Jeff Bezos and Amazon's Success Secret


 

Last month, author Brad Stone released an interesting book called, "The Everything Store: Jeff Bezos and the Age of Amazon."

The book chronicles the story behind Jeff Bezos and Amazon, but there's really only one paragraph from it that I'd like to focus on herein. That paragraph reads as follows:

    "They [Amazon] would let other more experienced retailers sell everything on the site via Amazon's Marketplace, and Amazon would take a commission. Meanwhile the company [Amazon] could watch and learn. That was something we did quite well, says Randy Miller. If you don't know anything about the business, launch it through the Marketplace, bring retailers in, watch what they do and what they sell, understand it, and then get into it."


So, let me break this down for you if it's not apparent. Rather than selling items like apparel and kitchen items itself, Amazon launched these categories through the Amazon Marketplace where other vendors sold them.

In doing so, Amazon was able to see what products sold well and how they were sold. And then, when a product sold well, what did Amazon do? Well, they started selling the item themselves in the main Amazon.com site.

So, what is this strategy called?

Market Research. That's right, Amazon.com went from an online bookseller to the WalMart of the internet by doing market research. Because with the right market research you can avoid the missteps that most companies and entrepreneurs make.

So, what kind of market research will help you grow your company? Below are the key research areas you need:

Industry Research


In assessing your industry or market, start by defining how big it is. Why? Because if it's too small, it's probably not worth entering. Define your market as clearly as possible. For example, if you manufacture prosthetics, look at the size of that market, not the entire healthcare market.

Next look at market trends. For example if the market is shrinking or consolidating, it's probably not a great market to enter; unless you have a revolutionary new product that could shake things up.

Customer Research

Understanding your target customers is absolutely critical to your business' success. In fact, one of Jeff Bezos' hallmark strategies is "We start with the customer and work backward."

In your research, you need to precisely identify and define who your customer is. Define their demographics such as what gender they are, how old they are, where they live, etc. If a business customer, also define their role in their company and the type of company for which they work.

Then move to the psychographic questions. What do your customers like to do in their free time? Who do the like on Facebook? Etc.

The more you know your customers and what make them tick, the better job you will do in creating the products and services they want, and effectively marketing to them.

Competitive Research


Identify who you are top competitors are. Importantly, like Amazon did, determine what has worked well for them and what their customers are buying.

The old investor saying is very important here, which is as follows: "if you have no competitors; maybe you have no market." What this means is that if customers aren't currently buying a product or service that serves the need your company fulfills, then maybe that need and thus market doesn't exist.

The more you understand your competition, the better you will do in creating a winning strategy. Fortunately, with online tools, you can learn a lot about your competition. You can find out the demographics of their website visitors, what other sites those visitors frequent, what other companies they like on Facebook, and so on. Clearly this information will help improve your marketing and overall strategy.

Financial Research


The final category or research to conduct is financial research. Here the goal is to develop benchmarks. For example, what is the average Cost of Goods Sold in your industry? What percentage of your revenues should staffing costs comprise?

By understanding these benchmarks, you can do a better job in determining financing needs and also measuring and improving your performance over time.

We all know that knowledge is power. And when running a business, the knowledge you need is market research. With it you'll have a better strategy and your likelihood of success skyrockets. Without it, you're shooting in the dark. I prefer the former.

 

Suggested Resource: If your business plan and/or strategy is missing critical market research, you will fail. Or worse yet, if your plan or strategy is based on faulty research, you're doomed. Click here to learn how my team can quickly and affordably conduct your market research for you.

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Exploring Big Data and Executive Dashboards [Webinar Invitation]


 

In my posts over the past few weeks, I have talked about the power of business intelligence dashboards, and why companies that use them enjoy triple the revenue growth and double the profit growth of companies that don’t.

This is driven by the simple two facts that a) businesses today collect more data than ever before and b) wading through and making sense of it all is overwhelming as this data is collected and stored in multiple locations, including in CRM and ERP systems, in accounting software, in advertising and marketing platforms, in social media sites, and so on.

So it is the executives who quickly access this data - and connect the dots between it all - that incrementally but inexorably make better strategic and tactical decisions, gain competitive advantage, and win.

Webinar Invitation

Intrigued, but not sure exactly how an executive dashboard would work for your business?
 
