Tag Archives: Venture capital

A Viable Path To Bootstrap A Startup

I have bootstrapped a number of startups in different industries. If you’ve been following this blog, you know that bootstrapping consists of using your own brain, wiliness, sweat equity and resources, rather than have a bank or investor fund you.  Which ….99 to 1…. they won’t anyway.  So it’s a good thing you’re looking at bootstrapping

And in the current economic climate more people are looking at bootstrapping…. or freelancing as an entry into bootstrapping… than perhaps ever before.

There are a number of tried and true formulas, which will help you bootstrap, and we’ve shared some of those before.  But the advice that follows stands out, in part, because the author,  Evan Carmichael, YoungEntrepreneur.com Blog Manager, takes some of it a step further.  We always tell you to outsource.  But Evan discusses how to stairstep your outsourcing from free labor to part time help, to hiring full time, which is exactly the smartest way to do it, I think.

Well, here’s Evan himself in YoungEntrepreneur.com Blog » 7 Steps To Build A Startup From Scratch With No Money.

“I recently did an interview about how to build a business up from scratch with little or no money and I used my own story as an example.

Here are the steps that I took.

This process helped me build my business with $0 in startup capital.

Hopefully you can learn from my experience and make it even better.

Step 1: Moonlight Until You Find Something That Works

I’m a big believer in not spending until I’m earning so I started my company while working at a venture capital firm in Toronto. I used my site to drive traffic, expose myself as an expert, and drive leads for the venture capital firm. I was driving thousands of people to my website and began to wonder if there was a way to monetize that traffic beyond lead generation for the venture capital company.

I found out about Google AdSense and put it up on the site as an additional revenue generator. In my first month (January 2005), I made $8.38 – not much to write home about.

Step 2:  Tweak, Tweak, Tweak

Too many entrepreneurs jump full in with no plan and no proof that your idea will work. It’s always better to tweak the concept while you already have some sort of stability in your income. I wasn’t about to go full time making $8.38 a month.

My next step was to learn as much as I could about how to better optimize my ads and how to drive more traffic to my site. I read every ebook, blog, newspaper article, and website that I could get my hands on. There were a lot fewer resources than there are today. I learned as much as I could in the extra time I had and implemented the ideas I learned. Slowly I started making more and more money.

Step 3: Go Full Time

I looked at how much I was spending on my apartment, food, entertainment, etc and once I started to hit that revenue number with my website, I jumped ship and did my business full time. It wasn’t a lavish lifestyle by any stretch but I wouldn’t have to worry about paying my monthly bills. I knew that if I was able to build a site in my spare time that could support my entire lifestyle, then if I gave it a full go, I would be able to do much much more!

Step 4: Get Free Help

As your typical entrepreneur I wanted to grow very quickly and took on too many responsibilities. I was doing manual data entry when I should have been doing more value-add work. But that manual work still needed to get done. The solution? Get free interns. I started with foreign language interns. They were basically university students who came to Canada on a student visa for work experience but they couldn’t get paid for the work. I couldn’t give them too many communications projects because English was their second language but I was able to unload a lot of the work off of my plate.

The next free help I got was from high school students who were on a co-op term. I was able to give them more tasks where they were able to connect with partners and customers because they were fluent in English. They sounded very young on the phone so they usually stuck with email.

Step 5: Hire Part Time Help

At some point you’re going to need more skilled labor than the free interns. They were a stepping stone to help you grow and take some of the work off of your plate but you’ll eventually get to the stage where you need people who don’t need as much hand-holding. But you don’t have enough money coming in to support both you and them. The solution? Hire part time workers. The first guy I hired was for one hour per day to update my database. He worked for me for five hours per week which was much more easy to manage. I wasn’t going broke and I got a skilled worker to help me grow my business. It wasn’t as fast as I would have liked, but it was growing nonetheless.

