Bob Rice as BobRice3 on Twitter
People with money to invest have choices. How do you as an entrepreneur with a new idea get to be one of those choices? Initially, you may be able to rely on friends and family to put you on the top of their list, but eventually you will probably need real professional investors (Angels and VCs). You won’t win with them without understanding their alternatives, as well as their mindset.
I like the work just published by Bob Rice in “The Alternative Answer,” which does a great job of summarizing the investment universe, starting with the “conventional” stocks, bonds, and real estate, but moving on through more esoteric alternatives, including hedge funds, private equity, real assets, managed futures, and finally venture funding. Read more
Image via FirstSeniorFinancialGroup.com
A few angel investors have slipped or fallen from their lofty perch, so entrepreneurs must take great care to validate the character and reputation of every prospective investor. The entrepreneur’s tendency to be in a huge hurry to obtain the funding can end up being disastrous, and play into the hands of these less scrupulous investors.
Many entrepreneurs believe all money is created equal. As long as somebody recognizes their million dollar idea and writes them a check, the source really doesn’t matter. In fact, most angels are pure, but there are some exceptions that may cost you more than an investment: Read more
Image via blog.JohnSpence.com
Successful startups are all about turning ideas into action quickly and efficiently. These actions must be the hard part, since entrepreneurs always seem to come to me with ideas, and ask me for help on the actions. That has always seemed strange to me, since the magic is supposed to be in the ideas, and the actions are the same for every business.
In fact, the actions required to start and run a business are well documented, the subject of many books, and taught in college courses across the land. As confirmed to me by John Spence in his book on this subject, Awesomely Simple, turning business ideas into action consists of six essential strategies: Read more
US angel investors have been a robust source of seed stage capital for years. More recently, we have experienced significant growth in the number of funded seed stage deals, due to the emergence of accelerators, super angels and new seed stage funds. Unfortunately, we are now suffering a Series A startup funding crunch, that is, a lack of seed stage follow-on capital in the range of $1.5 to $7 million, funding which a decade or more ago was the sweet spot for venture capital.
Over half of angel rounds reported recently by groups who are members of the Angel Capital Association were syndication among multiple groups (from the Halo Report). Formal seed stage syndication activities are operating among US angel groups in the Northeast, the Pacific Northwest, the states of Ohio and Texas and elsewhere. These syndication efforts routinely fund round sizes up to $2 million, but few larger rounds. Can we devise a syndication model which would enable US angel groups to syndicate Series A rounds between $1.5 million and $5 million, or even higher? Read more
I’ve had the pleasure of judging several dozen real business pitches in the past six weeks. Some were pitches for angel investment at the Willamette Angel Conference, an angel group in Oregon. More to the point, others were for the University of Oregon New Venture Competition, the Rice University Business Plan Competition, and the University of Texas’ Venture Labs competition.
The three business plan competitions I participated in were all MBA-level contests organized by the entrepreneurship-related faculties at the three schools. They all invited startups from dozens of different schools, including several from other countries. Read more
Kentucky Derby (AP/Photo David Goldman)
In today’s business startup environment, if you don’t move fast, you get run over. Without a sense of urgency, people and businesses just can’t move fast enough. Speed is the driver because customers have a zero tolerance for waiting, and there are always competitors gaining on you.
John P. Kotter, in “A Sense of Urgency,” delves into the how-to required of entrepreneurs on that first step, avoiding pitfalls along the way. He is convinced that increasing the sense of urgency is the toughest of the steps necessary for effective change. Read more
This is about a deal my angel group turned down.
The software looks excellent. I wanted to use it immediately. There’s urgent and widespread market need. It’s obviously proprietary too. It’s a crowded noisy market, but it feels like this one has a real shot at it. Furthermore, the entrepreneur behind it is proven. The software grew out of the needs of a successful professional service business. There’s relatively low risk of failure.
So why did we turn it down? Read more