Does a startup need a CEO from the start?

You certainly don’t need a full executive suite if it is only a few co-founders. However, in my experience every organization needs one person on whose desk the buck stops. You can call this the President, or General Manager, or Executive Director, or Chairman, or Man in the Moon…but it has to be one person who is at the very least the tie-breaker, and ultimately will make the hard calls. It is this person on whom future investors will be betting, and this person who will bear the brunt of the sleepless nights.

*original post can be found on Quora @ *

Entrepreneurs Need To Keep Their Business Focused

Zappos logo via Flickr by Ben Spark

Zappos logo via Flickr by Ben Spark

One of the most common failures I see in startups is lack of focus. Unfocused entrepreneurs boast that their new technology will generate multiple disruptive products for consumers as well as enterprises around the world. Investors hear this as trying to do too many things with limited resources, meaning the startup will not shine at anything, and will not survive the competition.

For example, a while back I received a startup executive summary, requesting Angel investor funding, that touted technology for a line of new medical devices, also to be offered in a new military radar device. Even a company with unlimited money and people shouldn’t try to step into those two domains for the first time at the same time. Read more

Martin Zwilling , Founder and CEO, Startup Professionals
August 17th, 2014

5 Clues To Investor-Friendly Financial Estimates

Image via

Image via

Most entrepreneurs struggle with financial projections, not wanting to commit to numbers they can’t deliver, and having no clue what investors might consider reasonable. However, making no projections, or non-credible projections will get your startup marked as unfundable. I recommend a simple set of guidelines, which work for at least 80% of the business domains I see.

Equally important, you need to make these projections first as goals for your own use, to convince the team as well as investors that you have a business which is achievable. Projecting the financials should be the last step of your business plan preparation, since it assumes you already know the opportunity size, customer buying habits, pricing, costs, and competition. Read more

Martin Zwilling , Founder and CEO, Startup Professionals
August 10th, 2014

What’s actually required to start or close a funding round?

Technically, a “funding round” simply means a company accepting one or more investments from one or more investors on similar terms within a certain period of time. As such, this could cover many different things, such as:

  • Your parents loaning you money to cover your expenses while you code your product
  • 25 individual angel investors funding a startup on a convertible note
  • two angel groups investing money in Series Seed Preferred stock purchase
  • a single venture capital fund putting in the full amount as Series A Convertible Preferred investment

In all cases, the one fundamental requirement is that the company and the investor agree on how much is being invested, and on what terms. These items are included in what is known as a term sheet. What the terms end up being, and how a company and the investor(s) arrive at that term sheet, can differ widely. Read more

Inventor Entrepreneurs May Be The Rare Exception


Thomas Edison image via Wikipedia

In my experience, inventors and technologists aren’t interested or aren’t very good at building a business, and entrepreneurs aren’t usually good scientists. These people need to find each other, and can jointly make a great team for a new startup. Without the synergy, companies like Apple might never have gotten off the ground.

Historically, it’s also not often that a good inventor was also a good entrepreneur. There are some old arguments that even our entrepreneur heroes, like Thomas Edison, really cheated on the invention side. Most of the great entrepreneurs of recent times, like the young Steve Jobs, had a great technologist, Steve Wozniak, who could implement his dreams. Read more