If raising money was easy, would it be a bad thing?
Well, according to Bob Johansen, in his book "Get There Early," the tension between people with ideas and people with money provides the energy for innovation.
He further states that if this dilemma were solved, that creative energy would dwindle.
Now, I don’t necessarily agree with this, because the reason why entrepreneurs go into business is NOT to raise money.
Rather, that majority of entrepreneurs go into business for other reasons. For example, according to a recent survey by Grasshopper, 44% of entrepreneurs started their business since they “saw an opportunity to make something great.” Eighteen percent started their business “to fulfill my life dream.” And 7% started “to help others/give back.”
But, raising money is a necessary evil for most entrepreneurs.
And, I do agree that if it were too easy to raise money that it would be a bad thing. Why? Because there would be too much competition.
I often give my barber example to explain this. I grew up in a small town called Rockville Centre in Long Island, NY. The town had about 30,000 residents and two barber shops.
Well, what if raising money was too easy and 8 new aspiring barber shop owners each opened up stores. That would make 10 barber shops in one small town. Clearly the market couldn’t support that. And most likely virtually all the barber shops would go out of business (and the last one standing may not have been the best one, but the one with the most money in its coffers).
So, if raising money was too easy, there would be too much competition.
But, should raising money be as hard as it is? Clearly not.
And it isn’t if you invest in learning how to raise money. I see raising money as similar to someone passing the bar exam. Passing the bar exam is not about knowing what’s wrong and right (which is what the law should be about). It’s about doing your homework and understanding how things work. It’s the same thing with raising money.
Have you ever seen a TV ad and found yourself really confused?
Like you just don’t get what they were trying to do. And what they did do certainly didn’t appeal to you?
For me, I saw tons of these ads in the late 1990s when I was living in California.
That’s when the West Coast fast food chain, Carl’s Jr. unveiled its “If it doesn’t get all over the place, it doesn’t belong in your face” ad campaign.
The ads featured teenagers eating Carl’s Jr. burgers with ketchup and juice dripping from the burger onto their clothes. It was pretty gross and did NOT want to make me go there.
But these ads were tremendously effective.
Why were they effective? Because they really appealed to their target customers – teenagers!
And because I wasn’t a teenager, the ads didn’t appeal to me at all.
The critical point is this – Not everyone has to get your story or message. The only one who must get it is your target customer.
And it’s often times OK to have multiple target customers, but in your marketing efforts you must speak to each individually. Or your efforts will achieve mediocre results at best.
For example, imagine your target customer was single men aged 40 to 50 living in Omaha, Nebraska living in 2 bedroom apartments who like to watch American Idol. I bet you could craft a message to this highly defined market that makes them salivate to learn more about or buy your product or service.
Creating tight messages that appeal to your target customer is not only critical in generating sales. It is also critical in raising money for your business.
Unbeknownst to most (and particularly those that fail to raise money), your business plan and investor presentation materials are marketing documents. They market your company to investors and lenders and try to convince them to back your company.
In your business plan, you absolutely must speak to your target customer – the investor or lender you hope to back you. You need to understand THEIR needs (e.g., to get a solid return, get their interest and principle back, stroke their ego, etc.) and position your company as the one to meet their needs if you want to be successful!
So, whether you are creating an advertisement or business funding request, make sure to think about who are target customer is; and tell them a story that appeals to them (even if it doesn’t appeal to or even turns off others).
(If you haven’t yet completed your business plan, and need a plan that makes investors salivate, my 2 recommended options are: 1) check out Growthink’s Ultimate Business Plan Template for creating the plan yourself using our proven template, or 2) Growthink’s business plan consulting service whereby we will create your full, investor-ready business plan for you.)
As an athlete for all of my youth, I was always a huge fan of John Wooden.
Wooden, as you may recall, was the legendary UCLA basketball coach who won ten NCAA national championships in a 12-year period. No other college basketball coach has come close to achieving this feat.
Wooden also wrote a powerful book called "The Pyramid of Success." The book showed his 15 building blocks for winning at basketball and in life. Not only have Wooden's teachings been adopted by coaches and athletes, but many, including me, found his lessons to be completely applicable in the business world.
Click the image below to download Coach Wooden's Pyramid of Success:
A few months ago, I watched a documentary on John Wooden. One of the most interesting things I learned was that he started every basketball season with the same lesson. Specifically, he taught his players how to tie their shoes properly.
Some of his former players joked about this. Imagine, having some of the best 18-22 year old college basketball players learning how to tie their shoes properly. To most, that would seem unnecessary. But Wooden always believed that you need to get the basics right before you can do anything else (e.g., if a player developed blisters on their feet, they couldn't play their best even if they were perfectly coached in every other aspect of the game).
Last June, Coach Wooden died at the age of 99. He leaves behind a legacy and amazing principles of success for us all to follow.
