what we do
You are here:
You Ain't Ready Unless:
1. You have built your product or a prototype or a demo.
2. You have talked to customers and they like it, and they have provided you with references.
3. You have talked to manufacturers and it can be manufactured. (Skip this step if your product is software, or ASP, and so forth).
4. You know how you are going to make $ (buckets of money).
"Why do my start-ups and I go to all this trouble? The fast growth of investment money, the velocity of the Internet, it all points to speed. Why not just take the idea and hit the VC trail? There are several hundred in the Sand Hill Road area of Silicon Valley alone. Surely (after forty or so meetings) one investor will bite, plus theyíll straighten out your business model once they invest.
Well, Iím not going to say that the above scenario wouldnít work. It might, but not with the top-tier VCs I work with. Even landing an investor is a hit-or-miss proposition, and Iíd rather gamble with better odds. Itís also not the style of someone intent on building a great sustainable company. For that you have to do your homework. The next assignment, after building the team, is to focus on the product development process covered in chapter 2.
The start-ups that follow the approach I teach at Entrepreneur America get funded. Period. Thatís all the more remarkable because Iím not seeing the cream of the crop out here in Montana. Jim Clark and Steve Jobs donít need me because theyíve already got investors camped out on their sidewalks. Iím seeing the guys whoíve been getting only a stale bagel at the VC breakfasts. It doesnít mean they are losers, just that they have a lot more work to do before theyíre ready to go out and raise money.
Most Wanna-bes are just chasing their tails. This isnít the time for VC trolling, itís the time to chase customers instead and test out your ideas on them. You canít raise money until you understand your business model and do your homework.
-- Smartups - book by Rob Ryan - Chapter 1, p.g 30-31.
What entrepreneur types do I invest and mentor?
"The philosophies and approaches the founders take toward building companies tend to place their companies in one of seven categories.
2. Wonderful Wacky MBA
3. Send Money
5. One-Stripe Zebra
7. Guts and Brains (the Dream Team)
All these categories, except Guts and Brains, have one thing in common. They have not done their homework on their business model. They are not ready to raise money. My main mission with these entrepreneurs is to slow them down, strengthen the team, and get them to start asking and answering fundamental questions about their business.
-- Smartups - book by Rob Ryan - Chapter 1, p.g 16.
If you can honestly say "yes" to these questions, then you are someone I want to talk to:
- Does your management team have a couple of strong engineers and one experienced marketing person?
- Does the team have years of experience in the chosen field?
- Are you developing a business hypothesis, then testing it on potential customers?
- Has the team built a prototype or demo to show to customers?
What entrepreneur types I donít mentor or invest?
Here are some of the symptoms of "Wanna Be" disease:
- Did you form a hastily assembled, lopsided team, with lots of ďBĒ players? Was your attitude that itís more important to get bodies on the team than to make sure they are the right ones for the job?
- Are you drawn to the business model of the week (for example, consumer.com)?
- Does everyone have significant titles, like CEO, COO, and president?
- Do you find yourself reading analyst reports and getting excited about major market opportunities and trends?
- Did you destroy a forest to create your business plan?
- Do you find yourself asking strangers for money?
- Are you avoiding bootstrapping?
- Are you irritated with the VCs youíre talking to?
- Is your product more like a single function?
If you answered some of the above questions "yes", then you are not what I am interested in.
You think you're a good match, how do you proceed?
I am loath to read Business plans because they are in general horrible. There are two good ways to present the Business material. The first is thru a good presentation (see Tips, war stories and tutorials). The second is thru a good executive summary which is 1-2 pages. If you followed the presentation and answered the questions posed in my tutorial then writing the 1-2 pager should be a breeze. Once you have a good presentation or executive summary, please fill out an Online Application, or if you prefer not having to fill out an application you can just send us your executive summary.
After you send your online application, what can you expect? I try to read the submissions in a timely manner. If I am interested I will ask Tim to set up a Skype meeting. If you don't hear from me or Tim that is probably due to the fact that I am not interested. If you are uncertain of your status, contact us. Please don't bug us it will not help and may hinder.