As an investor, what are the most important items that a startup must have for you to invest?

  1. Large and growing market
  2. Real domain expertise
  3. Provable product need
  4. Scalable business model
  5. Competitive advantage
  6. Platform/partnership/bizdev/API strategy
  7. External validation (ideally traction and/or passionate customers)
  8. Viable business structure and cap table
  9. Reasonable valuation
  10. Proven team (tech/product/design/marketing/sales/domain/etc.)

But most important of all, it must have an entrepreneur on whom I’m willing to bet. And the attributes I look for in that entrepreneur are: Read more

5 Keys To Effective Entrepreneurial Team Mentoring

Richard Branson photo via en.wikipedia.org

Richard Branson photo via en.wikipedia.org

I’ve always wondered why every executive meeting has to be one hour in length, or longer. That’s probably a tenth of your day spent on one issue. It better be a critical one, because you have a hundred others waiting. I believe you can be much more productive, as well as a more effective leader, if you approach most meetings as mentoring opportunities, and limit them to five minutes.

In a traditional meeting, another person presents you with multiple options, and you make the decision. With the five-minute mentoring approach, the mentee asks for your support in their decision, or asks for your insight on the considerations for them making a future decision. Which approach do you think is more fulfilling for them, and best for your company in the long run? Read more

Martin Zwilling , Founder and CEO, Startup Professionals
January 26th, 2014

Which angel investing journals are the most useful, either online or in print?

There are actually no angel investing ‘journals’ per se, because there simply are not enough active, professional angel investors to make a market :-) .  There are, however, quite a few blog posts on the subject, although most are written for an entrepreneurial audience, rather than angels themselves. And there is one really excellent weekly podcast to keep you up to speed. Read more

What are some ways you can keep track of startups you are evaluating/diligencing/investing in?

This is obviously a softball question that I’ve been Asked to Answer, as I’m the Founder/CEO of Gust. The answer, of course, is Gust—because that’s exactly the purpose behind the platform!

Gust is the infrastructure that underlies much of the professional world of early stage finance. It is used by hundreds of thousands of companies in 195 countries to organize all of their investor relations material; it is used by over a thousand angel investor networks, venture capital funds and startup accelerators to manage their deal flow and collaboration; and it is used by over 50,000 individual accredited angel investors in 75 countries to collaborate with their investor peers and keep track of the startups they are evaluating/ diligencing/ investing in. Read more

Entrepreneurs Relish The Challenge More Than Money

Over the years, I’ve had the privilege of working with some of the best entrepreneurs in Silicon Valley and elsewhere. On the average, the entrepreneurs I know are living on Ramen noodles. But one thing they all seem to have in common is a love for learning and change. They rush in with a passion to better the world, and money is just an indication of their progress.

The successful ones then invest their time and money in furthering their knowledge base. I’m not talking about academic classes, because at best these only teach you how to learn. In these days of rapid change, most experts believe that the facts college students learn as a sophomore are obsolete before they exit their senior year.

Read more

Martin Zwilling , Founder and CEO, Startup Professionals
January 19th, 2014

Entrepreneurs Must Not Confuse Action With Results

Too many entrepreneurs confuse actions with momentum and results. We all know someone who repeatedly tells us how “busy” they are, when it’s hard to see what they get done. Momentum is moving things forward (mass x velocity). Founders or employees in constant motion, but with no momentum, will never get off the ground.

It is true that motion in any direction is often better than no motion at all. But motion without momentum may be even less productive. For a more complete discussion of this phenomenon, see the book entitled “Fake Work: Why People Are Working Harder than Ever but Accomplishing Less”, by Brent Petersen and Gaylan Neilson.

So how do you fight this, and get real momentum going in your startup? Here are some key recommendations: Read more

Martin Zwilling , Founder and CEO, Startup Professionals
January 12th, 2014

A Valid Business Model Requires Real Customer Sales

Image via Pets.Answers.com

Image via Pets.Answers.com

“Will the dogs eat the dog food?” This rather crude expression weighs heavily on the mind of all good startup founders, no matter how confident they appear. We all know the products they give away, and the ones purchased by family and friends don’t count. The real milestone, proving the business model, is that first product sold for full price to a total stranger, leaving him happy.

So what can you do to expedite this event, or even improve the odds that it will happen at all? Of course, one sale isn’t really enough, so you need to get the first customer to recommend you to a second, and make sure the rate of sales ramps up quickly enough to keep the business alive and growing.

This whole process is particularly worrisome to many startup founders, since their expertise and background more likely technology than sales. If you are one of those, here are some basics principles you should follow and live by until that milestone is behind you Read more

Martin Zwilling , Founder and CEO, Startup Professionals
January 5th, 2014