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Over the past year, our most popular local NYC workshop has been How to Create and Use A Business Plan. No big surprise, since we’ve helped dozens of clients create winning business plans, and we literally wrote the book on the subject. Now, we’re taking it online, in the form of an intimate, interactive webinar. Here’s the scoop:
- Tuesday, Feb 15th, 8 pm EST
- Price: $49 (half the price of our local workshops)
- Instructor: David Ronick
- Only 20 tickets available
- Click here to sign up
A few lucky entrepreneurs can raise seed funding with a drawing on a napkin. The other 99% have to bootstrap until they can get a product to market and prove customers will buy it.
In this webinar, you’ll learn how to bootstrap, how to make your limited budget an advantage, and how to pick bootstrap-friendly startup ideas.
The format is a one-hour live webinar with video, led by UpStart bootcamp co-founder David Ronick.
- Date: Tuesday, February 8th
- Time: 8 PM EST
- Sign up here: http://upstartbootstrapwebinar.eventbrite.com/
p.s. We’ve capped attendance at 25 to make it more personal and interactive, so sign up now.
An elevator pitch is one your most powerful tools. It’s critical for explaining your business to people you want involved, like investors, co-founders, employees, or business partners. It’s also a great way to educate people who can spread the word about your company, like friends, family, and vendors. In all of these cases, people need to grasp the essence of what you’re doing quickly and easily – and feel that it’s viable and compelling. That’s a tall order given that you’ll only have about 15 seconds (It should probably be called a “revolving door pitch”). Here are some tips:
1) Create two versions. The short version usually includes the type of product or service you’ll offer, and your target customers. For UpStart, that might be “an online bootcamp for startups.” If you’ve got more time, you can add more details about the unique benefits you’ll provide for customers, and how you’ll make money. For UpStart, we’d add “we sell on-demand courses, coaching, and content that helps first time founders anywhere, across all industries, start up smarter.”
2) Anchor with something familiar. The key to describing your product or service is to start with something people already understand. Try using either a category (e.g. we’re an online store for x), or a well-known product comparison (e.g. we’re diapers.com for x).
I run into a lot of people with entrepreneurial dreams. When they tell me about their ideas, many use this punch line: “And nobody’s doing it!” Is that really true? Is it even a good thing? When you march into a meeting with an investor, think twice about declaring that you’ve got no competitors. Here’s why:
Perception is reality. You’re building a zebra with a unique pattern of stripes. But to potential customers and investors, your zebra looks a heck of a lot like other zebras. If you want their attention and their money, pay close attention to their perspective.
Better safe than sorry. Investors expect you to do your homework. Don’t let them down. Research and analyze the competitive landscape, so you can educate them during your pitch. Nothing undermines your credibility like having a potential investor school you on a competitor you didn’t know about.
If you are assessing the viability of your business idea, or writing a business plan, you’ll need to conduct research. Do most of that research by talking to customers and experts, not by surfing the web or reading third party reports.
You are biased, after all. You want your idea to be viable. So if you get to choose which facts to consider, you’ll pick the ones that support your story. Instead, engage in conversations. That way you can listen, probe, and pick up on critical nuances. You may also hear some bad news. But better to hear it now, than once you’ve committed your time, money and reputation to building a company around a false premise. Here are two examples:
Researching your market environment. Yes, you can cite third party studies on how big your market is, and how fast it’s growing. And yes, third party research reports can be useful. But don’t fork over $3,000 for the full report – find the answer in the free press release. And speak directly with industry insiders, so you get insights into how big picture trends relate to your specific opportunity.
One way to tell a rookie entrepreneur from a seasoned veteran is by the way they use NDAs or “non-disclosure agreements”. Note to rookies: Act like veterans.
Rookie:
Pulls out an NDA two minutes after you meet them – before they’ll even tell you their elevator pitch.
Insists that everyone sign NDAs, including potential investors and advisors. They quickly learn that most VCs won’t sign NDAs, and that sophisticated angels can get turned off by having an NDA pushed on them too early.
Thinks their idea is some sort of valuable, secret sauce.
I met with a client recently who spent the past few months unwinding a partnership–complete with legal costs, wasted time, and frustration.
Long story short, he took investment capital from a wealthy person I’ll call Richie Rich. Richie had lots of cash and time on his hands, and a desire to be involved in running a business. Unfortunately, Richie proved to be a terrible operator who botched several deals and nearly ran the company into legal trouble. If Richie had been an employee, my client would have fired him. But firing an investor is not that simple.
I know, I know, you need capital now to start–or preferably to grow–your business. But be very careful about mixing the roles of investors and employees. Before you bring someone onto your team, loaded or not, always ask yourself the following: Continue reading this post
So, you’ve got an idea for a better mousetrap. Awesome. And now you are trying to plan the business. Maybe to think through all the angles. Maybe to get advice so you can be sure you’re on the right track. Maybe to raise capital. Or maybe all of the above.
Regardless of your goals, don’t forget that “business plan” starts with the word “business” for a reason. A product is great. It’s important. But a product is not a business – and could very well be worthless on it’s own. Who will buy it? What exactly will they pay for, and how will you charge them? How many do you need to sell in order to cover your overhead? When do you expect that to happen? These are just a few of the issues to explore before you know if you’ve got a business, or just a product.
As a first-time founder these days, you’ll probably get started via bootstrapping, or raising / borrowing money from friends and family. Once you have a product developed, and proof that customers will buy / use it, you may seek “seed” funding from angels, or early-stage venture capital firms.
Many founders start pitching to seed investors toward the end of this process, after they’ve got some customer traction. However, I recommend speaking to seed investors earlier – six months or more before you plan to approach them for investments. Here’s why:
Intel. Seed-stage investors often focus on certain types of businesses. The best funds and angels know the secret sauce behind those kinds of companies, so they can provide advice about what works, what doesn’t, and key success factors. They may also know about analogs you can learn from, contacts you should meet, and competitors you should be aware of.
Over the past two weeks, two UpStart clients got term sheets from investors. Congrats!!!! These clients and others routinely wrestle with what type of investors to approach, and what exit strategies are most compelling. The right answer depends on factors including founder goals, the types of companies they are building, the degree to which they are capital efficient, etc. But there are some interesting big picture trends worth noting.
Hunting whales. Traditional venture capital firms tend to make big investments ($3 million+) in the hopes of making big exits ($100 million+). If you want to get these types of VCs on board, you need to convince them you’ve got the chance to generate that kind of significant scale. You need them to think you’ll become a whale.