I hired people to create code for my website, write articles, do marketing projects, edit content, sell advertising… almost anything you can think of. But they were all part time to start. I had an entire organization running with people working only a couple of hours per day. The good thing was that they worked every day… so every day we made progress forward. I found people using elance as well as hired friends and family who wanted to help as well as make an extra pay check. At one point I had eight part time people working for me.

Step 6: Hire Full Time Help

Just like you eventually outgrow your interns, you will also eventually outgrow your part time help. At some point you’ll realize that it’s too much work to co-ordinate all the various part time staff and you need more from them. Some may be able to step into full time roles while others will not be able to commit to more hours because of the other jobs they have. You’ll likely end up having less workers but will get more work done. For example, when I hired my marketing manager, he was originally one of the guys working for me on a part time basis. By hiring him I ended up not needing four other people who were working with me in marketing related positions part time.

Step 7: Figure Out Your Job Description

This is where I’m at now. What is it that I love to do and who do I need to hire to take over the jobs that I don’t want to do anymore? In January I brought on two new full time people to free up more of my time. When you’re first starting a business you end up wearing all the hats but as you grow I believe the whole point of entrepreneurship is to do something you love doing. If you have the opportunity to design the perfect job, why not go for it?

I would love to hear your thoughts on how you’ve built your business up or how you plan to do it if you had a $0 budget.”

For more pearls of wisdom on entrepreneuring, from Evan and others like him, go to YoungEntrepreneur.com Blog

And if you have any thoughts yourself on bootstrapping or entrepreneuring, and you’d like to share them, we’d love to hear them

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Fish Where The Fish Are – Use LinkedIn To Job Search

I’ve already talked to you about LinkedIn being the number one resource where employers go to identify a great job candidate.  In the spirit of “fish where the fish are”, if you find yourself searching for a job, the first thing you need to do is to update your LinkedIn profile. Bait for the big fish.

Your LinkedIn Profile should be as fresh and up to date as fresh squeezed organge juice

And packed with Vitamin C.  Give it that oomph, that sparkle. Take a cue from Guy Kawasaki’s LinkedIn profile and make it personal, engaging, conversational.  In fact, Guy has admitted he had some help from an exec at LinkedIn writing one of his best known blogs on how to use Linked in (Guy explains he didn’t know how to use it that well at the time.)  If Guy needs a little help sometimes, perhaps you do too.  If you are not the world’s best writer, hire one to help you.  By that I mean hire a college student or put out an ad on Craig’s list or eLance to find a good writer.  There are a lot of writers out there and a lot more of them than usual are probably looking for some extra cash about this time, with the recession and Christmas double whammy. It wont’ require a lot of cash either.

Point them in the direction of Guy Kawasaki’s LinkedIn profile and tell them, ok, you haven’t been a venture capitalist-entrepreneur-mover and shaker with Apple -founder of tech companies like Guy but you do have a solid profile of professional accomplishments and you’d like to put the best face on it. You want to exude power, confidence, experience and expertise.  And you want to be engaging, not dry as a pile of dust, while doing it.  A good writer can achieve that for you.

Important Point

If you’re currently unemployed, The LinkedIn Blog »  Getting Back-to-Business Checklist for Job Hunters suggests listing your current position as “open to opportunities.” Good idea.

Now: Edit your LinkedIn Profile.

The LinkedIn Blog also suggests, “if you just recently lost your job, make sure you update your status field in your profile so your network know that you’re looking for a job. It’s a quick and easy way to let folks you’re connected to know that you could use their help. David Stevens, one of LinkedIn’s users, updated his status upon being laid off. Within seven business days someone in his network knew of an open position, which Dave landed shortly thereafter.

Network, Network, Network

You should also put out the word on Facebook and any other social networks you belong to.  Then get on the phone and tell all your friends:”Open to opportunities.”  Then go to all the professional networking events you can squeeze in.

Networking is crucial. I just heard from one of the leading business consultants in the country that one of his biggest mistakes, when starting out, was sending out all these printed brochures to strangers when he had just come from a major company with hundreds of close associates who knew and respected his work already.  When he started working the phones with them, he starting pulling in consulting engagements.