If so, you’ve come to the right place, because my team and I have created a special webinar where I share best practices as to how today’s best run companies use executive dashboards to:

•    Identify the most important business metrics to track
•    Develop real-time visibility into their organizations
•    Improve employee performance
•    Make more intelligent business decisions
•    And ultimately grow sales and profits

Importantly, this webinar will neither be an academic lecture nor a sales pitch in disguise.  Rather, it will be an intense hands-on workshop where I will share key tips and tactics as to how to harness the power of executive dashboards in your business right away to grow revenues and make more money - while working less and having more fun.

Sign Up Now

Note that to promote interaction, we are limiting this program to no more than 35 attendees. So click below to register before the spots fill up!

https://www2.gotomeeting.com/register/452495706

Look forward to your attendance!

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Building Your Dream Team


 

No great companies have just one employee. None. Which means that in order to grow your company, you need to build a great team.

In building your team, there are two equally important but distinct parts: recruiting great employees and expertly managing them so they perform at their best.

1. Recruiting Great Employees

Recruiting great employees requires you to: 1) determine who to hire, and 2) hire the right people.

Determining Who to Hire

In determining who to hire, you need to assess both what job functions you need now, and what functions you'll need in the future. This will help you find the right people.

Consider this example: you need someone right now to manage your marketing. So you hire a marketing manager. A year from now, your company is doing well and you hire four more people as part of your marketing team.

Now here's the question that arises: is the person you initially hired for the marketing position the right person to lead your marketing team? Sometimes they are, but often they aren't. Since performing in a role yourself is a very different job than managing a team.

So, the question you need to ask yourself when you initially hire the marketing person is this: should I hire someone simply to meet my short-term marketing goals, or should I hire someone that can fill my short-term goals and who could also manage and grow my marketing department. The latter hire will typically be more qualified, and more expensive, so making such a decision is important.

Another tip when determining who to hire is to conduct a return on investment (ROI) analysis on new positions. That is, what expected return, typically in terms of increased profits, will the business generate in return for hiring each new staff member. The less funding you have in your business, the more important this analysis becomes in choosing who to hire now.

Hiring the Right People

There is an old and important saying in management, "Hire slowly and fire quickly." You hire slowly since it's critical to get the right people in your organization. And you fire quickly, since bad employees can ruin the morale and productivity of your entire team.

The process of hiring the right employees starts with sourcing them. You can source or find employees from a wide range of places, from college job boards to posting classified ads. For each open position, think about the best places to find qualified prospects.

Once you find qualified prospects, the key is to weed through them to find the top performers. While interviewing prospective employees is key, remember that someone's interviewing skills are not as important as their on-the-job performance. That is, someone can be great during interviews, but not so great on the job.

To overcome this challenge, delve into the prospect's performance in their last jobs and, as much as possible, give them tests to see how they might perform in your company. With regards to tests you give them, treat their performance on them as their best possible work. While they can refine their skills with training, prospective employees generally give it their all on such a test. So, if they score mediocre, they are not a good prospect.


2. Expertly Managing Your Team

Your job as a manager doesn't stop once you've recruited a great team. Rather, you need to expertly manage them. We see this in sports all the time; one team has incredibly talented players, but they still don't win the championship.

Key to your company's performance is motivating and managing your employees so they work collectively as a team and are highly productive.

Among the many techniques for accomplishing this, here are two of my favorites:

1. Let Your Employees Set Goals for Themselves

Employees will perform much better when they've set their own goals, rather than goals being dictated for them. So, have each employee set goals. Then review those goals with them. As needed, persuade them to modify their goals to better align with company goals. Even when you do this, they will feel personally accountable for achieving their goals.

2. Conduct Performance Reviews

If you don't meet with employees and review their performance, they won't know whether they're doing a good job or not. So, meet with your employees periodically to discuss their performance versus their goals, detail what they are doing well at, and identifying areas for improvement and your suggestions to achieve such improvement.

Your Team Allows You to Win the Game

We all face competition in our businesses. And the difference between the winners and losers is often the quality of the teams.  Clearly, if your marketing manager is better than your competitors', and so is your sales team, your production team, etc., you're going to win every time. So, focus on building your dream team so you emerge victorious.

 

Suggested Resource: Building Your Dream Team is a comprehensive video program that takes you through the four phases of building an outstanding team, which are: 1. Building a Founding Team, 2. Determining Who to Hire, 3. Hiring Superstars, and 4. Expertly Managing Your Team. Click here to learn more.

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Why NOT Manage by Data?


 

Last week, I wrote about the power of business intelligence dashboards.

How, for the first time, smaller businesses can harness the power of big data to more efficiently and profitably manage their companies.

