The Right Startup Advisors Are As Valuable As Money

Warren Buffett advises President Obama, image via Wikipedia

Warren Buffett advises President Obama, image via Wikipedia

If you are a new entrepreneur, or entering a new business area, it’s always worth your time to assemble an Advisory Board of two or three executives who have travelled that road before. You need them before you need funding, and if you select the wrong people, or use them incorrectly, no amount of money will likely save your startup. Even top executives rely on their advisors.

For perspective, you need to remember that boards of advisors, unlike directors, have no formal power or fiduciary duties, but rather serve at the pleasure of you the business owner. But they are not likely to stroke your ego, or be cheerleaders. They need to tell you the truth about you and your business, good or bad. Read more

Martin Zwilling , Founder and CEO, Startup Professionals
November 23rd, 2014

Emerging Entrepreneurship Ecosystems: GIST Net Launches

Today, Gust is proud to join the U.S. Department of State and several other private sector partners to launch The GIST Network (GIST Net), an interactive online network connecting science and technology entrepreneurs in emerging economies.  GIST Net will provide entrepreneurs with the resources and mentorship they need to collaborate, seek funding, and grow their businesses.

This public-private partnership is part of the State Department’s Global Innovation through Science and Technology (GIST) initiative to increase innovation around the world, and was launched today at the Global Entrepreneurship Summit (GES) in Morocco. At GES, over 3000 entrepreneurs, heads of state, high-level government officials, and corporate leaders have come together to exchange ideas and strengthen alliances for a more vibrant global entrepreneurship ecosystem.

The U.S. Department of State developed the idea for GIST Net in response to demand from the international science and technology community for more access to resources and mentorship opportunities. The platform is operated by Gust and streamlines information and resources available from GIST and partner organizations into one central interactive site. Content on the site includes the latest news, events, startups, jobs, funding opportunities, and industry insights. GIST Net also offers interactive discussion boards to help entrepreneurs connect; a mentorship hub with participants from top U.S. universities, Silicon Valley startups, and global businesses; country-specific navigation and content; and access to financing from Gust’s vast early-stage investor network.

This critical resource could not come at a more pressing time. In 2013, the global youth unemployment rate was estimated at 12.6%, or 73 million people. Unfortunately, many of the world’s unemployed youth are concentrated in emerging countries. Technology, innovation, and entrepreneurship are proven engines of economic growth, and are paramount to addressing high global unemployment. GIST NET will help address this issue by bringing essential resources together into a single authoritative destination.

Gust believes in the power of entrepreneurship to change global economies, and is thrilled to to work with the Department of State to help communities across the world strengthen their entrepreneurship ecosystems.

 

Justin Cina , Marketing Director, Gust
November 20th, 2014

Surround Yourself With People Smarter Than You

Einstein image via Flickr by Sebastian Niedlich

Einstein image via Flickr by Sebastian Niedlich

Helpers do what you say, while good help does what you need, without you saying anything. People who can help you the most are actually smarter than you, at least in their domain. Top entrepreneurs spend more time putting the right team in place to accomplish their objectives than they spend on any other components of their job.

Some entrepreneurs are so in love with themselves (narcissistic) that they insist on answering every question, and making every decision. That’s not only impossible, but also counterproductive. Effective entrepreneurs team with or employ people who can provide the answers directly, pertinent to their particular area of expertise. Read more

Martin Zwilling , Founder and CEO, Startup Professionals
November 16th, 2014

The Planned Iteration Startup Launch Minimizes Risk

Eric Ries on Lean Startup methodology, via Wikipedia

Eric Ries on Lean Startup methodology, via Wikipedia

The traditional mode of starting a company has been to plan a serial process, where you complete once all the steps, leading to the “big bang” launch of the company. I strongly recommend a dramatic departure from this model, called “planned iteration” or Lean Startup methodology, where you assume you won’t get it right the first time, so you launch with a minimum viable product (MVP).

This idea was first articulated by Paul Graham in an old essay, called “Startups in 13 Sentences” in which he talked about “making a few people really happy rather than making a lot of people semi-happy.” One of his key points is that “launching teaches you what you should have been building,” and I agree. Read more

Martin Zwilling , Founder and CEO, Startup Professionals
November 9th, 2014

Crowd-Funding Success Usually Brings New Challenges

Pebble watch crowd-funding via Wikipedia

Pebble watch crowd-funding via Wikipedia

Many entrepreneurs seems to be convinced that the “crowd” of regular people using the Internet will somehow solve their startup funding needs, when they sense a lack of interest from accredited investors. Professionals maintain that there is plenty of money and equity for qualified startups, and funding marginal startups via any source will only make more people unhappy.

Well-known crowd-funding platforms on the Internet, led by Kickstarter and Indiegogo, have worked for years to provide non-equity “funding” for many startups, as outlined in my previous article Don’t Be Fooled By All The Hype For Crowd Funding. But safely seeking equity investments from the crowd via the Jobs Act of 2012 is problematic and has still not been defined. Read more

Martin Zwilling , Founder and CEO, Startup Professionals
November 2nd, 2014

Where would I go to invest in startups or emerging companies?

The first question you need to ask is “What country are you in?” and the second is “Are you an Accredited Investor by that country’s standards?”

If we’re talking about the US and you are NOT at the Accredited level ($1 million in investable assets, or $200,000 annual income), then for the moment you are actually not allowed to invest in privately held startups (emerging publiccompanies, of course, you can buy on the stock market like everyone else.)

