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For entrepreneurs, securing venture capital is a grueling and frustrating process. Even if you have the most promising venture in history, the likelihood of being offered a term sheet is determined by a mysterious series of steps. Until now. Here’s your guide to what happens behind the scenes, when venture capitalists decide whether to invest:

(read it on Medium : The Secret VC Decision Process — Exposed)

 

 
A few years ago, crowdfunding was the latest disruption for startup funding – giving entrepreneurs new options.  Today, the most exciting innovation for startup funding are ICOs – Initial Coin Offerings.  BTxchange puts together a concise but comprehensive “round-up” – in the form of an infographic – of all the major concepts and issues surrounding this new form of funding. 
Very valuable:

Initial coin offerings, or ICOs for short, are the latest craze in the cryptocurrency world. Despite being just a couple of years old, ICOs have managed to attract a lot of attention.

Ahead of the data-packed infographic, they write:

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Browse Twitter, Facebook, LinkedIn, or any entrepreneurship blog, and within minutes you’ll find at least 20 gems of entrepreneurial wisdom quoted from the mega-successful moguls. This wisdom is guaranteed to jumpstart your venture, and inspire you to entrepreneurial greatness.

These “secrets” or “rules” for success sound so powerful that they’re immortalized in motivational posters and animated gifs. They get repeated by mentors, investors and other gurus as unquestioned, timeless wisdom.

Usually this entrepreneurial wisdom is about starting a company, or about the key qualities it takes to be a great entrepreneur: Timeless gems of wisdom, uttered by bona fide successes.

It’s all great advice, with one exception: If you’re a struggling entrepreneur working in the trenches, this wisdom doesn’t apply to you. It’s bad advice.

It’s like listening to one of those AM radio hosts, talking about managing your money: diversifying your portfolio; paying off your credit cards and loans; buying gold, bonds and mutual funds. All good advice. Sound, wise, and completely irrelevant if you’re just graduating college, and looking for a job just to pay the rent.

Not only is the advice irrelevant, it can be downright destructive. It’s as predictable, as it is wrong – for you.

So let’s take a look at 7 of the common nuggets of wisdom and see how they apply to the average startup entrepreneur:

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Getting time and attention from experienced advisors is a rite of passage for the first-time entrepreneur.
Free Advice

Entrepreneurial advisors provide everything from informed feedback, market validation and technical direction, to introductions that can lead to partnerships, investors and customers.

Advisors are often former serial entrepreneurs themselves with well-earned battle scars from risking, failing and succeeding enough times to have sharp
insights into the venture building process. They have a special empathy for the struggling entrepreneur. There’s satisfaction in helping an up-and-coming entrepreneur avoid the same mistakes, and giving them insights that will help accelerate their progress.

Not all advisors have the right experience, and it is very hard for the entrepreneur to know which advisors can truly help their company.  It takes many first dates to find those perfect matches. But advisors kiss a lot of frogs too: Frogs, hunchbacks, maniacs, dreamers, neurotics – and I suspect a few psychotics. Entrepreneurs come in all sizes and for advisors it can be exhausting to try to help them all – particularly those entrepreneurs who don’t really want to be helped, or who are not ready for outside advice.

So, for the entrepreneur about to go seeking advice from advisors, here’s some blunt, very blunt, advice:

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I get bored and cynical every time I read a blog post from a first-time entrepreneur who has “discovered” the 7 amazing secrets to entrepreneurial success.  Usually their amazement is because they were so inexperienced in the first place, and some basic truths about business and entrepreneurship never occurred to them in the first place.  Much like how an 18 year-old living on their own for the first time is amazed to discover that ‘if you don’t pay your rent on time, the landlord will evict you.’ It’s an important lesson, but hardly an amazing secret that now qualifies them as an expert.

SFrustrated-PixleBayo many new entrepreneurs self-anoint themselves an expert because they’ve started out so clueless in the first place. Expertise is not measured in the difference between zero knowledge and what you have just learned – expertise is what you know more, or do better, than the majority – or better than other experts.

OK. End of that preemptive rant.

Now an exception.

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Icon of Money in the Hand on Digital Background.Let me start this post by stating how much respect I have for venture capitalist Fred Wilson.  He is easily in the top-5 influential thought leaders in the entrepreneur-investor ecosystem. His blog “AVC” is required reading for everyone on both sides of the table. But today he really pulled the trigger too quickly on a post.

He was postulating about a product idea – where entrepreneurs might pay for a report that lists what each venture capital firms’ investing criteria is, based on their track records  (something that arguably should be on their websites).  Let’s set aside for a moment that he is proposing a $100 fee for each entrepreneur seeking funding, here’s the crux of his argument:

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As an investor, advisor and mentor to entrepreneurs and new ventures, I get to hear a lot of pitches – whether as a judge in a competition, in a boardroom, classroom or a face-to-face pitch. After a while, they all start to sound alike. In fact, when investors get together, they lament (or even parody) how all the pitches sound alike. To be fair, as an entrepreneur, I used to lament with other entrepreneurs on how predictable venture capitalists can be in their responses.

Today, giving more evidence that I apparently have way too much time on my hands – I created this “Pitch Bingo” game for investors and advisors.   The next time you are listening to entrepreneur pitches at an event, click on the Entrepreneur-BS Bingo Game link, and you will get a BS-Bingo card (everyone’s card has a different random combination of entrepreneurship buzzwords).   Cross off the word when you hear it.

 

Entrepreneur-BS Bingo Game CJs Entrepreneur-BS-Bingo

CJ’s Entrepreneur Pitch Bingo

 

The first person who completes a BINGO with a row or column must shout out Zuckerberg!
And Tweet to #CJ-BS-BINGO.

And just to be fair, I’ve also created one called Investor-BS Bingo!   Now entrepreneurs can keep track of the predictable jargon investors mindlessly toss out during pitch meetings.   (notice the phrases “Term Sheet”  or “Yes” don’t appear – since they say it so rarely).

CJ’s Investor-BS Bingo

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