start up funding business execution and stuff in bstart up funding business execution and stuff in bThis is an unedited running commentary a collection of thoughts about Angel and venture investing A random brief of what experience has shown to be important to entrepreneurial success Articles
Entrepreneur Issue! - Why do many startups fail?
2007-10-03 04:43:00 I got the following question from an entrepreneur and I thought I share it with everyone.“Why do many startups actually fail? In my observation, i have felt that there are many a startups which have a brilliant idea, a genuine team to execute that and also a good support for the product they intend to build, but still the companies fail to break even. I would love to hear from you your views on why startups fail? cheers, Vaibhav”There may be a thousand different reasons, but here is an attempt at simplifying a clearly completed question. Here is a stab at a few common reasons:1- Chemistry: often entrepreneurial teams fail to have the winning chemistry together ; it is a combination of reaching for perfection and greatness and ability to work together to compromise their way to success.2- Too much Brilliance: a lot of companies fail because the market is not ready for the innovation yet and the entrepreneurs focus on their vision as opposed to what the customer wants or needs –... More About: Entrepreneur , Startups , Rene , Issue
Entrepreneur Issue! The viral marketing mystery
2007-09-15 03:33:00 These days almost every business plan has a viral marketing component to it.How do you get customers? Viral marketing to the rescue; there seems to be an “understanding gap”.I have made it a point in the past few weeks to ask every entrepreneur that brings up the issue “what do you mean by viral marketing?” The diversity of answers and interpretations are fascinating. The responses include, funny videos on Youtube, a page on Myspace, putting definitions on wikipedia, planned message board entries, and of course having a blog. What is interesting is that the definition of viral marketing is reduced to the channels of distributing a message vs. the message itself.To have a viral marketing campaign, you must first have a message that is viral and contagious like a virus, a message that contaminates others as soon as they hear it, to the point of passing it to others. 93% of all sales are initiated through word of mouth, and viral marketing is intended to ignite this process. BU... More About: Marketing , Entrepreneur , Viral Marketing , Mystery
Entrepreneur Issue! Nothing wrong with a Life style business!
2007-09-11 01:26:00 Speaking to entrepreneurs everyday has lead me to believe that most entrepreneurs really like to build a Life Style business and are not in tune with what motivates Venture Capital firms or Angels to invest.So what the heck is a Life business?1. You build it to operate for many years to come2. It will generate good income for you and you absolutely love doing the job3. you want to be in control – who needs a boss!4. This would be a great business for my children to get involved withIf your answer to any of the above questions is yes … well you are on your way to build a Life Style business. Where you do not need a very very large market sizes, you do not need disturbing technology, you do not need a proven management team from Ivy league schools, you do not have to report to a board who is pushing for faster and more aggressive results all the time, and most importantly you do not need to exit (sell out).So what is wrong with starting a Life Style business – well absolutely no... More About: Business , Entrepreneur , Wrong
Entrepreneur Story #4: Dreams vs. Reality
2007-07-11 03:45:00 The Mobile market is HOT. At a conference in the valley (silicon that is), out of every three entrepreneurs I talked to two and half had the next big mobile application. The biggest idea is the next ubiquities operating system. A system that is running all mobile phones, allow transportability of applications, improves the development process of new applications, etc. etc.I had a conversation with one these operating system companies yesterday – the fifth or sixth company in the same space I have spoken to in the past couple of months. Naturally, each one has few strengths and some weaknesses and each one has some unique angle and approach. Without a doubt the idea is big and if one could become the standard operating system – the next DOS is conceived and the next Microsoft born – a very nice dream.What I found as common between all of the entrepreneurs I talked to was the underestimation of the power of the big OEM’s (Samsung, Nokia, and Motorola) in controlling their... More About: Dreams , Reality , Story , Entrepreneur , Rene
Why bootstrap your business? So when is bootstraping not a good idea?
