Growthink Blog

Effort is Everything


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Stanford psychology professor Carol Dweck in her book "Mindset: The New Psychology of Success," addresses the fascinating issue of why some people and companies achieve their potential while others equally talented and positioned don't.

The key, interestingly, is not ability.

Rather it is whether ability is viewed as something inherent that needs to be demonstrated or as something that can be developed and increased over time, through persistence and experience. Incredibly important for entrepreneurs is the corollary idea to this -- namely that if you take on the belief that ability can and must be developed (as opposed to being something that you either are or are not born with) that great strides in performance are possible.

This "effort effect" is really a key success metric for emerging and middle market companies. In today's globally competitive, fast-changing marketplace, great companies are built not simply via aggregating talented teams, but via aggregating talented teams and creating a corporate culture that rewards thoughtful risk-taking and "learning on the fly" -- thoughtfully incorporating market and competitive feedback into managerial decision-making processes.

Another way to think of the Effort Effect is that business in the 21st century is not a place for resting on one's laurels, resume, or past successes. Rather, it is an increasingly global, level playing field where individuals and companies can rise from the humblest of circumstances, and via effort and imagination, rise to compete and win on the grandest of stages.

And make themselves and their investors a lot of money in the process.


Seeking Alpha


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The overriding body of statistical research conducted over the past 30 years shows that the vast majority of all venture, private equity, hedge, and mutual fund manager's investment return performance is worse than that of the market averages.

Stepping back for a moment, one should really be struck by how absolutely amazing this fact really is.

Think about it - here are some of the highest-paid and theoretically smartest people in the world, and yet if you take their advice you will most likely have a below-average performing investment portfolio. A famous feature in the Wall Street Journal for many years had a cross-section of well-regarded investment analysts pick stocks head-to-head against a monkey and a dartboard.

And this randomly-generated portfolio did, on average, appreciably better than the portfolio assembled by the top-shelf analysts.

Now, once-upon-a-time in a more innocent age, these results could be taken in an almost light-hearted manner. Overall stock market performance was generally good enough to overlook the reality that the huge infrastructure of Wall Street brokerages, analysts, and commentators essentially added no value. Over the past 25 years, there was so much money to be had by all as the investment management industry grew from a relatively quiet backwater to the behemoth that it is today, institutional and individual investors did "well enough" to not rock the boat on this issue.

As an aside, I think the main reason for the relative quiet has been that the investment industry has always been truly the ultimate old boy's club. Pension fund managers, the family office guys, the analysts at the big wirehouses and those that ran mutual and hedge and venture and private equity funds all traveled (and still do) in the same social circles. They all went to the same Ivy League colleges. Same golf clubs. Same charity banquets. It has been, for a long time, a nice, lucrative, relatively low stress, insider's game.

But the event of the last 6 months have taught us that those days are over. And from the perspective of believing that entrepreneurs and the operators of companies, and not financial intermediaries, should get the lion's share of a capitalistic economy’s financial rewards, it is about time.

We here at Growthink, as any regular reader of our contributor columns know, are not interested in being sideline commentators or market prognosticators. We'll leave that to the talking heads. Rather, we focus our effort in identifying, in investing in, and in helping startups and emerging companies grow and prosper. Why? First, because we believe that entrepreneurship is by far the greatest force for positive social and economic change in the world today. And second, because in modern, efficient markets, it is ONLY via investing in these companies that investors can consistently earn alpha returns.

Startup and emerging company investing, when done right, offers a unique combination of both value and trading-based fundamentals. Value-based because entrepreneurial companies, on average, offer a far higher probability of revenue, asset, brand, and cash flow growth than larger enterprises.

And trading-based because the equity in these companies can be bought in highly inefficient markets. These inefficiencies are two-fold. First, these companies trade in inherently lopsided markets - there are always a lot more sellers of startup and emerging company equity than there are buyers of it. 