I hope that I will do my part in helping Coach Wooden's legacy live on -- I included Wooden in my Leadership Blueprint program teaching entrepreneurs to become better leaders. So they, like Wooden, can lead organizations that win consistently, year after year after year. Check out my Leadership Blueprint video here.
When I started Growthink over a decade ago, I thought I knew more about management then I did.
One of the things I clearly did wrong was running meetings. Looking back, it pains me to think of the literally hundreds of hours lost on inefficient meetings.
Fortunately, over the years, my team and I have read and tried pretty much every technique for making meetings more efficient, and boiled it down to just 8 essential rules.
Following them will make you and your team MUCH more productive. Here's my list of the 8 rules:
1. Start on time. If 3 people wait an average of 2 minutes per meeting for the fourth to arrive, that adds up to hours of lost productivity over the year. It's also extremely frustrating, and starting a meeting in a state of frustration kills creativity.
2. Have a written agenda. Ideally circulate your agenda 24 hours in advance of the meeting so that you and all the participants are as prepared as possible.
3. Everyone must participate. In meetings you want to encourage all viewpoints so you can make the best decisions. So get everyone involved.
4. Stick to a schedule. The entire meeting and each agenda item must have a time limit. If an individual agenda item goes long, revisit it at the end of the meeting (if there's time), or schedule another meeting to discuss it. The discussion for each agenda item should end only when specific action item(s) have been determined, written down, and assigned.
5. Stay on topic. While it's ok to go off on an occasional tangent, you must guide the discussion back on topic. The agenda and time limits will help with this.
6. Don't hold unnecessary meetings. If you have trouble creating the agenda (in that there's nothing too important to discuss), it might mean that you shouldn't hold the meeting in the first place.
7. End meetings with complete clarity regarding the key action items and who will complete them. This is key. Coming up with great ideas during a meeting is meaningless, unless those ideas are documented and assigned to individuals to execute on.
8. Improve. Every five or ten meetings, get feedback from your group regarding ways to improve how your meetings are run.
These 8 rules will make your meetings more productive, and you and your team will accomplish much more and be much more successful!
For tons of other productivity tips and tactics, check out my Productivity Secrets for Entrepreneurs here.
I have two close friends that are very much alike.
They both grew up playing the same sports. They both look fairly alike. And they both went to the
same college and got nearly the same grades.
But one of them is now wildly successful, while the other is still sort of just getting by.
I had my hunch regarding why they have achieved such different outcomes in their careers. But it wasn't until the other day, when I picked up "The Luck Factor" by Richard Wiseman, that the difference became crystal clear.
In his book, Wiseman described an interesting experiment.
In the experiment, a researcher filmed two people, Martin and Brenda. Both had volunteered to participate in a study, even though they didn't really know exactly what the study was about. Prior to the study, Brenda described herself as an unlucky person. On the other hand Martin considered himself an extremely lucky person.
Both Martin and Brenda were sent to a coffee shop and told to wait for a researcher to arrive. The research team put a $5 bill on the ground in front of the shop. Martin saw the bill, picked it up, went in, sat down at the counter, and had a nice conversation with a businessman sitting there (who was actually the researcher).
Brenda, on the other hand, failed to notice the bill, stepped over it, sat down next to the businessman and did not say a word.
After the experiment was over, the researchers interviewed both Martin and Brenda. Specifically, the researchers asked each if they thought anything lucky or unlucky had happened
to them that day.
Martin was thrilled about having found the money and about his nice conversation... while Brenda described her day as uneventful.
What's so interesting is this: Both Martin and Brenda had the SAME EXACT OPPORTUNITY, but only Martin, who started the day feeling lucky, enjoyed and got value from it.
The point is this: How you feel about yourself, be it lucky or unlucky, WILL shape your success. Particularly your success as an entrepreneur. Because feeling lucky allows you to better see and act upon opportunities.
Importantly, the author's research found that luck has nothing to do with mere chance. And studies show that lucky people cannot predict good fortune, like winning the lottery, any better than unlucky people.
Also, people who consider themselves lucky do not score higher on IQ tests than unlucky people. And they are less superstitious than "unlucky" people.
But lucky people expect their lives to be full of luck, and are thus always on the look-out for more. They don't see setbacks as final outcomes. Rather, they look for opportunities and start working optimistically again toward positive outcomes.
And importantly, the author believes that with commitment and steady work, anyone can retrain their thinking and habits to improve the quality and quantity of luck in their lives.
I would venture to guess that virtually all successful entrepreneurs consider themselves to be very lucky. More importantly, I bet that BEFORE they became successful entrepreneurs, that they considered themselves to be very lucky. Because you must be able to see opportunities and act on them in order to be successful.