2007-07-01 01:47:00 There is just too much to say about the topic and I have been warned about being too verbose with lengthily postings so this is a 3 posting series. Following is the third and last posting:So when is bootstraping not a good idea? Almost never!However … there are times that injection of external funding is crucial to the delivery of value and no revenues can be generated unless significant investments are made. In these cases the bootstrappong duration may be shortened but not eliminated.When things are not in your control or costs are very high:1- You are in the pharma or medical devices business and an FDA approval is needed before you can sell – these ventures usually involve significant upfront research and multiple scientists , require expensive lab equipment and need to have trial results from hundreds to thousands of people. In this cases the SBIR and other grants are critical and should not be overlooked – not only they are non-dilutive, they help provide credibi... More About: Business , Idea , Good , T A G , Sine
Why bootstrap your business? 2- Some Good Reasons
2007-06-19 03:14:00 There is just too much to say about the topic and I have been warned about being too verbose with lengthily postings so this is a 3 posting series. Following is the first posting:Some Good reasons to Bootstrap1- Bootstrapping ensures that you build your business on legitimate, real world value propositions. You truly focused on customer value from day one.2- Bootstrapping initiates the critical sales learning process sooner, not later.3-Bootstrapping does not waste money: the focus here is on the early and closer customer contact. 4- Bootstrapping accelerates time to market and time to profitability – if you can not possibility wait for the next version to get ready, you compromise and try to make money from what you have.5-Bootstrappers are less likely to make big, fatal financial mistakes. Being alert about survival makes people much more alert about catching fatal mistakes.6- Bootstrappers are forced into unconventional thinking – necessity is truly the mother of invention.... More About: Business , Reasons , Sine
Why bootstrap your business? 1- The big picture, 2- some good reasons, and
2007-06-19 03:05:00 There is just too much to say about the topic and I have been warned about being too verbose with lengthily postings so this is a 3 posting series. Following is the first posting:The big picture of bootstrappingBootstraping, in my opinion, is not about conserving cash or paying out of your credit cards (although those may become ways to achieve it). Bootstrapping is about taking the right action at the right time. It is about making quick and timely decisions. And it is about being focused on cash flow and incremental progress.There are a few key elements / drivers that make bootstrapping generally lead to better results:1- When in Bootstrapping mode, the margin of error is much smaller and more importantly the entrepreneur knows it. This causes decisions to be more focused on generating results and on making money, and that is a very good thing.2- The risk is personal and decisions are reduced to absolute “value” delivery. Being the one who would hold the bag if thi... More About: Business , Picture , Reasons , Good , The Big Picture
Real Entrepreneur Story #2: It is about making money NOT raising money
2007-05-23 07:54:00 The entrepreneurs were clearly fatigued when they waked into my office. They had raised close to a $1,000,000 at a whopping valuation of close to $10,000,000. The friends and family investors were joined by a couple of angels who were fortunately (as the entrepreneurs claimed) very hands off. Unfortunately, the bank balance was almost $2000. The product is almost there they claimed and the patent was almost approved. The product a video / picture tool was indeed slick, but I had to scratch my head as how to make money from it. The exit was rather unclear and the deal was over shopped; as almost every VC had looked at it and passed – the problem; the valuation was too high for the progress made, the exit was not clear, and the had no idea as to how to making money.Nice tool! How have you tried to monetize? the answer was “we are trying to build a community” also, “we can offer the tool as an ASP model to enterprise customers”, “we have a customer that uses the tool on his... More About: Money , Story , Entrepreneur , Real , Rene
Real Entrepreneur Story #1 – What to do next?
2007-05-07 06:53:00 Over the weekend, I met with a very hardworking and smart entrepreneur. He operates a business in the medical devices space. He is the founder, has over 20 patents to his name and yes, they are making money! The dogs are in fact eating the dog food. He has successfully raised over $5 million and has managed to put the company on the path to make close to $10 million in revenues this year. The company was in a terrible shape a year ago as he had hired a very ineffective CEO and was dealing with a weak Board of Directors (a story for another time!) – no questions asked the man can execute and deliver!We spent a few hours together and he and his partner outlined their strategy of raising about $20 million from VC’s at a valuation of over $40 Million (because they thought it was worth that much!) – after discussions it became apparent that that they really did not need that much money to further increase revenues by over 5 fold and they just wanted to be safe! Not considering... More About: Story , Entrepreneur , Real , To Do , Rene
What kind of an entrepreneur are you?
2007-04-23 01:40:00 In my days, I have met with many many entrepreneurs. We have agreed and disagreed on things, learned from each other, and experienced disappointments and successes together.Here is “one” way to slice and dice the group.The Pure DreamerThe pure dreamer is filled with new and novel ideas -- innovations and schemes that will make a lot of money -- for some, every once in a while they see their pictures on the front page of the Time magazine . Despite their potential, majority of these folks never cross the bridge and get to the “doing side.” They are always waiting for the right time and almost always regretful (if only, I had that idea a long time ago, ..). My advice to this group is to either admit that you are a dreamer (get it over with) and then enjoy the dreams and the innovations without regret, frustration and the feeling of failure OR “just do it” as the saying goes; the short cut to results may be finding a partner with a different character profile! The ... More About: Entrepreneur , An Entrepreneur , Rene
My Education
2007-04-23 01:21:00 I am quickly learning that writing a blog requires a lot of discipline. You need to be thoughtful and quick - My apologies for being a slow learner - I’ll get there. It would be great, however, if you could help me with topics – what interests you? Here are some topics I am looking at: Weekly tips on effective execution, this is not a how to work harder guide! but a how to be more effective series of thoughts.A session with and entrepreneur -- documenting a conversation or two every week with some of the entrepreneurs I meet and discuss funding with (naturally, the name of the company & founders, as well as, the business details will remain confidential) – the good, the bad and the ugly. The idea here is to take real life interactions and turn them in to a learning experience – this is NOT an interview, but rather a one sided (my) perspective. Random Tips on valuation, term sheet, trends, concerns, etc.ALL from the Investor’s perspective.Any thoughts? More About: Education
The truth about Venture Capital and Angel Investing is …
2007-03-29 04:35:00 Last week, I was on a panel with other investors discussing the “do’s” and “don’ts” of angel and venture capital investing some one from the audience fired a series of intriguing compounded questions ” why are the VC’s so illusive?, why don’t they have all their information available? Why don’t they disclose how they come up with their valuations? Why are the selection criteria’s so undefined????”All valid questions and valid statements – the event made me think that entrepreneurs view of the equity investment community is entirely different than that of the inner circle and this mismatch of perceptions is not disruptive and unhealthy.So let’s talk about the truth about the Angles and the Venture Capital firms; here is a few points to start with:1- Looking for Money Vs. looking for a partner: investors look for a partner that they can invest in and help grow a business. Entrepreneurs look for money and often feel (although they may claim otherwise) that i... More About: Truth , Venture Capital , Angel , Investing |
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