Some readers expressed skepticism that this "stuff" actually works.  

That it is just more "noise” that causes entrepreneurs to get “lost in the weeds” versus long-term thinking and planning.

There is some truth to this.

Heck, “Big Data” at its worst is probably best personified by Wall Street “quant jocks” who equate positive expected value "bets" with larger, more foundational truths of right and wrong, and of good and bad.

To these concerns, let me offer a few suggestions as to how to best utilize business data to support, but not drive, leadership and managerial decision-making.

The first point is that for the vast majority of small businesses “getting lost” in the data is the least of their concerns.
 
A far bigger one is simply analyzing anything more than the barest minimum of balance sheet - "i.e. How much money is in the bank?" and profit and loss statement - i.e. “What were our sales last month?” data.

And when broader data, like the number of incoming leads, sales proposals, average call hold time, marketing spend per action, e-mail open and click-through rates, is analyzed…

…so much of it is either incomplete or just flat-out incorrect to make doing so an exercise in futility.

AND the data that is complete and accurate sits in so many places, Excel worksheets on the sales manager's computer, deep in a little understood (and used) CRM, in the reporting functionality of software as services like Grasshopper, IfByPhone, Constant Contact and Google Analytics to name just a few…

…that a way too high percentage of the time and energy set aside to analyze it is outright wasted in simply accessing the reports from the data sources that house it!

The simple answer to these challenges is to utilize a best-of-breed business intelligence dashboard that:

•    Automatically collects and updates all the data in one easy to access place;
•    Has alerts built-in to flag incomplete or way-out-out-the ordinary data; and,
•    Is arranged and presented in a visual and formatted way that works for the executive reviewing it.

But it goes deeper than this.
 
You see, leading and managing a business based on proper data collection and analysis is no longer a choice - it is a necessity. 

Because all of our best competitors are doing it.

And doing so along with proper and appropriate strategic repositioning as the consistent and correct interpretation of the data allows, affords, and demands.

Or, as David Byrne of the Talking heads once so famously said “This ain't no party…this ain't no disco…this ain't no fooling around. “

You see, when it comes to data-driven decision-making, it has become a matter of going big or staying home.

As in admitting that one is really not that serious about growing and sustaining a business of lasting value - one agile enough to adapt and evolve in the face of technological and marketplace change, and of competitive threat.

Now, I don't believe this.

No, the best entrepreneurs I know are as serious as they can be about not just surviving but thriving in this massively opportunity-filled world of ours.

Just take it one step, one click, one API integration at a time.

Sooner than you think, your business will be running more responsively, more nimbly than ever.

Then watch the profits follow.

To Your Success,

P.S. Like to demo our dashboard offering? Then Click Here to learn more.

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Focus On Value Drivers To Get To A Big Payday


 

The acquisition market continues to be very strong. In the 12 months ending August 31, 2013, $881.7 Billion was paid to acquire 9,499 US companies. This represents an 8.1% increase over the $815.9 Billion paid to acquire companies in the previous year.

Importantly, during this time, the average EBITDA multiple paid for Middle Market firms (companies valued between $1 million and $500 million) was 9.1. This means that if your company's EBITDA (earnings before interest, taxes, depreciation and amortization) were $2 million, that your company would sell for 9.1 times that or $18.2 million.

I'm telling you this important information because selling your company is the ultimate goal for most entrepreneurs, because it's how you achieve significant wealth.

Importantly, not all of the $881.7 Billion paid to buy these companies went to the founders of these companies. Some of it went to investors, employees, and others. But the entrepreneurs who founded them received by far the biggest chunk.

That's why 80%, a full 4 out of 5, of individuals with a net worth of $5 million or more (called "pentamillionaires") are entrepreneurs who started and sold their businesses.

Here are some acquisitions that have taken place in just the last few days:

  • Sega purchased Atlus, a gaming company, for $141 million

  • Xchanging, an outsourcing services company, acquired e-sourcing provider MarketMaker4 for $22 million

  • EnerSys, an industrial battery manufacturer, agreed to acquire Purcell Systems, an electronic equipment company, for $115 million

  • Intel purchased Indisys, an artificial intelligence technology for $26 million and Omek, a gesture-based interface company, for $40 million
  • Google acquired mobile startup Bump for over $30 million (exact amount not disclosed)


And the list keeps going.

Now importantly, I want you to understand why each of these companies was acquired for millions of dollars. Here's why: each of them developed the right value drivers.

