How do I get to the top of the search results in Gust?

The page rank algorithm for Gust is a deeply held secret so that people won’t game the system (they even won’t tell ME how it works! :-), but I do know that it is intended to surface both “investable” companies and companies that are willing make available to serious investors all the information they need to make at least a first-pass decision. Read more

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

One of my investors wants me to host a session where all the investors can meet and talk to each other. Is this a normal request?

There’s nothing inherently wrong with your investors meeting each other, and it’s actually usually a pretty good thing. That said, it’s a bit unusual coming from the F&F side rather than the professional investor side. So I’d just be a bit cautious in trying to understand why your friend is pushing for this. Could it be that s/he just want to hang out with the “high profile” types? If that’s the case, it’s not really the right reason. Read more

10 Startup Shortcuts That Will Be Back To Haunt You

Image via HealthyBodyLife.com

Image via HealthyBodyLife.com

I’ve been advising and mentoring startups and growth companies for years, and find myself always pushing them to try something new, for the sake of growth and survival. When you try new things, you make mistakes, and I’ve seen many. Smart companies learn from their own mistakes, but some don’t pay enough attention to other people’s mistakes.

In the spirit of saving you a few lifetimes of pain, here are some common mistakes or shortcuts that seem to happen routinely: Read more

Martin Zwilling , Founder and CEO, Startup Professionals
December 29th, 2013

As an American angel investor, what would it take for you to invest in a Brazilian startup?

I would be unlikely to invest in a Brazilian startup at this time because I have absolutely no background or knowledge of the local market, I don’t speak Portuguese, I would be unlikely to be able to attend board meetings or even visit the company, and finally because there are issues relative to double-taxation under US and local tax codes that make many international investments challenging. Read more

What is the maximum amount of money a pre-revenue mobile Internet startup can expect to raise from the VCs?

To start with, a pre-revenue mobile company cannot expect to raise anything from “the VCs”. Venture capital funds invest in only one out of every 400 companies seeking funding, so the odds of your particular startup getting funded are astronomically against you.

Next, venture capital funds invest primarily in later stage companies that have already shown significant indications of success (known in the industry as “traction”.)  Of the roughy $20 billion invested every year by US venture capital funds, only $300 million (1.5%) goes into startups.  For a true startup to be able to raise venture funding, you would need to be perceived as a better bet than virtually every company graduating from yCombinator, TechStars, DreamIT, etc. Conceivable, but unlikely. Read more