So, if you find yourself thinking negative thoughts, zap them. Everyone has obstacles to overcome en route to entrepreneurial success. Know that you can overcome your obstacles and achieve
If you want personal mentoring from me and my senior team to overcome any obstacles you face, and to successfully capitalize on opportunities, join Growthink University today.
UPDATE: Venture Capital Bootcamp is now live.
This Thursday, June 3rd at 12pm EST, we will be opening the doors
to Venture Capital Bootcamp, our 4-week online venture
capital coaching program. You’ll receive step-by-step training walking
you through the entire venture capital process from start to
Here's an overview of what we'll be covering each week...
Week 1: Preparing to Raise Venture Capital
During Week 1, you’ll learn:
* The pros and cons of debt vs. equity capital (and unique advantages of VC)
* Key venture capital terminology you must know to get funded
* How angel investors can help you raise venture capital
* What venture capitalists will want to see BEFORE writing you a check
* And more...
Week 2: Finding and Contacting Venture Capitalists
During Week 2, you’ll learn:
* How to create a targeted list of VCs who will actually want to hear your pitch
* Top mistakes to avoid when contacting venture capitalists
* 6 ways to get tons of VC meetings (even if you don’t have ANY “connections”)
* How to tell if a VC is serious about funding you (or just wasting your time)
* And more...
Week 3: How to Pitch Venture Capitalists
During Week 3, you'll learn:
* How to protect your business ideas when meeting with VCs
* The 10 things you must cover in your VC pitch
* Top venture capital presentation mistakes to avoid
* Effective follow-up strategies for after your VC meeting
* And more...
Week 4: How to Negotiate with Venture Capitalists
* When to hire a lawyer
* How to maximize your valuation (so you keep control of your company)
* What terms to watch out for in your venture capital “term sheet”
* How to prepare for venture capital due diligence, so it goes smoothly
* And more...
Also: Weekly Q&A Call-In Sessions
The weekly training modules will answer most of your
commonly-asked questions about how to raise venture capital. However, as
you really get into the venture capital process... and you start
contacting and meeting with investors, you’ll likely have questions
about what to do next.
That’s why I’ll be holding Four 90-Minute Q&A Sessions during VC Bootcamp, at the end of each week. Each session will last approximately 90 minutes.
Here’s the Weekly Q&A schedule:
Week 1 Q&A call: Friday, June 11 at 12pm EST.
Week 2 Q&A call: Friday, June 18 at 12pm EST.
Week 3 Q&A call: Friday, June 25th at 12pm EST.
Week 4 Q&A call: Thursday, July 1st at 12pm EST. *
* (I’ve scheduled the last call for Thursday, rather than Friday, so we won’t conflict with the Fourth of July holiday weekend.)
You’ll receive the dial-in instructions after you register for VC Bootcamp. And each Q&A session will be 90 minutes long, so you’ll have the opportunity to ask me any and all questions you have about how to raise venture capital.
And, if for any reason, you’re unable to attend one of the sessions, we’ll post recordings of the Q&A calls in the members’ area for you.
My Q&A calls are a tremendous opportunity for you to get all of your questions asked, so you can approach investors with greater confidence.
Plus: 1-on-1 Venture Capital Coaching
When you attend VC Bootcamp, you’ll also be paired up with your own personal Venture Capital Coach, for three 1-on-1 coaching sessions.
During these coaching sessions, your Coach will give you personal feedback on the three most critical elements of your VC campaign:
1. Business Plan Review
Your coach will review your business plan with you and give you feedback on how to make sure your business plan will impress investors.
2. Venture Capital List Creation
Your coach will help you create the perfect list of VC firms for you to contact, and will also help you craft the message you’ll use to line up face-to-face meetings with venture capitalists.
3. Venture Capital Pitch Feedback
Your coach will review your VC pitch with you, and will prepare you to answer all the tough questions that VCs are likely to ask you.
Limited to 150 Attendees
We are strictly limiting enrollment in VC Bootcamp to 150 attendees.
And that’s for a couple of reasons…
The main reason is because we have a small coaching staff. We only have the staff to coach 150 entrepreneurs at once. Our 10 coaches will be coaching a maximum of 15 students, each. I’m limiting each coach’s workload to make sure you get the personal attention you need.
The other reason is that I want to make sure that the Q&A sessions are manageable, so you’re able to get ALL of your questions answered.
Click here to register for Venture Capital Bootcamp
50 years ago, Squaw Valley, California played host to one of the most treasured and revered Olympic games in history
Now, half a century later, the opportunity to craft another chapter in the region's rich Olympic heritage is upon us.
There is a strong probability that the Unites States will submit a region for consideration to host the 2022 Winter Games, and right now Reno-Tahoe region is positioned to be the clear front-runner.