You see, whenever a large company considers buying a smaller company, they make a "build or buy" decision. That is, they think, "how long and how much money will it take for us to build what that company has already built." And then, they compare that answer to the price at which they could buy the company.

And when the larger company realizes that buying the smaller company is less expensive (in terms of dollars and time savings), they buy it. And as you read above, they often buy it at a huge price.

Now, what value drivers do buyers want?

I have identified 21 different value drivers they want. Such as the following:

1. Customers: the more customers you have and the more valuable your customers are, the more acquirers will pay to buy your company.

2. Intellectual Property: the more intellectual property you have, such as patents, trademarks, copyrights, and trade secrets, the more your company is worth to acquirers.
 
3. Team/employees: the more talented and trained your team, the higher the price the acquirer will pay for you.

So, be sure to build your company with these value drivers in mind. When you figure out which of the 21 value drivers are most important to acquirers in your sector, and focus on building them, you'll soon get to a massive payday - a big acquisition of your company.

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The 8 Things Angel Investors Want


 

There are eight key things angel investors will look for when considering whether or not to fund your business. No, you don't have to satisfy all of these criteria. But the more of them you do, the better the chance they will say "yes" to your funding request.

#1: They Like You

Believe it or not, this is really important. No matter how good your venture is, if the investor doesn't like you, they generally won't fund you. So, build rapport with prospective investors and give them the respect they deserve.

#2: They Feel Good About the Venture's Genre

Even if the investors likes you and even if they think your company can be a huge success, they need to like what the venture is all about. For example, someone who hates politics will generally not fund the new political website you are launching. So, find investors who have an affinity for the type of venture you're launching/running.

#3 They Feel a Void


If an individual is an ultra-successful business person who is currently running multiple operations, they are generally not going to invest in more ventures. Since, they don't have a void; they have all the excitement in their daily life that they need. Conversely, a person who feels they might be "missing out on the action" will be more motivated to invest in you.

#4 They Feel There's Good ROI Potential

This is obviously important. Even if investors like you, the type of business, and they feel a void, they generally want to believe they will get a nice return on their investment if they fund you.

There are five sub-criteria to this, which get us to our sum of eight things angel investors want.

#4a: Scalability


Does your company have a strong potential to achieve significant annual revenues? In a truly scalable business, you can multiply your sales without having to greatly increase your resources. Scalable businesses grow more rapidly and can reach an exit (whereby the investor gets their return) faster.

#4b: High Barriers to Entry


Barriers to entry are those things that make it difficult for another firm to compete against you, such as patents or proprietary technology, a unique location, strategic partnerships, and long-term customer contracts.

The stronger and/or more barriers to entry you have, the more likely you are to succeed, and the higher expected ROI the investor has.

#4c: Worthy Management Team


Angels must believe in both the founders and the key operating personnel of your company. Because even the best idea will fail if the team isn't good enough.

#4d: Your Exit Strategy

Your "exit strategy" or method in which you will "exit" your business, is generally to sell it or go public, with the former being much more common. As such, it's good to think about your exit strategy early. Who might want to buy you in the future, and why?

Since angel investors can't realize their investment until you exit, be sure to prove to them that such an exit is viable.

#4e: The Right Price

Finally, angel investors will only invest when the price is right. If you price your equity too high, angels may not have the potential to reap significant enough returns and will not invest.

We see this on the show Shark Tank all the time. The entrepreneur says, for example, that for $400,000 they will give up 10% of their company. The sharks always laugh at percentages like this and say they will need at least 40% of the company or more for that dollar amount.

While the sharks are much more sophisticated, and shark-like, than your common angel investor, you need to price your equity fairly (give them a fair equity stake for their investment) if you want them to fund your venture.

Knowing these 8 things that angel investors want will help you identify and convince the right angels to fund your business!

For my complete game plan for raising funding from angel investors, check out our Angel Funding Formula.

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A Unicorn of One’s Very Own?


 

Last week, I wrote about the strong ambition across the globe to have a "Silicon Valley of One's Own," and to replicate the otherworldly innovation of a region that has produced more than 75% of the World’s Unicorns - technology companies started since 2003 that now have valuations of more than $1 billion.

Then, on Monday I went deeper into the drivers of this remarkable concentration along with the macroeconomic drivers of today’s very hot IPO and M&A Markets: long-term low interest rates, the $1.5 trillion in cash held by big tech. companies and private equity firms seeking deals, and venture investor’s now almost universal realization that only via extremely large exits they obtain alpha.