Second, because there are so MANY of them - more than 500,000 new companies in the U.S. coming on-line every month (startups) and more than 2.2 million firms with between 5-100 employees (emerging companies), the savvy, hard-working investor can consistently achieve significant information advantage in diligencing these deals.  

So, to seek alpha, turn off CNBC. Put down the Wall Street Journal. Or, chuckle-chuckle, tune out Washington. Entrepreneurial America has, and will continue to be, your best bet. And in the process of making a lot of money, you just make help change the world for the better. Enough said.


The Role of Outliers in Emerging Company Investing


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The world of successful startup and emerging company investing is one of outliers.  Winning big requires identifying the "needle in a haystack" company that becomes big and famous.  And  to do so while they are small and fledgling.  The biggest investing fortunes of our era have been made by the early investors in Google, in Amazon, in Apple, in The Body Shop, in Kinko's, and will be made in current high-flying startups like Digg, LinkedIn, Twitter, and Simply Hired, among others.

These companies are outliers.  They beat or are beating the statistics that show that over 90% of all new businesses don't make it one year, that 70% of those that remain don't make it 10 years, and that less than 2 out of 10 achieve exits that make money for their investors. 

Here is the rub, though.  Companies like The Body Shop and Kinkos, when they hit, are so incredibly wealth-producing that they more than make up for the significant majority of companies that do not get to profitable exits for themselves and their investors.  The central rule of startup and emerging company investing is that to win you MUST have one or a few BIG successes in your portfolio.   And by big success, we mean it in the context of Fidelity's famous Peter Lynch, as in a "10-bagger" -- or a return of more than 10x on your principal investment.

So how to get these winners in your portfolio? A heavy influence on my investment philosophy is Nassim Nicholas Taleb, and pecifically his groundbreaking economic and philosophical masterpiece, The Black Swan.  Taleb's 2 main theses as they apply to our investment space are as follows: 1) That all huge early-stage investment successes are, by their very nature, fundamentally unpredictable "outlier" events, and 2) through the cultivation of humilty in the face of this randomness does investment wisdom spring.

So a few cautionary notes. 
First, imbibe deeply the overwhelming evidence that nobody, not Bill Gates, not Steve Jobs, not Sergei Brin, not Jim Kramer, not Kleiner Perkins, not Sequoia Capital, not Genentech, not the sellers at AIG of collateralized debt obligations, not the Federal Reserve Chairman, and certainly not your friendly neighborhood financial advisor can predict the future with any true level of certainty.

Secondly, run, don't walk, away from those who purport that they can or have because this reveals them as being either naive or disingenuous, and usually both. The road to investment hell is paved by those who, through the simple law of averages, got lucky in predicting last month's price of gold, or of oil, or the Dow, or interest rates, or Las Vegas real estate, et al -- and then again, either naively or disingenuously, confused and/or promoted this luck with predictive ability. 
As Warren Buffett once famously noted, if there are a 1,000 stock pickers, the law of averages are such that, every year, 10 of them will show once-in-a-century return performance.  In short, take to heart that past performance is absolutely not indicative of future results and that big negative outlier events -- like the banking and real estate collapses of the past year -- can wipe out decades of investment return in just a few short months.

And to "get in the game" of startup and emerging company investing, approach it, as Taleb would say, with a "fractal" approach.  Expand your perspective beyond the usual investment suspects -- the Dow and big NASDAQ companies -- and look for the following qualities in your investment choices:  Companies with the aforementioned Peter Lynch "10-bagger" potential and ones which, because of the "micro" factors that determine their success, have return dynamics that are uncorrelated with the stock and bond markets as a whole.  Not a hard and fast rule, but the vast, vast majority of companies with these characteristics have high technology and intellectual property-based business models. 

Keep these few thoughts in mind and you will be head and shoulders above the average investor in doing the kind of deal-picking that puts a life-changing deal in your portfolio.

