best tips on raising venture capital any aspiring entrepreneur
would be wise to listen to:
You Have to Decide: High Impact or Small Business Entrepreneur?
you call yourself an entrepreneur. But hold the phone
because unless you have a pretty clear idea going in
what your aspirations are; you could find yourself flailing
around like a ship without a rudder.
Jones explains it; You have to know going in what you
really want; because you cant have it both ways. If
you go into high impact venture-backed entrepreneurship; youre
trying to build a business thats going to scale and
make people wealthy. And youre not going to be your
own boss for long. Whereas a small business entrepreneur wants
salary security and to be their own boss. So you really need
to ask yourself which world youre trying to be in. Are
you trying to be a business owner whos well respected
in the community; has a nice income and runs his own shop
or are you trying to create the next Microsoft or Twitter?
You have to choose because these are two very different rides.
You May Have to Move
you pick the high impact entrepreneur road? Awesome. But brace
yourself because unless you already live in Silicon
Valley; you may have to move.
puts it frankly; No one ever said life is fair and Ive
written and told people that if raising money at the best
valuation fast is your sole objective in life you probably
need to move to Silicon Valley.
Get On The Team Even if You Sit the Bench For Awhile
been an entrepreneur before and have zero experience? Have
no fear. You can still get in the high impact entrepreneur
Jones explains; Put yourself in an environment where
you can get exposure to good deals and successful entrepreneurs.
Theres an incredible training ground out there. Go to
conferences with pitches by entrepreneurs. Find a place to
work where the company works with high impact entrepreneurs.
You have to be willing to go and do it and realize youre
not going to get a big paycheck but at least youre
in the game.
Focus on Your Own Team
that youre on the path to superstardom; are you interested
in the most important thing for you to work on? According
to Jones its your team.
follows people. The majority of VCs Ive worked with
over the years would say the most important thing is the team.
Also, in my experience, the proximate cause of most startup
failures is because the team is not up to the next task. Its
usually at those various pivot points where a team proves
dysfunctional under stress and implodes because of it. So
your team is of paramount importance.
Get a Mentor But Choose Wisely
of the smartest players you can find for your team as an entrepreneur
is a mentor, coach or counselor.
told me this; Get counsel and be very careful about
who it is. Not to confuse the fact that someone who can run
a billion dollar corporation does not necessarily mean theyre
a good adviser for your startup. So really find people who
have experience and wisdom in the trenches of the kind of
thing youre trying to do. The CEO of some Fortune 500
company is not a great person to be an adviser. They might
be a great person to leverage for money but theyre
probably not going to have a lot to tell you about the realities
of building your high tech business on a shoestring.
Treat It Like A Game
many entrepreneurs arent having any fun with their businesses.
I see it all the time. But Jones has some good wisdom for
used to say when I was an entrepreneur that what Im
doing is a game. I want to win and I play really hard. You
follow the rules but at the end of the day, going to work
is like going to play golf. Pure fun. And as I say, if you
want to be the best golfer in the world, one thing you can
say about Tiger Woods is he hits an incredible number of practice
shots. If you want to be the best pianist in the world, youre
going to practice a lot.
Failure is Acceptable
youre going to hit grand slams every time at bat? Think
to Jones; One of the great things about being an entrepreneur
and I used to say this about even being a venture investor
too: Youre supposed to strike out a bunch. You have
to be one of those people who realize that if youre
going to hit 714 home runs, youre probably going to
strike out over 1,300 times like Babe Ruth did.
Learn the Lingo and Know Whats Going On
have the team put together and are ready to play the game
but you dont know the rules. Not good. According
to Jones, not understanding the terminology and whats
going on in the world of venture capital is a real deal killer.
some time with the lingo and figure out whats going
on. How do venture deals work? What is the real valuation?
I mean most of the entrepreneurs I run into these days, they
just dont know what the valuations are in the market
and when they do, they will compare themselves to an entrepreneur
in Silicon Valley. But by the way that person has made
a half billion dollars for themselves and his investors. What
have you done? So I think a lot of it is just learn the lingo.
Know what convertible preferred stock is. Know that you dont
go to a venture investor and give him some high valuation
number. Youre a startup with no prior experience in
the venture world. Thats just a reality.
obvious thing you want to do is contact as many investors
as you possibly can. You should try to identify investors
carefully but also be sure and send your idea to every investor
you can possibly find as you never know which is willing to
invest in your project. You should find a system that will
distribute your proposal for you to save you time and energy.
Have Situational Awareness
off your need to know the lingo and avoid cold calling investors
is this one: Know your space.
Jones explains; Its not good enough to have the
best web commerce company in your backyard. You have to go
out and really figure out whos in your space or near
your space everywhere. Not just insular in your own little
environment. I see so many entrepreneurs who just arent
aware of whats going on in other parts of the world
even though its easy to find out these days with technology
and the Internet.
The Right Investor Should Add More Value Than Just Greenbacks
someone to write you and your team a check is the easy part
if you have a great idea and proven business model. But whats
even more key is getting the right person to write the check.
told me; Its much more significant for a startup
entrepreneur to work with super angels and accelerator type
things where you get a little bit of money and get some real
valuable help. It sets you up for sophisticated investments.
There are a lot of good venture capitalists out there and
they really do add more than money to the equation. If youre
an entrepreneur who hasnt done it before; I think the
discipline is having an outsider who knows something about
the business and investment climate. Its a good thing.
Stop Crying in Your Milk When Things Dont Go Right
you will fail but thats okay. The problem lies
not in the failing its what you do when failure
crashes through your door. As Jones explains;
I look at a bunch of little companies to invest in and 12
months ago they were all in the same place. But one is doing
things. Theyre not waiting for the phone to ring. Theyre
changing the pitch a little. Theyre finding a way to
get some sort of deal done; finding a way to go visit people
in different markets and get more information. The ones that
ultimately succeed are the ones where if six months go by
and they have no funding; they change the deal. It looks different.
Better. These people are on the move and thats really
critical. Successful entrepreneurs tend to be very driven
and lets face it; if you want to be a really successful
entrepreneur, its a 24 by 7 job. Youve got to
demonstrate passion and energy and the ability to think on
the fly and to make things happen with either trivial or no