All of this is well and good, but what we found out was of much greater interest was to look at the common attributes and mindsets of these unicorns and their prospective investors and then how to integrate these elements into YOUR entrepreneurial and investment approach, especially when:

•    As an entrepreneur, you know that you don’t have a business with “billion dollar potential”

•    As an investor, you are more frightened than excited by the “big outlier” return phenomenon

We put it all together and boiled it down to the most essential and actionable insights, and are going to share them via webinar on Thursday at 7 pm ET / 4 pm PT.

Do sign up now via this link: https://www2.gotomeeting.com/register/622073466

I look forward to your attendance and feedback!

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Tech. Exit Trends in Today's Hot Markets [Webinar Invitation]


 

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Webinar Invitation

Tech. Exit Trends in Today's Hot Markets

Monday, September 29th

=====================


My Wednesday column as to tech. opportunities far from Silicon Valley was well-received, but frankly left a lot of folks wanting more.

Mostly what was asked was a variant of a common theme: How can I apply the wisdoms and best practices of the Uber - successful Silicon Valley entrepreneurs and investors to my business, or to the one I advise, or are invested in.

It was almost a hope against hope, something that most unfortunately are almost too scared to dream about…

...Having / being involved with a unicorn of one’s very own.

How important is this?  Well, given that last week's $25 billion Alibaba IPO was greater in size than 2014’s other 154 IPOs - combined - even slightly improving one's "Unicorn Landing" odds has enormous expected value.

Webinar Invitation

So I and my research team collected and analyzed some of the best research on the topic, from the Kauffman FoundationNVCAPricewaterhouseCoopers,Dr. Robert WiltbankHarvard University, and TechCrunch’s Aileen Lee, including:

- Categorizing the common attributes among 39 companies started since 2003 that are now valued at more than $1 billion

- The relative likelihood of success of enterprise (B2B) versus consumer - facing (B2C) business models

- How the great liquidity in today's market, with some estimates showing more than $1.5 trillion in cash being held by strategic tech. buyers and private equity firms, is impacting deal modeling and valuation analysis (all the way down to the startup stage)

- How and if yesterday’s report from Harvard University that for their endowment VC return for FY 2014 was 32.4% (compared to a 15.4% return for its total portfolio and the S&P 500's 21.38%) was an outlier, a harbinger of an over-heated market, or a reasonable return expectation given the high variance and the illiquidity of the asset class?

We put it all together and boiled down the most essential and actionable points, and are going to share our findings via webinar on Monday at 2 pm ET / 11 am PT.

Do sign up now via This Link

I do look forward to your attendance and feedback!

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Far from Silicon Valley: From Startup to IPO?


 

I had the good fortune to moderate a panel at last week's IBA Silicon Valley from Start-up to IPO / Exit Conference.

With entrepreneurs, venture capitalists, attorneys, and investment bankers from over 18 countries represented - from places as far afield as Switzerland, Singapore, and Spain (and Santa Monica and Silicon Valley!) - it was a truly international gathering.

Predictions were shared ranging from the outcome of the Scottish independence vote (incorrect) to Alibaba’s 1st day’s trading closing price (correct!), to animated discussions on the differing perspectives on Internet privacy in the U.S. and Europe.

But, the main thrust of the conference call was quite simple.

It was an inquiry, especially from the conference’s international attendees, as to how and why such an incredibly high percentage of the tech. start-ups that turn into “Unicorns” - businesses with exits via IPO or acquisition of greater than $1 Billion - emanate almost exclusively from the United States, and far more specifically from Silicon Valley.

How concentrated is this phenomenon? Well, as shared by Doug Gonsalves of Mooreland Partners, more than 70% of these Unicorns - names like Dropbox, Airbnb, Facebook, Splunk, Uber, Waze, LinkedeIn, and Palantir - were born and are headquartered in a “30 mile circle around San Francisco Airport.”

The “top down” effect of this cannot be overstated.

These huge exits and investor wins drive the fact that the Bay Area - with less than 6 million people - ingests close to 50% of all U.S. venture capital funding, which in turn is four times as much as in all of Europe.

This in turn drives an as large disparity in the number and quality of tech. startups and innovation emanating from various points on the globe.

Now, my perspective on this concentration has been mostly as an American businessman, as one that lives and works in Los Angeles (which may seem close to Silicon Valley, but to those who know both places can attest are worlds apart).

But visiting with entrepreneurs and executives from Europe, Israel, India, Singapore, and beyond brought the matter into much sharper relief.

