Competition
Why is it important to outperform the competition?
- Best way to attract capital
- Will help you get noticed and draw attention, minimizing the work and investment involved in chasing money
What is the biggest pitfall facing startups in regards to acquiring funding?
Assuming you will get a lot of money from investors.
Give me one example of a company that drove their sales through social media outlets.
- Answers vary
(Hoaka Swimwear, Sugar bear Hair, Farsali)
What do prospective investors want and expect in a venture?
o A well-thought-out and researched business idea and plan
o Organization
o Integrity and character
o Answers to obvious questions
o That you know what you don’t know and don’t have, but you have a plan to get it
o Market potential
o Plans for repayment if seeking a loan
o Plans for additional rounds of funding and/or exits
o That you have put your heart into the project
o That you have and will keep skin in the game
o Feedback from others
o Proof of demand
o That they can get along with you
o That you are coachable
o Consideration of the safety of their capital and time
o A good match
o Passion for your product or service
o Passion for connecting with and working with them
o An opportunity that will take them closer to their goals
List 3 notable milestones in the 18-24 month plan.
- Idea conceptualization
- Market research
- Business plan creation
- Testing the waters
- Finding your cofounders
- Making key hires
- Building a board
- Prototypes and beta testing
- Launching of minimum viable product
- Expanding early adopters and users
- Gaining revenues
- Proof of demand and potential for scale
- Break even point
Name one example of a way in which you can give yourself a leg-up on your competition?
- Prioritize and focus attention on exactly that
- Get help
- Get up earlier
- Compete in competitions
- Participate in development or coding marathons
- Attend conferences
- Go to networking sessions
- Join invitation-only communities of like-minded people
Why is it beneficial to break even before negotiating for funding?
Startup founders can negotiate from a place of power once breakeven point is reached. Money can be funneled into real growth and maximized.
Why is it important for a brand to tell a story?
Clearly establishes what your brand is all about – its purpose, core values, and mission
Offers the consumer more than just a product or service, but rather an experience that transcends mundane reality
Motivates the reader or viewer to step into that experience. This is done by crafting content in such a way that your audience feels as though they’d risk losing access to this somehow sublime experience of being a part of your brand if they don’t buy, follow, or sign up right now.
True or false. The best entrepreneurs do not need to ask for help from others.
False. The wisest entrepreneurs are those who are smart enough to know what they don’t know and when to leverage an expert
What is one reason you build your product before contacting investors?
- Entrepreneurs establish ownership, control and lead this way
- Opportunity to build a business model that works
- Better position for negotiation
- Have product on market with some historical data
- Helps avoid significant dilution of company when raising money WHILE attempting to assemble the machine
- Allows for pivoting (No business plan is bulletproof, good to have proof of concept and validation before bringing outsiders into mix)
- Helps answer WHY are you raising capital and identify what the benefits are for you and for potential investors?
True or false. Breaking even is a prerequisite to raising capital.
False. Breaking even is NOT a prerequisite to raising capital. The REAL value of a company is the future value of cash flow.
o If you aren’t breaking even today, when will you be?
o How much cash flow can investors buy into?
o What discount are they getting by buying into that cash flow now?
Give an example of someone you can seek help from as an entrepreneur.
o Family and friends that are experienced professionals
o Trusted existing mentors
o Members of your own “mastermind group”
o Professionals and business offering workshops and free advice sessions
o Volunteers and interns
o Cofounders
o Freelancers
o Existing investors
o Advisors
o Former colleagues
o CoFoundersLab network of advisors and cofounders
Name one reason why it is beneficial to raise capital.
- more money can amplify success
- leveraging power contacts and influencers
- speeding up results
- capital can be critical for staying afloat
- funds to use to improve product/service
-branding and visibility benefits
- you can grow a lot bigger, a lot faster
True or false. Rejection is a sign that your venture is a flop.
False. Rejection WILL happen, learn from it, build up immunity to it. "Nine no's lead to a yes". You only need one yes!
Name one downside of raising capital.
- fundraising can be costly and time consuming
- giving up control
- the burden of owing others
- too much money destroys founders, relationships
- pressure to water down or detour from plans
- can become distracted by additional demands
- you'll be pocketing less of the profits
True of False. Cash is an important factor for the survival of your company.
True. Nothing will kill your venture and dream faster than running out of cash, when you are out of cash you can’t market, promote, or get sales.
- Having everything lined up to raise capital or having substantial lines of credit turned on can be crucial to survival for your company
- Stay liquid and raise capital 24/7
- Open your round at least 6 months before running out of funds