Unfortunately there’s nothing that can be generalized, because each case is different. Realistically, most angel deals are very early stage, which means that reliable metrics are pretty hard to come by. So most of the number crunching and ‘what if’ analyses tend to focus on customer adoption and revenues. Read more
Entrepreneurs need to listen to constructive criticism, but ignore negative vibes and complainers at all costs. If you are a complainer, and you are thinking of becoming an entrepreneur, think again. The world of an entrepreneur is tough, unpredictable, and fraught with risk. Most importantly, the buck stops with you, so there is no room for excuses and negativity.
Even listening often to negative team members and partners will reinforce negative thinking and behavior, and turn your normally positive perspective toxic. I’ve seen it too often in real life, and it was reinforced to me a while back in a book by Trevor Blake, “Three Simple Steps: A Map to Success in Business and Life.”
Trevor is a highly successful serial entrepreneur and success coach who has studied this phenomenon for many years, including the latest findings in neuroscience. Reviewing dozens of autobiographies of great entrepreneurs, including Steve Jobs, Henry Ford, and Andrew Carnegie, it seems that all had an unshakable belief in their ability to control their lives, with no excuses. Read more
Since no equity crowdfunding platforms under the JOBS Act will be able to even begin operations for another six to nine months, it is impossible for any of them to be “the market leader” at this point…even though every single one of them—as in a drawing room farce—is claiming the title.
And since the three logical big players (KickStarter, Gust and AngelList) have all indicated that they are unlikely to enter the fray, we need to exclude them as well.
That leaves us with five equity ‘crowdfunding’ companies that are actually up and operating: one playing close to the line, one using debt, one limited to Accredited investors, and two using the SPV strategy. They are: Read more
Unfortunately, the reality of entrepreneurship is that raising seed funding is much, much more difficult than you have been led to believe from the press reports about early stage financing. Only one out of every 400 companies seeking funding from venture capital firms actually receives it. And even when trying to raise much smaller amounts of money from individual ‘angel investors’, the odds are still worse than one in 40. Read more
Every investor expects to see some business traction, both before and after a funding event. If you have been working 20 hours a day, and spent your last dollar, but have no results to show, investors will be sympathetic, but will probably tell you that your dream doesn’t have wheels. Traction means forward progress.
I hear a lot of entrepreneurs contemplating their great “idea” for several years with little discernable progress, and looking for money to start. Talk and time are cheap, but they need to understand that investors judge past results as a good indicator of future expectations. Here are some tips which will signal traction and fundability to investors, as well as to your team: Read more
The first thing you should do is talk to a lawyer who is familiar with setting up startups, rather than trying to handle things yourself. This need not be expensive; at the very high end from a top tier firm, you’re probably talking no more than $5,000, for which you’d get absolutely everything a startup needs.
Typically, since only you and your co-founders are going to be owning the company at the beginning, you wouldn’t “set aside” shares for anyone else. That would usually happen only when either (a) you start hiring employees who will receive options instead of shares, or (b) you take your first equity investment (such as a typical Series Seed or Series A Convertible Preferred stock) from outside investors. Read more
Interestingly, for this past quarter, according to the Gust statistics we released thus week, the UK accounted for the largest number of entrepreneurs seeking funding of any country outside the US! The take away is that you’ve got a very vibrant and competitive startup economy, which is a Good Thing…unless you happen to be one of the vibrant competitors seeking funding!
*original post can be found on Quora @ http://www.quora.com/David-S-Rose/answers *