Naming Your New Company or Product


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I recently read a great blog post, from a company called The Name Inspector, about how to name your company or product. Whether your goal is to raise capital or gain the interest of partners or customers, the names of your company and products are critical.

In fact, when we first launched Growthink a decade ago, we started with the name BestBizPlan since we initially focused just on developing business plans. Realizing that we would expand beyond business planning, we changed the name to Growthink to reflect our desire and skill sets in helping entrepreneurs and business owners in growing their businesses via planning, capital raising, marketing, strategy and more.

The Growthink name has a better connotation and helps client, prospective clients, partners and employees better understand and relate to our mission. While I cannot attribute our company's success solely to our name, it certainly has helped us.

So, here are the ten ways for you to create great company (and/or product) names as suggested by The Name Inspector:

1. Use Real Words: These are names that are simply repurposed words. (e.g., Adobe, Amazon, Fox, Yelp)

This category also includes misspelled words (e.g., Digg (dig), flickr (flicker)) and foreign words (e.g., Vox (Latin 'voice').

2. Use Compounds: These names consist of two words put together (e.g., Firefox, Facebook).

3. Phrases: These names follow normal rules for combining words (but are not compounds) (e.g., MySpace, StumbleUpon).

4. Use Blends: Blended names have two parts, at least one of which can be recognized as a part of a real word (e.g., Netscape (net + landscape); Wikipedia (wiki + encyclopedia)).

5. Use Tweaked Words: Tweaked word names are derived from words that have been slightly changed in pronunciation and spelling - commonly derived from adding or replacing a letter (e.g., ebay, iTunes).

6. Use Affixed Words: These are unique names that result from taking a real word and adding a suffix or prefix (e.g., Friendster, Omnidrive).

7. Use Made Up or Obscure Origin Words: These names are generally short names that are either completely made up, or, since their origins are so obscure, they may as well have been made up (e.g., Bebo, Plaxo).

8. Use Puns: Puns are names that modify words/phrases to suggest a different meaning (e.g., Farecast (forecast, fore -> fare), Writely (rightly, right -> write))

9. Use People's Names: using a general name or the name from a personal connection (e.g., Ning (a Chinese name), Wendy's (founder Dave Thomas' daughter's nickname)).

10. Use Initials and Acronyms: names derived from the first letter of each word in the longer, more official name (e.g., AOL (America Online), FIM (Fox Interactive Media)).


The American Reinvestment and Recovery Act of 2009


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This is the first article in our “Bottom Line” series focused on the $787 billion plan, where we analyze the spending bill's significance as a stimulus for U.S. entrepreneurs and emerging businesses.

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The figures are mind boggling.  A few billion dollars there, $50 billion there.  And how about the $165 million from the Troubled Asset Relief Program (TARP) that made its way to the executives of bailed-out AIG in the form of bonuses?  The unprecedented amount of public funds being spent to save and spur the economy through recent programs certainly includes a bunch of life vests for those failed companies that are “too big to fail,” but what about for the Entrepreneurial Economy?  


The American Entrepreneurial Economy includes 550,000 new businesses started every month.  It includes the emerging market:  the 2.2 million firms in the US with between 5 and 100 employees.   These are almost all private companies and most are less than 15 years old.   According to the US Small Business Administration (SBA), small businesses (those with fewer than 500 employees) make up 99.7% of all US businesses, account for 50 percent of the gross national product and create between 60 and 80% of the net new jobs each year.  Entrepreneurs are confident – often stubborn – risk takers who take on personal debt so they can follow their dreams of launching new businesses.  They collectively make up the American business engine that largely drives innovation, invents new products, and creates new jobs.   

We at Growthink work with these companies and business owners everyday and have assisted almost 2,000 in the past 10 years.  Due to their impact on the US economy, we sure expect to see incentives for entrepreneurial companies in the stimulus plan, in addition to the $200 billion doled out to some of the largest financial institutions in the US. As a country, we don’t need to “bail out” emerging businesses in the sectors that will drive the economy – young firms that are working to improve healthcare, producing energy efficient products and developing environmentally-friendly pesticides – we need to spur them on.

