Growthink Blog

Analysis Paralysis


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Does anyone do "early-stage investing" anymore? When we present deals to "early-stage" investors, we find their criteria to be more in line with the milestones of more established companies, and it sometimes seems like early stage is a non-entity.

I was encouraged by the news of Battelle Ventures and Allied Minds Inc., posted in The Deal here. The author mentions how both firms operate under unique structures which allow them to do true early stage investing in "pre-seed" technologies sourced straight out of research institutions and universities. Battelle only has one LP, the Battelle Memorial Institute, while Allied Minds raises money from shareholders in exchange for future equity with no specified time horizon. Perhaps these "special" circumstances allow them to take on more "risky" investments without having to answer to large numbers of LP's.

It makes me wonder if the traditional VC model actually works. What if traditional VC's could take the handcuffs off and get dirty with raw technologies and mad-scientists out of some futuristic research lab? What sort of companies would we start to see hit the marketplace and how frequent? What about timing issues and market relevancy?

"The greater the level of involvement and business expertise focused on early stage innovation, the more and higher quality of innovation we will see coming out in the marketplace" - Lesa Mitchell- VP for advancing innovation, Kauffman Foundation.

Amen.


7 Keys to Startup Success


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In 1995, Paul Graham co-developed the web-based application, Viaweb, which was subsequently acquired by Yahoo in 1998. Later, in 2002, he conceived a spam filter that inspired most current filters. Paul is currently a partner at Y Combinator, a venture firm that specializes in funding early stage startups.

In a recent article that Graham wrote entitled "The Hardest Lessons for Startups to Learn," Graham offers many insights and lessons that virtually all entrepreneurs can use.


The Business Of Ideas


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The best entrepreneurs and executives at fast-growing companies have the ability to move efficiently and profitably from ideation to execution, and then from execution back to ideation and then back to re-focused execution. And they do so regarding all aspects of their businesses -- marketing and sales, operations and finance.


Raising Capital - How Long Does it Take?


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Most entrepreneurs and managers of companies seeking outside capital vastly underestimate how long it will take them to successfully complete a financing. Here's the reality check: in our experience, we've seen that, on average, a company and a management team seeking financing should budget between 500 and 1000 work-hours to the capital-raising process, spread out over a 6 month time period.


Read the full article here.


Top Seven Capital-Raising Mistakes


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In my experience of working with many managers and entrepreneurs that have had great success in raising capital for their businesses, as well as our experience of working with as many that have struggled, here are some of the key mistakes I see most typically made:

Great Q and A on Guy Kawasaki's blog re legal issues and new startups


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Can be read here at - http://blog.guykawasaki.com/2007/10/ten-questions-1.html - all aspiring entrepreneurs should take in this advice - in general Guy's blog is one of the best (if not the best) out there re venture capital, entrepreneurship, and technology.


Data versus Intelligence in Your Business Plan


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A business plan, in its essence, is the process of mapping out with as much accuracy as possible, what the future of an enterprise or business initiative will be. To forecast effectively, the business plan strategist must intelligently evaluate and synthesize available industry and market data into a plan of action supporting credible market and financial projections. To do so effectively, it is paramount to efficiently differentiate between business data and business intelligence.


Your Business Plan: Are You Taking Enough Risk?


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When working with our clients to develop their business plans, we often reach a place where a fear arises that can best be illustrated by the moment where entrepreneurs asking the question, "What if this doesn't work?"

 

Entrepreneurship and business planning, by their natures, inherently contain the very real possibility, and often probability, of goals not being attained -- and of the corresponding losses of time, money, reputation, and often the concurrent growth of self doubt.

 


The "Flywheel" Value of a Business


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Entrepreneurs and managers of startup companies and small business often under-value the "root" value of their enterprises. Similar to how a car, if it simply runs no matter how poor its condition, has a baseline value, so does a business.

 


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