While anything is technically possible, the reality is that venture capital firms do not fund “ideas”. There are many wonderful ideas, and even many people having the same idea in the market at any given time. So what VCs fund is execution. Indeed, VCs only invest in one out of every 400 fully-formed companies that approach them for funding…let alone someone with a “startup idea”. Read more
You are an aspiring entrepreneur, eager to dump the corporate grind, and work to the beat of your own drummer, but you can’t come up with that killer idea to save the world. What are the alternatives that will give you the independence you crave, and challenge your business acumen?
Technically, I believe an entrepreneur is anyone who manages his own profit and loss, and doesn’t meet the government tax definition of an employee. Beyond the traditional new product or service model, you can always buy an existing business, purchase a franchise, join a multi-level marketing (MLM) company, or simply go out on your own as a consultant. Read more
The U.S. Securities and Exchange Commission has very strict rules about who can raise investment funds for privately held businesses, and how they are allowed to go about doing it. At the moment, this is primarily limited to raising money from very rich people who qualify as Accredited Investors, and with whom you already have a pre-existing relationship. Read more
Investors absolutely need to know the specific financial status of a company before they invest, because they are going to be part owners of the business. How much would you be willing pay someone to take over their bank account if you had no idea how much was in it?
So yes, it is absolutely standard practice for investors to require both existing financials that document the current state of the company into which they are investing, as well as projected financial statements giving them some idea of what you believe you will be able to make, and what you believe it will cost, if they invest. Read more
I don’t have an MBA. I used to fear that this would put me at a disadvantage in starting my own company, but now I’m convinced that it may be the other way around. In some reputable surveys, as many as two-thirds of entrepreneurs felt that their entrepreneurial spirit was more ingrained than learned, so a specific education level is at least irrelevant.
For business professionals who aspire to an executive position in a large company, most people agree that an MBA is always positive. It will get you a higher starting salary, and a valuable edge in your credentials at every promotion opportunity. In fact, BusinessWeek reports that roughly 40 percent of the S&P 500 chief executives have MBAs in any given year. Read more
The ideal angel investor would spend a great deal of his/her time working on behalf of the company in support of the CEO, in every way other than being a full-time employee.
In addition to doing the kinds of things that anyone (employee, friend, parent, founder, etc.) could do (referring customers, tweeting out news, suggesting ideas, checking out competitive sites, pointing out relevant news articles, providing moral support, etc.) the best angels are good for the same categories of contributions that not-for-profit institution look for when recruiting board members: the Three Ws of Wealth, Work and Wisdom. Read more
- Large and growing market
- Real domain expertise
- Provable product need
- Scalable business model
- Competitive advantage
- External validation (ideally traction and/or passionate customers)
- Viable business structure and cap table
- Reasonable valuation
- Proven team (tech/product/design/mark
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