We are following the distribution of stimulus funding closely.  This means we’ve had to spend countless hours trying to figure out what’s in the plan and who’s getting what – the plan is about eight inches thick and leaves most of the funding details to the various governmental agencies that oversee specific sectors.  It’s been no easy task.  Just because the federal government is giving away an unprecedented amount of money in a record amount of time to save the economy doesn’t mean that it’s not being given away by the same bureaucratic system that existed before the stimulus plan.

In our “Bottom Line” series on the stimulus plan, we’ll focus on just that:  What’s the plan's bottom line for the Entrepreneurial Economy?  During the Series, we’ll provide concise descriptions of the business opportunities in various sectors and provide insight into how to receive funding.   We’ll also provide honest feedback on the results of the program from the perspective of the entrepreneurial community.  

So far, we’ve come across reasons to be optimistic.  The plan includes programs for entrepreneurial sectors and includes promising opportunities for innovative, growth-oriented firms, such as:

  • More than $60 billion dollars in funding, grants and tax credits to promote energy efficient and renewable energy programs and products;
  • $7 billion to extend broadband services to underserved communities;
  • A focus on alternative sources of energy;
  • Almost $20 billion for healthcare technology;
  • $1 billion for a “Health & Wellness” Fund;
  • More than $15 billion for research and upgrading research facilities focused on key areas of innovation, such as climate change, biofuels, disease control and prevention, and technology innovation; and:
  • Enhanced and streamlined programs through the SBA.  


We’ve also seen some early outcomes that give us cause for concern.  Of course, there were those AIG bonuses, luxurious private jets flown by executives from failing automakers to beg Congress for bail-out money, and the hundreds of billions of dollars given to the firms that helped get us in this mess in the first place.  And hucksters, of course, have recently populated email spam folders with promises of stimulus funding in return for credit card information. 

But we’ve also seen frustration on the front lines when we’ve spoken and worked directly with leaders of promising businesses in those targeted sectors.   How do I apply for the funding?  Am I eligible?  Where do I even find the information?

Of course, part of the confusion and a lack of clear information are inevitable – current systems to notify businesses of the methods to access these funds are inadequate for such a surge in new programs.  But the confusion is largely due to the same complaints that start-ups and small businesses have expressed about government “support” programs for decades:  It’s difficult to even figure out what’s available and how to apply for the resources, and continues to be in the age of the Internet.  

During the next two weeks, we will provide those answers on a sector by sector basis.  No fluff, no platitudes, just the Bottom Line for your business.    

 

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The next article in our Bottom Line Series will focus on stimulus funds available for entrepreneurial companies in the healthcare sector.  


Kiva to Launch in the United States


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I recently wrote a blog post about Kiva and all the good it is doing worldwide.

As you may recall, Kiva is "the world's first person-to-person micro-lending website, empowering individuals to lend directly to unique entrepreneurs in the developing world."  Specifically, on their website, individuals who need small loans to start or grow their businesses request funding. And, other individuals from around the world offer this funding in increments as low as $25. To date, nearly 500,000 users have lent almost $65 million, interest-free, to developing-world entrepreneurs through Kiva.org.  $3.5 million was distributed last month alone.

Not surprisingly, since the majority of you are based here in the United States, in response to my email about Kiva I received lots of emails saying that Kiva should launch in the United States. I agreed.

And now, a few weeks later, Fortune Magazine is reporting that Kiva plans to launch in the United States within a few months. This could be a HUGE funding opportunity for American entrepreneurs!

Importantly, while the highest loan amount for entrepreneurs in the developing world is $1200, in the United States, it will be $10,000. One issue that hasn't been fully resolved is vetting. In the developing world, Kiva "uses microfinance institution partners to vet entrepreneurs before allowing them to solicit funding. By asking a series of questions to assess roots in the community and the legitimacy of a business, Kiva is able to establish a risk profile for each entrepreneur. Before offering money to, say, the proprietor of a Dominican fruit stand, any lender can read the entrepreneur¹s profile, history of defaults, and a bit about the business."

