Are balance sheets or profit and loss statements necessary to produce for early stage startups with no revenue?

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

Entrepreneurs Need Experience More Than An MBA

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

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

What are some things that truly committed angel investors do for startups?

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 WealthWork and Wisdom. Read more

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