Like this old pro, most of the work you get will come, one way or another, from people you already know.  Start calling or emailing them.  Then point them to your LinkedIn profile.

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Tap Into The Most Powerful Business Network

Italian Ambassador meets the Italian business ...

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Let’s face it. Business is about money and the most powerful networks are the ones which are involved every time money changes hands all over the world.  The powerful, well-connected law firms, the large banks, the big four accounting firms,investment bankers on Wall Street and throughout the country…… these are the people at the white hot center of power. Many of the people in these networks can make or break your career or your business, with a nod, a wink or an introduction. These are the interconnected networks, often known as the old boys’ networks, who can introduce you to each other, sponsor you, mentor you, guide you and usher you in to meet the people who can write the biggest checks and who might take a liking to your deal, particularly if their friends like it. After all, just as people promote in their own image, people like to hob nob, do business, chat and knock back a few scotch and waters, light up a few Cohiba cigars after dinner with others like them.

Let’s say you have a very hot tech start up and you want to present it to a venture capitalist in Silicon Valley, but you don’t know any personally.  How do you meet one?  Basically, you can’t. Unless you know someone who knows one or works for one.  But your lawyer can.  You lawyer calls one of the ultra powerful law firms in Silicon Valley, whose clients include the biggest and hottest tech companies and a string of venture capitalists.  You lawyer gives you a good reference….basically assuring his colleague that  you are respectable, pay your bills and aren’t a con artist and that the deal you want to talk about is a real and viable one… then that lawyer arranges an introduction to a venture capitalist.  Voila! It’s done.

But how do you cozy up to a lawyer in the first place?  And not just any lawyer.  It has to be a civil ( as opposed to criminal) lawyer in an affluent, extremely well connected firm.  Rich people always have lawyers.  They need them for tax and estate planning.  If you are not yet in that category you may have to be on the look out to find the right entry lawyer.  I’ll explain what I mean by entry.

Lawyers are on the look out too, for clients.  Most of the big, affluent firms make a point of sending one of their lawyers to hang out with most of the important business organizations in town: the National Association of Women Business Owners (NAWBO), the Chamber of Commerce, several of the leading technology organizations.  This is their potential client pool.   Sometimes they send a young lawyer or someone who’s trying to develop a particular practice, say , technology.  But it doesn’t matter who it is or what their field is.  This is your entry lawyer. He or she gets you inside the gates of power. Once you have a relation with a lawyer in the firm, they can produce a lawyer with any kind of specialty you need.  What you will need is someone with contacts in your field who can guide you in the right direction, get you connected with the movers and shakers you need to know, and help you make any deals you may need to make in the future.  If they think you are a comer, someone likely to do big things in the future, you will not have to spend a lot of money with the firm.  They are banking on your future.  And in the meantime, they will probably invite you to firm parties, which you should attend because you definitely will meet some movers and shakers.

So, here’s the sequence. Most of us network a lot of the time, at conferences, seminars, trade industry shows, associations and dinners. We get someone’s business card and we give them ours  We now have a contact within a certain company, someone who can tell us,we hope, who’s on first, who has the power, who to talk to about what, and which way to the water cooler. Good.  But minimal.

Next, we work our contacts to find out which professional organizations relevant to our field have enough juice to attract some power players. And we set out to join one or two of those organizations.  Once in, we look around for the outposts of the Most Powerful Network: the top law firms, accountants or bankers. He or she will definitely be there. ( If they’re not, that tells you something about the organization.  They may be nice, but they might not be powerful.) Then we have to put in the work it takes to develop a relationship and demonstrate our professional abilities.  One way to do this is by volunteering to be on a committee with some power players.  Sometimes these people are on the committee in name only, because they have a recognizable name which impresses people.  You, however, need to be a worker bee, until you achieve that kind of stardom.  You need to nurture those relationships and always give your best.

Once you’ve impressed the powers that be with your skills, your path into the Most Powerful Network and the white hot center of power should be assured.