In the United States, Kiva says that they are "signing on microfinance partners in the Bay Area and in the Northeast," but have not released who these partners will be or how the vetting process will work.

In any case, this is GREAT news for American entrepreneurs.

You can read the full Fortune article here.

The People, or Execution Risk of a Business


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In my last column, I wrote about how to measure risk in a startup and/or emerging company.  In today's column, I go deeper into what is by far the biggest factor driving this risk - namely the "people," or execution risk of a company. 

It is extremely hard to identify a management team of a smaller company (or any company, for that matter) with the right combination of small business and corporate smarts, integrity, and work ethic to build and exit a company for themselves and their investors. 

In my 10 years at Growthink, I have had both the benefit and the misfortune of not only investing in and advising a lot of companies that were successful in executing their growth plans, but also a lot of them that weren't.  And it has been in the comparison between the two that has informed my thinking as to what to look for. 

Here are 7 managerial attributes that I have found present in virtually all of the successful companies with which I have worked, and which were lacking in those that failed:

7.  They are, in fact, a Team.  This may seem obvious, but all great companies are not simply the by-product of a visionary and/or charismatic founder and chief executive, but rather of a multi-disciplinary, multi-faceted, and well-meshed leadership team.  Great companies have cultures of achievement.  The tone of this culture might be, and usually is, set by by a charismatic founder.  But its enduring success is dependent on how it can replicate and maintain that culture as the company grows, and as its founder's role becomes less pronounced.  

6.  It is clear who is in charge.  This may seem contradictory to the above, but all well-led companies have clear and final points of decision-making.  There are many effective styles of leadership, from greatly autocratic to fundamentally consensual, but all of them share the fact that in them there is one person at whose desk the "buck" truly stops.

5.  They have small business discipline.  To paraphrase Guy Kawasaki -- one of the most informed and battle-tested entrepreneurial commentators out there -- the worst folks to run a startup or an emerging company are a group of ex-Microsoft executives.   Entrepreneurial companies are first and foremost small businesses.  As such, their management must a) fervently guard cash flow and manage with a cult-like intensity and b) always make decisions with the mindset that they only have so many "arrows in the quiver" in terms of time and capital to pursue initiatives.

4.  They are risk-takers.  The proper goal of an entrepreneur with outside investors is not to run a small business in the common sense of the term. With the fear of sounding harsh, the best managers are minimally concerned with protecting their own "middle-class" lifestyles.  Rather, they understand that to achieve greatly requires daring greatly.  For investors, the worst outcome of an investment in a company is not necessarily a flame-out failure, but rather a muddling along driven by too conservative managerial decision-making influenced by the desire to preserve salaries.  Companies run this way in fact usually require MORE money to be invested into them, and thus perversely are actually riskier than their harder-charging brethren.

3.  They are Goldilocks-ish.  While there are certainly outliers in this regard, the significant majority of the best entrepreneurial managers are not "too hot" nor "too cold."  Again, not a hard and fast rule, but most venture firms prefer to back a management team where the key people are between the ages of 30 to 45, have had a few past successes and maybe a failure or two.   They are now in that sweet spot between experience and wisdom, between youthful hunger and energy.  They know what they know yet they still have the intellectual and emotional flexibility and curiousity to change and grow.

2.  They are technologists.   All successful emerging company investments are made in what are, at their essence, technology companies.  This does not mean that they are all what would be considered as classic "emerging technology" companies (though the majority of them, in fact, are).    Rather, well-run modern companies leverage technology -- from CRM and ERP to SEO and SEM to scenario-planning and simulation -- to "best practice" their business models.   Their managers understand that "IT" is not just the domain of a geeky guy to call when computers can't boot up, but is rather the crucial skeleton of the organism of their business.