Gil Arie of Foley Hoag shared the Israeli perspective - one where the best tech companies there as often as not are making the simple and powerful decision to move themselves (and their families) from across the globe for a Valley presence.

Sure, these companies can (and prefer) to build engineering teams in the lower cost, talent rich environs like Israel, India, Eastern Europe, etc., but for the “top of the pyramid” stuff - strategy, product design, capital formation and funding – being in the Valley feels like a necessity.

But expressed also was a strong counter-balancing sentiment, a deep desire to prove that world and industry leading technology companies can be born and grown far from Sand Hill Road.

And surely it will be so.

For this ambition - always in abundance in the world's best entrepreneurs - to build something that is theirs will eventually push back on the Valley's admirable yes, but also unnatural hegemony on global tech innovation and wealth.

And the great thing is that it will be far from a zero sum game.

Just think about it - if even a small fraction more of the world's Seven Billion People could live, work, and dream in a culture as forward and possibility - filled as Silicon Valley's…

Anything is possible, is it not?

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7 Things You Must Know to Raise Money


 

Raising funding is hard. This is actually a good thing. Because if it were easy, everyone would raise money and start a business, and competition would be ferocious. Better yet, since most entrepreneurs won't take the time to read this essay, you'll know this insider information and have a huge leg-up on them in raising capital.

So, here are 7 things you must know to raise money today.


1. Understand That Funding Doesn't Take Place All At Once

No matter how great your company or idea is, you are probably not going to get a $10 million check right away. Rather, you will typically raise several "rounds" of capital.

You start with a smaller round or amount of funding. Then, as your business grows, you are eligible for larger rounds of funding. This is because your business proves itself over time (eliminating some risk to investors) and your valuation rises as you grow (enabling you to raise larger sums of money).

2. Choose the Proper Source(s) of Funding

Choosing the right source of funding is the key to the Growthink Funding Pyramid™. Some forms of funding are much easier to raise than others. And based on your stage of development, different forms of funding are more relevant.

For example, the funding sources available to a pre-revenue startup are very different than the sources available to a 3-year old company generating $1 million in annual revenues. Case in point: Google initially failed when it tried to raise money from venture capitalists. The key is to go after the right sources of funding at the right time.

3. Build Relationships Early

According to Fred Wilson of Union Square Ventures, "The perfect entrepreneur/VC relationship is one where each has established respect and trust with the other well before an investment transaction is broached."

The key is to build these relationships early. So, even if you don't qualify for a $5 million round of venture capital today, start meeting with venture capitalists so they know you when you do qualify a year from now.

4. Keep Your Business Plan Current

One of the most important things to show in your business plan is what you've accomplished in your business to date. And ideally, every month you are accomplishing more. So, be sure to update your plan with this progress.

Importantly, when you meet a lender or investor, you want to be able to give them your business plan in a timely manner. So finish your plan now, and keep it up-to-date, so you can send it off at a moment's notice.

5. Always be a Marketer

In raising money, the best company doesn't always win. Rather, the best marketer wins. That is, the entrepreneurs that are best able to market their companies to lenders and investors are the ones who raise the money.

Marketing is the process of finding the right investor, convincing them to meet with you, and then convincing them to invest in your business. Yes, this is very similar to how you market a product or service. So make sure to use your marketing skills.

6. Have "Thick Skin"

When raising funding, be prepared for a lot of "no's." Going back to the Google example, even when Google was ready for venture capital, the majority of venture capitalist said "no."

When an investor says "no," it doesn't necessarily mean that your venture is not a good one. It simply means that the venture is not a good investment fit for them. You must have "thick skin" and be able to bounce back from lots of "no's" and persevere.

When failing over and over again to create the light bulb, Thomas Edison famously said, "I have not failed. I've just found 10,000 ways that won't work." Have the same mentality with investors. That is, think, "I have not failed. I've just found 100 investors that aren't a good fit."

7. Adapt as Needed

While you must have "thick skin," that doesn't mean to be foolishly stubborn. What I mean by this is that if you hear the same feedback from investors over and over again, you shouldn't ignore it. Rather, you should adapt.

For example, if several prospective investors tell you they want to see a sample of your product or service before considering funding you, create it for them. Don't just plow forward with contacting more and more investors in this case.

By adapting to the needs of investors, particularly when you hear the same feedback multiple times, you can make the requisite changes to raise the money you need.

Understanding these seven funding truths will help you raise the funding you need to grow your business. For additional assistance, this "truth about funding" presentation will prove quite helpful.

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