If you think you have a different or better path, write us and tell us.  We’d love to hear from you.

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Do It The Way Rome Did – Overwhelm The Competition

Book cover of

Book cover via Amazon

AdvancingWomen.com

Whether you are a home office worker, an entrepreneur, or a corporate CEO, your job as the leader of your business is to succeed. Success does not come from good ideas of even brilliant performance unless it is totally integrated with the mission or your company, which, in one way or another, must come down to the bottom line of making money.

Recognizing that inescapable fact, a leader’s job is both less complex, but more difficult than one might imagine.

At a tech conference I attended, Glyn Meek, President and CEO of Triactive, now President and CEO of Software On Sailboats explained his theory that the job of CEO, has only 2 components:

  • Never stop raising money.
  • Create a buzz about the company.

Someone Else Can Do Everything Else

True, although this is particularly applicable to high tech start ups where “two young geeks in a garage” create the original technology and, at some point, someone has to bring in venture capital and they definitely will want an adult, that is someone with major big company experience,to run the company.

From this skeletal beginning three other jobs of a boss/leader become clear.

Building An A Team

The CEO or leader must be a team builder. Having a marketing whiz or a tech guru or even a bona fide genius on hand is simply not enough in today’s increasingly complex, rapidly changing, intensely competitive business environment. To both keep pace and solve complex problems quickly you need a team and not just any team. Having an A team is absolutely mandatory. A CEO must be secure enough to hire A players, people who are as smart and talented and driven as he or she is, and more accomplished in their particular area of expertise.

A Players vs B Players

If you don’t hire A players but rather B players, you will not only not achieve the results you want, but your company’s performance will tend to deteriorate, or, at the least, require a lot more energy to sustain as time goes on. B players trigger certain dynamics, since they aren’t likely to hire A players and may not be secure enough to hire even B players. Your company’s performance may decrease as employees begin to consist of more and more C players. This is what Glyn Meek called the Meek Theory of Company Deterioration.

Install Systems to Insure Communication and Synchronization

Once you have your A team on board, then you must constantly communicate with them and put in place systems within your organization which allow your team to stay in constant contact with each other.

Ram Charan, advisor to CEOs of Fortune companies like GE, Ford, DuPont, EDS, Universal Studios and Verizon, believes that continuous and focused exchange of information leads to synchronization in a company which leads to success.

“A synchronized organization is like a champion rowing team-people working together with a certain rhythm that allows the group to do things the individual could not do. Synchronization expands the capacity of the whole group” Ram Charan points out in What the CEO Wants You to Know.

The reason why many small businesses never expand is because they don’t know how to create mechanisms for constant communication between individual employees and managers.

Whether it’s through regular conference calls, emails or personal meetings, it is the job of the CEO to see that there is continuous communication and feedback throughout the organization.

Where the Rubber Meets the Road-Creating a Sales Organization

Giving your organization a sales orientation, rather than a development orientation will make or break your company. No matter how superior your product or effective your service, there are no positive financial results, which business is all about, until you get a customer, and consequently generate revenue. ( Meek developed a very unique and fresh approach to solving this as-old-as-selling problem. Clearly the Internet has changed the face of sales prospecting. More information is available now than ever before. Raw business information is available from open-sources like LinkedIn, Spoke or Jigsaw. So his company integrated a browser within Desktop Sales Explorer to help you gather business details into your prospecting database. And Desktop Sales Explorer directs the integrated browser to help you find email addresses, home pages, contact information and more. Pretty slick, no?)

As Meek put it, “Rome didn’t build a great empire by holding meetings. They did it by killing all who opposed them.”

Metaphorically speaking, the only way to douse your competitor’s flame is to overwhelm them with so many successful sales by your organization that they become increasingly unable to compete.