1.  They are pig-headed, determined, and willing to sacrifice to be successful.  More than anything else, great, modern managers work hard.  As in very, very, very, very hard. They work nights.  They work weekends.  They take short vacations, if any.  They work when they're sick.  They work when they're tired.  They work and work and work and then to paraphrase the great (and famously hard-working) golfer Gary Player, "The harder they work, the luckier they get." 
Look for this quality above all others in leaders and managers -- it is almost always the best predictor of the presence of the other qualities on this list, and of entrepreneurs that make their investors a lot of money.

Churrasco, Caipirinhas, and Emerging Technology with a Twist, Por Favor!


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It’s not often that we at Growthink get to see the fruits of our labors in person.  In today’s virtual, global economy, we conduct business with many small companies whose executives we may never meet and whose base of operations we may never visit.  However, we’ve served a vital purpose in growth planning and/or capital-raising for various clients who’ve paved the way in industry and innovation; and of that, we couldn’t be more proud.  Well, perhaps we could if we were there to see the evolution before our own eyes… to witness a milestone.

Last week, I had the great honor (and luxury, if I might say!) to travel to Brazil with my colleague, Dave Fruhling, and to spend time with a client that is developing a technology with the support of the Brazilian government and its university system.  For those who are not versed in emerging markets, Brazil is at the forefront of grant funding for the country’s entrepreneurial endeavors and inventions; the most notable of which has been airline manufacturer Embraer.  Setting a phenomenal precedent for new developments and technologies, this success has brought credibility to emerging economies like Brazil and has stimulated interest in the incubation of other new companies via federal organizations like FINEP (Financiadora de Estudos e Projetos).  More importantly, the university system (both public and private) provides a great deal of R&D for these companies, working collaboratively to provide validation and even certification of patented technologies.  This is not dissimilar to the United States, but what we found was that the accessibility of IP transfers is much more conducive under the Brazilian structure than it is within our own First World processes.

In the time we spent meeting with university research departments, funding organizations, and client partners, we saw nothing less than enthusiasm for and belief in the company’s ability to be THE NEXT Brazilian technological phenomenon.  It was contagious.  I don’t consider myself a tech guru by any means, but I came away full of excitement about propulsion systems, motors, and velocity.  

Is your interest piqued?  It should be.  This client is on the verge of international recognition over the next 3-5 years, and I had the opportunity to meet the people, see the research institutes, experience the test program, and live vicariously through the company’s champions; of which Dave and I now proclaim to be as well.  Sure, we were leading project efforts from our offices; and doing so with diligence and interest – but this trip made us invest even more.  Our team is dedicated to providing the best guidance to the client, to give them and ALL of their stakeholders a chance to be another Brazilian ‘success’ story.

Throughout all of the above, we wove in a mixture of cultural and team-building activities; most of which included eating, drinking, dancing, and even bowling.  Yes, bowling.  The latter – not surprisingly – is not very popular in Brazil, but the client knew of a club with lanes in the back; said lanes, which we graced until the wee hours.  I witnessed several occasions where the beer consumption-to-score ratio was quite impressive, though for one of the engineers on the project there remains little hope of a professional league title.

At one particular festivity, I was introduced to the Brazilian drink of choice: the caipirinha.  I was warned in advance that this sugar-cane drink was quite potent, so I consumed carefully with each one placed in front of me...  Low and behold, a dancer then pulled me on stage to show his “prowess” and skill with spinning ropes, featuring heavy ball-like objects at the ends that could very well result in concussion or death if they made contact with my head.  Despite the beverage intake, I managed to stand very still and exit the stage to applause and body intact.  Of course, it was quite the demonstration from the client’s perspective – my “hazing”, if you will, that garnered many a laugh and ongoing witty remark.

And then there was the barbeque.

Brazil is famous for its barbeque, or Churrasco, featuring grills the size of my apartment and meats seasoned then cooked to perfection.  Note to self: make proper use of the “on” and “off” markers on the table, lest risk a protein overload.  Topped off with mango mousse, it was all a little slice of heaven south of the equator!