The Reno Tahoe Winter Games Coalition has been working diligently to prepare for this opportunity. Influential regional leaders, such as the Coalition’s Chair Nevada Lieutenant Governor Brian Krolicki and Squaw Valley Ski Corporation’s Nancy Cushing believe that Reno - Tahoe will once again successfully host the Olympics.
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Not long ago, I drove from NY to Maryland to meet with 15 successful business owners for 2 days. Very cool stuff.
It's hard to realize everything you don't know until it's right in front of your face. You see, each of us took turns speaking. We each spent 30 minutes discussing things that were working well in our businesses, and then 30 minutes talking about things that weren't working so well and soliciting feedback from the group.
I walked away with 2-pages of great ideas to implement.
So, after the "Mastermind" meeting, I'm driving home from Maryland and something strange got my attention. This red truck sped by me. And it had a decal that really pissed me off.
The decal said: "Born to Hunt....Forced to Work"
Now I'm not upset about hunting. I'm not a hunter. And I know a lot of folks disapprove of hunting. But that's not my issue.
My issue is someone saying that they are forced to work.
You see, my decal would read:
"Born to Be An Entrepreneur...Happy to Work as an Entrepreneur"
Meaning that your work should be what you love. If you love to hunt, then make that your business. Sell hunting equipment or apparel. Set up a website for hunting enthusiasts. Become a coach that teaches hunters to improve their skills.
You get the point...
I just hate it when folks complain...when the answer is within their reach.
If you aren't running your own business yet, create your own decal. What would you say you are born to do?
And then figure out a business that you could start to leverage
And then create your business plan.
And then raise capital.
And then you're off to the races.
P.S. It's so powerful to get together with like-minded entrepreneurs. It's the fastest shortcut to explosive business growth I know of....
You get to avoid the mistakes that others have made before you... But more importantly, you can make huge leaps and bounds by learning what's working in each other's businesses.
Frankly, I wish I hadn't waited so long to join a Mastermind Group. And I'm even thinking about creating and running my own at some point in the future.
Do you know what Google, PayPal, Microsoft and Adobe Systems have in common (besides being successful tech companies)?
They all evolved substantially before becoming major successes.
Google started as a search engine. But only after it acquired Applied Semantics, did it realize its true business: text-based advertising.
Microsoft began by building programming software. Later, it found its business in operating systems, Microsoft Office and servers.
After the dot com bust, I served on a panel with Tom Clancy, a former partner at Enterprise Partners Venture Capital, a billion dollar venture fund in San Diego.
Having been burned by poor investments like most other venture funds, Clancy said that, going forward, Enterprise Partners would wait at least six months before funding any new company they met.
Their rationale was that during the six month period, they would see what the entrepreneur was able to accomplish. If the entrepreneur accomplished the
milestones set forth in their business plan, than they were deemed worthy and would receive funding. If not, they would not.
The rationale behind the strategy makes sense. Venture funds primarily invest in people, and those people with a proven track record are typically the best bets.
So what is the entrepreneur to do during the six months in order to get the investor to write them a check?
Obviously they need to achieve milestones... But what else?
Before I give you an answer, I want you to know how crucially important this is, not only in raising capital, but in securing key partnership and gaining key customers.
Let me give you an example of an entrepreneur who successfully used this technique in order to get a key partner. This entrepreneur is now a famous author and marketer. His name is Chet Holmes. And one of the key reasons that Mr. Holmes achieved success was through his partnership with marketing guru Jay Abraham.
How did Holmes get the partnership with Abraham? Like many people, he tried to reach him by phone, fax and mail. But Holmes did it every other week...
...FOR TWO YEARS!!!
Then, he finally got a call from Abraham's business manager for a lunch appointment, flew to Los Angeles for lunch, and established a very profitable partnership.
So, what's the answer to the question of how to woo investors, customers, partners, advisors, key hires, and more over six months?
Effective and persistent communications. In other words...
You must consistently, over a period of time, hammer home your message to investors, key customers and others.
What exactly does this mean? For investors, once you meet them, you should follow-up with them at least twice per month to update them on your progress. For prospective customers, you should contact them on an ongoing basis to continually give them value and convince them of the benefits
of working with you. And of course, don't forget to follow-up with your existing customers.
And a key here is that this follow-up should NEVER END unless or until the costs of the follow-up clearly outweigh the benefits.
Remember that people invest in, buy from, and partner with other people. So, who would you rather work with? Someone who has been contacting you for two years with quality messages regarding why you should partner with them, buy their product or invest in them? Or someone who you just met yesterday and tells you how great they are?
The answer is clear.
Don't stop at the first contact. Choose the appropriate frequency (i.e., you don't want to be perceived as too obnoxious or pushy to potential investors), craft quality messages, achieve your milestones, and convince investors and others to work with you over time.