their own money
| |
| | you are the only people in the world who
|
| to the point where it will REALLY hurt if
| |
| | can do this is not only terribly
|
| they walk away during tough times. Skin
| |
| | unlikely, it is in FACT something you can
|
| in the game is your vote of confidence,
| |
| | not possibly know for sure, because you
|
| so don't expect others to invest if you
| |
| | don't actually know everybody else do
|
| don't. This does certainly not have to
| |
| | you? So it is always a false statement
|
| be all your personal net-worth, but it
| |
| | and shows overconfidence. It is better
|
| must be a significant portion. You can
| |
| | to err on the side of saying something
|
| take out a home equity loan, borrow or
| |
| | like: "we know there will be competition
|
| withdraw from retirement funds, or just
| |
| | and here is how we will be cheaper,
|
| invest personal savings. In the end this
| |
| | different, better and/or faster."10. Our
|
| will pay off, if you do it right, because
| |
| | projections are very conservative. This
|
| it will make you more efficient with
| |
| | is the most overused expression of the
|
| capital usage and allow you to bring in
| |
| | lot and I would guess it gets said in
|
| investors later, after you have created
| |
| | more than ninety-percent of investor
|
| some value and increased your company
| |
| | presentations. The fact is that
|
| valuation. Ultimately, if you are
| |
| | entrepreneurs are always optimistic; they
|
| successful, you will likely own more of
| |
| | wouldn't be entrepreneurs if they were
|
| the company as a result.2. This (or that)
| |
| | not, as they are certainly fighting the
|
| market research firm said this market
| |
| | odds. Any good investor is going to make
|
| will be a $2 billion market in five
| |
| | their own judgements on the ramp rate of
|
| years, so all we need is 5% of that
| |
| | sales and expenses anyway, so this is
|
| market to build a $100 million company.
| |
| | better left unsaid. The fact is you
|
| Counter institutively this is basically
| |
| | never know because you never know if
|
| saying you have NOT done your homework,
| |
| | there are fifty other companies working
|
| and do not really know who your customers
| |
| | in stealth mode on the same idea.
|
| will be. This is "top-down", not
| |
| | According to research 32% of angels site
|
| "bottom-up" market research. Besides
| |
| | "unrealistic financial projections" as
|
| most of these analysts firm's lost huge
| |
| | the number one mistake made by
|
| credibility when the bubble burst and
| |
| | entrepreneurs.11. We don't know how much
|
| people realized some projected numbers
| |
| | money we need, or we can do it on
|
| beyond what the population of the entire
| |
| | anything between $500K and $10MM.
|
| planet for Internet users. You need to
| |
| | Investors want to know you have a solid
|
| describe, if not actually list, the exact
| |
| | plan. They also all have a certain
|
| customers where you can win in most cases
| |
| | amount they want to invest. Do your
|
| and why. Research says that 32% of
| |
| | homework and understand exactly who you
|
| angels site weak market analysis and
| |
| | are talking to. You should know exactly
|
| analysis of the competition as the most
| |
| | what you are asking for before you go in
|
| critical mistake entrepreneurs make in
| |
| | and have a business plan with a financial
|
| their business plan. You must design
| |
| | plan that matches this. Asking for the
|
| your launch strategy around a particular
| |
| | wrong amount is as good as blowing the
|
| customer profile and offer something that
| |
| | presentation entirely. Although you may
|
| that customer cannot get elsewhere.
| |
| | be able to execute a business plan more
|
| Smart investors would prefer an unfair
| |
| | slowly, yet successfully on less capital,
|
| advantage in a smaller focused market,
| |
| | and you may have a couple of scenarios
|
| because the marketing and selling costs
| |
| | figured out (you should), you can really
|
| will be lower (concentrated) and the
| |
| | only show one plan to any particular
|
| sales close rate higher. This also shows
| |
| | investor.Level of Management Team
|
| you know what you are out to accomplish
| |
| | NeededGetting investors today requires a
|
| and are focused on a smaller market you
| |
| | strong team, idea and market (not the
|
| understand well and can win.3. My spouse
| |
| | same as idea). What level of team do you
|
| (or any immediate family) will be our
| |
| | need to have a good likelihood of
|
| other senior officers. - Or we are going
| |
| | obtaining angel financing? Here is a
|
| to use my brother's company for
| |
| | chart of the level of management team you
|
| distribution (or anything else).
| |
| | will likely need and you can interpolate
|
| Investors do not like nepotism and also
| |
| | between these levels. Currently, you
|
| know that a divorce could destroy the
| |
| | will likely need to reach level five to
|
| company. They are taking enough risk
| |
| | bring in any angel investors and probably
|
| already, so why should they add another
| |
| | a level 8 to get any money from VCs.
|
| layer of risk with the divorce rate at
| |
| | This also assumes you have an attractive,
|
| 50%? Why should they believe out of all
| |
| | and large, potential market, some
|
| the management in the world your brother
| |
| | barriers to entry and a good head start
|
| is the best qualified? Also, there can
| |
| | or patent protection.ConclusionYou need
|
| be no conflict of interest issues with
| |
| | to pull out all the stops today to obtain
|
| "deals" that could be perceived as
| |
| | angel financing. This means getting
|
| favored or the result of nepotism. This
| |
| | further on less money than ever before.