This will be changing next year, however, because of a new law called the JOBS Act of 2012, which establishes a new, limited type of Crowdfunding for small companies and non-Accredited investors. Once the U.S. Securities and Exchange Commission gets around to writing and releasing the rules for this program (aaaaaaaaaaaaany day now), you will be able to go online to one of many new ‘crowd funding portals’, where startups looking for equity investments will list themselves (similar to the way project crowd funding sites like Kickstarter work today.) Subject to specific rules and dollar limits (10% of your income in aggregate for all investments per year, etc.) you will be able to invest online, just as easily as buying books from Amazon :-)

On the other hand, if you already are an Accredited investor, you can legally invest in startups today without much hassle, putting in as much or as little as you and the company agree on (the average angel investment per company is about $25,000.)

The challenge with this, however, is that while you are allowed to invest, right now the company is not allowed to tell you that it’s raising money! That’s why one of the best options for you today is to join a local angel investor group, where you will work collegially with 25-250 other investors to hear pitches from companies, do your due diligence homework, and then—if you are interested—pool your money with the others to make meaningful investments.

Most angel groups today are connected on a single Internet platform called Gust(of which I happen to be the CEO), which allows their members to easily collaborate both internally and externally on finding and executing investments. As the primary international platform for angel investing, Gust is also used by over 200,000 startups to manage their investor relations, making the industry increasingly efficient.

If you want to strike out on your own, though, there are several online platforms that have recently begun to offer selections of curated startups to Accredited investors. While this has been a bit problematic given the current rules, as of late September 2013 (also thanks to the recent JOBS Act) it will finally be legal for companies to publicly announce that they’re raising money (technically this is called General Solicitation).

Some sites are already offering individual investments to Accredited investors, and hundreds more are gearing up to launch in the coming months. Among the better known ones already in business are AngelListFunder’s ClubSecondMarket,SeedInvestRealty Mogul, and Bolstr.

So, the bottom line is that this is a great time to start thinking about investing in high growth startup companies! Whether you’re an Accredited angel investor or a non-accredited crowd funder; whether you want to invest with a group or on your own; whether you want to meet founders in person or do everything online; whether you want to invest $1,000 or $1,000,000; whether you want to lead an investment syndicate or participate along with other investors; there are—or shortly will be—groups, platforms and services that will be delighted to help you get into the game!

*original post can be found on Quora @ http://www.quora.com/David-S-Rose/answers *

Digital.NYC: The First Ecosystem Hub

On October 1st, 2014, after more than two years of partnership and development, Gust proudly joined the Mayor of the City of New York and IBM in announcing the launch of Digital.NYC, NYC’s new official hub for tech and startups. In the first 36 hours, mentions of the hub were viewed more than 42 million times on social media, and over 100,000 pages on the site were perused. News outlets from USA Today to Mashable to Brooklyn’s Technical.ly praised the hub and its place in the community. For the Gust team, we couldn’t be happier about the warm welcome.

The Digital.NYC hub (an “Ecosystem Hub” as we call it behind the scenes) features every resource and insight for the NYC tech and startup scene including news, jobs, courses, events, blogs, and even available workspaces. This timely information is complemented by searchable, user-managed profiles of every startup, investor, incubator, and accelerator in NYC. Every resource with an address is also integrated into a unified map, where users can peruse the City’s resources in relation to where they live or work.

Content on the hub is drawn from established resources in real-time, such as AlleyWatch, TheMuse, Meetup, CourseHorse, PivotDesk, and over a dozen others. Most of the profiles of startups and investors are provided by Gust. If any member of the community is not using these established resources they can add themselves to the hub via simple forms found on most of the site’s pages. All content is reviewed and ultimately posted by dedicated in-house editors. As the permanent online hub for NYC, Digital.NYC provides a valuable resource to every member of the community that has an interest in this burgeoning economy.

Digital.NYC is the result of a public-private partnership between NYCEDC, the NYC Mayor’s Office, IBM, and Gust. The concept originated with the City and was ultimately built by Gust. IBM partnered to provide sponsorship and hosting on it’s Bluemix cloud platform. The public-private partnership has provided an invaluable benefit to all parties.

For the City, including the de Blasio administration and NYCEDC, the partnership has yielded an enterprise level online platform, a private sector team dedicated to accountability and agile, ongoing improvements, and most importantly an invaluable resource for accelerating the economic development of the region.

For IBM, Digital.NYC provides exclusive community-building in the fastest growing tech ecosystem in the world. This exposure helps in recruiting entrepreneurs for their rapidly growing Global Entrepreneur Program, as well their integrated suite of cloud services targeted towards tech and startup community members.

The tremendous native equity inherent in the City of New York and IBM has been invaluable for pushing the initiative forward, from both a public and commercial perspective. Together, as a team with Gust, the initial results have been extraordinary.

For Gust, Digital.NYC represents a new paradigm for connecting the early-stage ecosystem. Our vision has always been to facilitate the connections between entrepreneurs and early stage investors. From our inception we have been perfecting this process from the perspective of deal flow. Digital.NYC represents our first MVP for facilitating these connections from the perspective of content, and invites new audiences on the fringes of the early-stage economy.

There is no greater power than what results from the seamless connection of physical communities to the information and knowledge that surrounds them. Digital.NYC is the first in the world to make this connection for a localized entrepreneurial community in a comprehensive, meaningful way, and certainly won’t be the last.

Justin Cina , Marketing Director, Gust
October 29th, 2014