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Bootstrapping A Green Business

The Future: Hot, Flat, Crowded…… And Full Of Opportunity For A Green Business

Thomas Friedman, one of my very favorite authors, who wrote the game changing The World is Flat has written a new book Hot, Flat, and Crowded, which takes a broad view of conditions around the globe and points us to the future.  In this instance, the sum of all Friedman says points us to the conclusion that, if we’re smart and capable, the best investment for someone starting out, and one with an unlimited upside and potential for growth, is a big investment in anything to do with clean technology and alternate energy technology.

BootStrapMe: Great bootstrap business ideas at BootStrapMe.com suggests, among 10 or so other practical ideas for bootstrapped businesses,  the potential of going green with a Green business.

“Environmentally friendly businesses may be the perfect bootstrapped startup because they have a natural niche from which to build a customer base.

Consider Brilliant Earth, a business built around conflict free diamonds and renewed gold. Read more.

In this interview with Leah Edwards at Ecopreneurist, Brilliant Earth co-founder Beth Gerstein explains how the company was founded with little capital investment.

Additional thoughts on bootstrapping environmentally responsible of other ethically responsible products:
• Focus on selling. Many products from free range non-factory farmed meats to fair trade products are already available somewhere in the world. Focus your efforts on connecting buyers with sellers as Brilliant Earth did rather than on capital-intense production.
• Educate don’t advertise. Customers for ethically or environmentally responsible products will seek out and even pay extra for what they value as long as they know where to look and new customers can be developed simply by educating them about that value.
• Cash first is key. Finding customers first instead of purchasing inventory was a major part of Gerstein and Grossberg’s business model and a major departure from the industry they were entering, but the approach replaced costly risk with hard work.
• Raise awareness. Peter Thum, founder of ethos waterlinks, which was bought by Starbucks in 2005, found that donating portions of his company’s proceeds to clean-water initiatives in impoverished communities worldwide was a natural selling point.
• Seek volunteers. Your higher ethical values may attract those passionate about your product, something Shelli Styles founder of Strappity-do-da, a company helping to raise women out of poverty in Columbia, found gave her a volunteer sales force in the early days.”

If any of this sounds like your cup of organic tea, then go for it! We wish you the best.  And don’t forget to write and tell us how you’re doing.

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How To Raise Capital For Your Company

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To continue with the second in a series on raising money:  This is more like a reference, a Swiss army knife of best ways to pitch your product or service, and its benefit to the consumer and its ultimate profitability for your investor. You may not want to browse through it in one sitting.  But you might well want to book mark it and come back to it for future reference.  It is chock full of useful and specific information for each step of your proposal like ..
“The Little Man Technique” (Art of the Start)Why should the investor care?

1. You say a feature.
2. Little Man asks “So what?”
3. You reply with the benefit
4. Elaborate with an example ( connect the dots)

So here goes…
For more see:
Or buy this book:

The Startup Company Bible for Entrepreneurs: The Complete Guide For Building Successful Companies and Raising Venture Capital.

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Is Your Business Fundable Or Is It Viable – There’s A Difference

Ok.  I’m going to offer a mini-series today on raising money for your business.  I’m not going to do it alone. I’m going to call on some experts to come into the room and help explain this.  I understand some of this may be a bit esoteric if you’re not out there trying to raise money from venture capitalists.  But I think it is extremely helpful anyway, because anyone who goes into business will need to raise money and keep raising it for a good while until you pass that magic threshold when the business is self sustaining.  So, here’s Guy Kawasaki ( and if you’re short on time, I suggest you at least watch the first video where Guy sums up 5 main points.)

How to Change the World: The Art of Raising Venture Capital – Guy Kawasaki

Guy says “These videos are my recent attempt to explain the art of raising venture capital. They are part of the Montgomery & Hansen online learning site and conference. For example, to learn about financing agreements and the term-sheet process, click here.

Click on these links for up-to-date information about venture capital, startups, and pitching.

For more go to:

The Cold, Hard Facts About Business Plans, Elevator Pitches And VC Presentations
Family, Fools and Friends, Seed Stage, Angels and VCs – Where the Money Comes From

Or buy Amazon.com: Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition: Guy Kawasaki: Books.

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