|
| allows for shifting of costs and revenue
| |
| | Which in turn means better focus and
|
| in ways that are totally legal, but at
| |
| | using virtual company techniques to get
|
| the same time unfair to the investor due
| |
| | much further on your OWN personal
|
| to subjective factors. This is fine in a
| |
| | resources, and/or friends and family
|
| wholly owned private company owned by a
| |
| | money. It also means pulling together a
|
| single individual (a lifestyle company),
| |
| | team of people that address all the major
|
| but should not really ever happen with
| |
| | risks in the business. This requires
|
| outside investors. Enron, Adelphia,
| |
| | creative deals to bring people in and
|
| Worldcom and Tyco are perfect examples,
| |
| | probably not be paying them, certainly
|
| and these have made everyone more aware
| |
| | not full-time, while you are creating
|
| of how easy it is to abuse executive
| |
| | real value in your business. Investors
|
| positions. It is even possible that in
| |
| | want to invest in something that already
|
| the future institutional investors who
| |
| | has value built in, not an idea or
|
| allowed this could be perceived as
| |
| | business plan with a "one-man show"
|
| violating their fiduciary
| |
| | today.The most common mistake made today
|
| responsibilities and have liability.
| |
| | made by entrepreneurs is going out
|
| After the fact, if something went wrong
| |
| | looking for money before they are ready.
|
| and the company shut down, the perception
| |
| | The competition is fierce out there, so
|
| could be that things were done
| |
| | don't burn your best personal contacts by
|
| improperly. The room for interpretation
| |
| | approaching them with an incomplete or
|
| on the dissolution of assets could easily
| |
| | undeveloped business plan or company. If
|
| be perceived as improper, even when it is
| |
| | you have not successfully raised money
|
| done right, due to the wide room for
| |
| | before, get help from someone who has.
|
| judgement on the value of the remaining
| |
| | C-Level Enterprises offers a complete
|
| assets of any company that is closing.
| |
| | financing review and critique that is
|
| Since this is effectively a fire sale
| |
| | guaranteed to improve your chance of
|
| prices will be well below "fair market
| |
| | obtaining financing. Go to for further
|
| value". In short, avoid any and all
| |
| | information. Also see for audio courses
|
| conflicts of interest, whether real or
| |
| | on raising investor capital.Mr. Robert
|
| perceived.4. I am going to also be doing
| |
| | Norton, is an author of four books,
|
| some consulting to cover my expenses
| |
| | speaker and President and CEO of C-Level
|
| because of my low salary. Or I have
| |
| | Enterprises. He has over 15 years as
|
| other businesses to run also. Or
| |
| | full-time President and CEO of numerous
|
| anything else I invent I will personally
| |
| | successful companies. Two grew to over
|
| own the rights to. These are all
| |
| | $100 million in annual sales while Mr.
|
| variations of the same theme. You are
| |
| | Norton was there and one grew from $0 to
|
| not fully committed to the business you
| |
| | over $1 billion in revenue today. His
|
| want them to put their money in. This
| |
| | experience spans all key disciplines
|
| might work for Donald Trump, but for
| |
| | needed to start, grow and exit businesses
|
| anyone who has not made his or her first
| |
| | in several industries. He can provide a
|
| $25 million don't expect that kind of
| |
| | breath of experience and perspective
|
| latitude. Investors want and deserve
| |
| | across all disciplines that only
|
| your full-time attention as soon as they
| |
| | experienced CEOs can.He founded and run
|
| invest. This might be OK while you are
| |
| | the exclusive CEO & Entrepreneur Boot
|
| pulling together your plan and don't have
| |
| | Camp - The Art and Science of Business
|
| outside investors yet, but investors are
| |
| | Design. See 22 total years experience,
|
| buying YOU lock, stock and barrel and
| |
| | including former positions as Senior
|
| want your full-time attention and focus.
| |
| | Software Architect, VP Engineering and
|
| This not only means your time at the
| |
| | CTO, Mr. Norton can understand both deep
|
| office, but as a CEO, or any senior
| |
| | technical issues and strategic management
|
| executive really, it also means they want
| |
| | issues. So often operations, product
|
| to own your thinking in the car and
| |
| | development, sales and marketing issues
|
| shower, and all your ideas that are a
| |
| | are deeply interwoven, requiring
|
| result of your work.5. We have it all
| |
| | multidisciplinary experience to
|
| figured out. The fact of the matter is
| |
| | effectively solve problems. Mr. Norton's
|
| that the only guarantee you can make is
| |
| | breath of experience allows for complete
|
| the plan will evolve and change and the
| |
| | validation and/or improvement of entire
|
| business plan is pretty much guaranteed
| |
| | business models for maximum growth and
|
| NOT to happen. Only naive investors
| |
| | profit. He is also a specialist at
|
| would think you are going to do
| |
| | designing long-term competitive advantage
|
| everything that the plan says and not
| |
| | into businesses so profit margins can be
|
| make changes as you go. If they really
| |
| | maintained and stockholders build
|
| believe this, you probably do not want
| |
| | sustainable revenue and profits that can
|
| them as investors anyway. If you say
| |
| | justify high multiples on exit.He is also
|
| this, you are basically saying you are
| |
| | the author of The Startup Manual, the
|
| wet behind the ears or unrealistic.
| |
| | first roadmap to starting and growing any
|
| Besides, if you really had it all figured
| |
| | business to $100 million in sales,
|
| out and proven, you probably would not
| |
| | available at complete biography is
|
| even need their money, you would be
| |
| | available at a resource for CEOs,
|
| "bankable" and pay prime rate instead of
| |
| | entrepreneurs and C-Level executives at
|
| twenty to fifty percent per year to get
| |
| | early-stage companies.
|
| equity dollars.6. We have everyone we
| |
| |
|