On Friday the group dispersed and I explored Rio solo, reflecting upon the education I received from the experience and thanking a very tall statue of Jesus for the wonder of Brazilian people and culture.  Looking out over the lush mountains and the curving coastline, I could understand how one becomes inspired by such a place; a place ripe with beauty, passion, gusto and Bossa Nova.

Finding myself back Stateside, I vow to return again to stimulate my palette and to witness the next leaps of our client into the broader South American marketplace.


Educating Angels & What That Means for Entrepreneurs


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A few months back, a unique conference called "AngelConf" took place in Silicon Valley. The conference was organized for angel investors and its goal was to educate angel investors on how to invest in startups.

Key questions that the event addressed were:

  • How much are you supposed to invest?

  • What legal agreements do you need?

  • Where do you find startups to invest in?

  • How do you pick winners?

It was this last question that conference organizer Paul Graham from YCombinator agreed was the most important.

Graham's first point on this topic is that angel investors should pick startups that "make things that people want." Seems simple enough. However, Graham went on to say that angels should not invest in things that are already wildly popular. "By then it's too late for angels. VCs will already be onto them. As an angel, you have to pick startups before they've got a hit-either because they've made something great but users don't realize it yet, like Google early on, or because they're still an iteration or two away from the big hit, like Paypal when they were making software for transferring money between PDAs."

As such, angel investors need to be able to predict future market sizes (not just identify markets that are already doing well).

Graham's second point on this topic is that angel investors need to pick founders who are winners. On this point, he said the following:

"What makes a good founder? If there were a word that meant the opposite of hapless, that would be the one. Bad founders seem hapless. They may be smart, or not, but somehow events overwhelm them and they get discouraged and give up. Good founders make things happen the way they want. Which is not to say they force things to happen in a predefined way. Good founders have a healthy respect for reality. But they are relentlessly resourceful. That's the closest I can get to the opposite of hapless. You want to fund people who are relentlessly resourceful."    

Now, what this means to you as the entrepreneur is that this is how you will be judged by many angel investors. They will judge the future potential of your business concept and they will judge the potential of you and/or your management team.

With regards to the potential of your business concept, you must convince them that your market is poised for growth, and in doing so, you MUST cite multiple research and statistical points that confirm your views (I can't reiterate enough how critical great market research is).

With regards to the quality of you, the founder, and/or your management team, you need to show the investor, via past performance and ALL current interaction between you and the investor that you are a winner. You need to show them that you make things happen. Here are some examples of how can you accomplish this:

  • Tell them a current business objective and come back to them two weeks later and show them you have achieved it.

  • Find some way you can help them (e.g., introducing them to a business contact of yours that could help them) and execute on it right away.

  • Ask them about questions they have about your opportunity and/or market and come back to them within 24 hours with great research and answers to their questions.

These smaller, short-term accomplishments which show investors that you can execute and that you are clearly not 'hapless' will massively improve your chances of getting them to invest in you.


Breakthrough Business Idea Generator


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I want to tell you about a technique I picked up, that I can directly attribute to millions of dollars of revenues that I have generated over the years. But, even so, I'm far from mastering it.

The technique is a brainstorming technique called Assumption Reversal. It is incredibly powerful. It's the technique that has been responsible for, among many others, the ATM machine and Henry Ford's development of an assembly line which revolutionized manufacturing.

The Assumption Reversal brainstorming technique allows you to look at things differently and triggers new, creative ideas. It can be used to develop new business ideas and new product ideas, and for you to overcome virtually any challenge you face, from marketing obstacles to staffing difficulties and more.

I have put together a brief video that walks you through the four steps of the Assumption Reversal brainstorming technique and gives you a real-world example. I think you'll get much more from the video than just reading about it.

Mastering this technique could revolutionize you and your business. Check out the video below:


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