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 | Smart Startup Guide Ebook | |
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E-book Title: Smart Startup Guide
Book Description: How I Learned to Stop Waiting for Investors and Start Building Companies
Are you starting to get frustrated by the
Venture Capital Catch 22TM?
What is the venture capital catch-22? Well, startups need venture capital to start, but venture capitalists and angel investors only fund companies which already have traction (i.e., sales). This is one big reason why no one is funding you.
The Solution
There is no one guaranteed solution to the funding problem which all entrepreneurs face. What is the solution, however, is having several dozen successful strategies for creating cash, or its equivalent, in order to be able to get your company out of the starting blocks.
This is precisely what The Guide offers you. Dozens and dozens of financing strategies and tactics used by fast growth startups to launch.
If we look at the companies which qualify for those annual lists of the fastest growing companies, we see that over 95% were unfunded at start-up beyond a nominal injection of the entrepreneur's own money (in most cases, less than $10k). Most didn't even have a business plan. Why did this minority of unfunded entrepreneurs succeed while most start-ups seeking capital die on the vine or morph into something completely different-that is, something more do-able after 6 months?
To answer this question, let me use an analogy. Think of entrepreneurs as being a bit like chefs. Some chefs are very rigid in their style requiring that a specific list of ingredients be delivered to them before they can begin cooking. This rigidity is fine so long as you are not too hungry and can wait for the required ingredients to arrive. However, if you are hungry now and lack the cash to buy more groceries, you will need to be flexible and work with what you have.
Other chefs, the more flexible and entrepreneurial ones, will not wait for someone else to deliver a bag of groceries to them, but will instead immediately begin to search the pantry, refrigerator, and vegetable garden for what's available. They then use the items at hand to create a feast.
* Realist: "I need to come up with at least 3 different ways to get this show off the ground."
* Dreamer: "It's preposterous to even suggest that this venture can be launched in any other way than the one outlined in my business plan. My plan shows the only way it can be down."
It's been said that true entrepreneurs are the artists of the business world. They create new businesses and products seemingly out of nothing. It's awe inspiring to watch a true entrepreneur formulate an idea and then begin making it happen within hours rather than sitting around for months writing business plans and pestering strangers for money.
In a nutshell, the successful cash-strapped entrepreneur designs a transitional business model for the launch, which can be described as "Heads I win; tails I lose very little." Once their concept has some degree of traction, they can then choose to talk to venture capitalists from a bargaining position of strength.
Once you have cashflow life becomes much simpler. Cashflow not only enables you to pay your bills but it places your company into the "stream of opportunities" that established businesses enjoy. Cashflow also earns you respect and gives you the ability to say, "No thanks!", to those notoriously outrageous offers made by venture capitalists and private investors.
Why Does It Work?
The Guide's Smart Start-up Model distills the lessons of America's most successful start-up companies for you to use in your venture. You can use the model as a screen to evaluate your current strategy for viability. If it doesn't pass the test, you can use the model to deconstruct it and formulate a stronger new strategy.
The Guide contains dozens of strategies and tactics used by successful entrepreneurs to both launch without outside capital and retain control of their companies. It shares "war stories" which illustrate how entrepreneurs think and react to circumstances which would force most others to give up and look for a job.
The Guide is the next best thing to sitting down in person with a group of Inc 500 Fastest Growing Companies founders and having them share their secrets with you.
Some people need to learn the hard way, while others don't have the time to do it this way and prefer to learn from the mistakes of others. I belong to the latter group. Why should I make the same rookie mistakes as others, when I could instead learn from those who did it the right way before me?
How did you get to be so smart about startups ?
It all comes down to three things: experience, experience, and more experience. I have personally launched six companies over the past 20 years. In addition, I have acted as an advisor or consultant to hundreds of other entrepreneurs over that time. Finally, although not an academic, I enjoy researching what makes startups successful and then teaching the lessons to others through the Guide or in live classes.
I started researching a "better way" to launch and grow a company over its first year after doing my very first venture capital deal in 1987. It was akin to being mugged in a dark alley. There truly had to be a better way. So I began paying attention to what other entrepreneurs were doing. Quickly I noticed something peculiar about entrepreneurs in start-up mode. They can be broken down into two distinct groups
* The vast majority consists of dreamers who take the naive approach to business in that they spend a few months at first writing a business plan. Once it's polished and ready for circulation, they begin to look for investors, and look, and look, and look, ad infinitum.
* The tiny minority announces its intentions to go after a given market opportunity, and is seemingly magically, in business a month later without raising a dime of outside money. Sometimes they choose to take VC funding later--on their own terms--and just as often they choose to avoid it completely.
This second group has always fascinated me. Just what was their magic start-up formula? Some of its members end up on the annual lists of America's fastest growing companies. Many turn into far more viable companies than their VC funded competitors according to Jim Collins of Built to Last fame.
The Value Proposition to You
Reading The Smart Startup Guide is akin to spending a week with the founders of successful fast growth companies. Imagine being able to pick their brains and learn how they formulated their strategies for fast start-up and growth.
Just think how much this knowledge would be worth to you. On average, it will help you to save 6 or more months of your life from being wasted going down dead ends in a futile pursuit of outside capital.
Would this knowledge be worth $500 to you? At the very least, if you are truly serious and not just a dreamer as most people are. It could even be worth $5000 to you. Or much more.
Some people need to make their own mistakes and learn the hard way. Others can't afford to waste time and money and prefer to learn as much as possible from others who succeeded before them.
The Guide is for this latter group.
Executive Decision Time
Think of the Smart Startup Guide as an entrepreneurial insurance policy which will ensure that you don't waste the next 6 to 12 months of your life. So ask yourself:
How much are the next six months of my life worth? Can I afford to waste them on what may turn out to be a dead end startup strategy?
In a Nutshell
To recap, the benefits of this manual for your business are:
* It will teach you to think like a savvy veteran entrepreneur who focusses on cashflow creation rather than on begging for money from strangers.
* It can drastically reduce the amount of capital needed to launch.
* It can help a company begin to generate cashflow before any funding occurs.
* In some cases, it can eliminate altogether the need for outside capital.
Discovering and using any of the lessons contained in the Guide will set you as much as a year ahead of other start-ups.
Cashflow = Respect from Investors
And if you are still committed to raising outside capital because you positively absolutely need a huge sum of capital to build that new state-of-the-art atomic-powered widget factory, you will still benefit from the Guide because:
* Cashflow--any cashflow--earns respect from investors, lenders, customers, suppliers, and even your Aunt Mabel. Cashflow attracts equity capital from investors.
* Cashflow will place you in a stronger bargaining position with potential investors since it will allow you to walk away from a bad deal. Pre-deal cashflow equals power. Power for you.
* Cashflow will give your company a higher valuation which in turn will allow you to hold onto more of your equity if a deal is done.
If you are truly committed to building your business then do everything you can today to achieve this goal.
If you're a realist you will try the Guide. Dreamers will continue to believe that other entrepreneurs don't have anything to teach them and that it's all about writing that "great" business plan which will miraculously convince people to throw money at an unknown.
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