Growthink Blog

The Birth of a Shoe Company


Categories:

I think you'll like this story...

It was 1982, and a young man named Kenneth Cole wanted to launch a shoe company.

But, like many entrepreneurs, he had no money. He thought about going to U.S. banks and factories for capital, but feared that this was a long shot for him.

So, instead, he found a small Italian shoe production facility that had been hit hard by the 80s economy and desperately needed more clients.  The company offered Kenneth a line of credit, and they immediately started manufacturing shoes.


Lessons Learned From Vodka


Categories:

It's not very often that you hear someone say there is a lesson to be learned from vodka. However, that's exactly the case in the example I want to share today.

While alcohol is nothing new to the United States, surprisingly, vodka has only been here since Prohibition was repealed in the 1930's.

The first attempt to get vodka in the US market was by a Russian immigrant with the Smirnoff brand.


The First Thing I Learned In My Marketing Class


Categories:

I took my first marketing course nearly 20 years ago. And I absolutely loved it. I was in my third year at the University of Virginia, and my professor, Sandra Schmidt, was simply awesome.

She was one of those professors who loved what she did. She was always smiling, spoke with great emotion, and truly loved marketing and teaching. And on the very first day of class, I still remember to this day, she asked us two questions to test our knowledge.


Calvin Coolidge Was Almost Right


Categories:

For many years, I had a poster on my wall with a quote from Calvin Coolidge, the 30th American President. Coolidge believed persistence was the most important attribute you can have.

He said:

..............


An Overlooked Secret to Raising Capital


Categories:

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...

FOLLOW UP.
 
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.


Your First Idea Is Rarely Your Best


Categories:

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.


What's Your High Concept Pitch?


Categories:

Here's a great concept I originally learned from Babak Nivi, an entrepreneur and investor who also runs the website VentureHacks.com.

It's called the "High Concept Pitch," and this concept is critical to both your capital raising and marketing efforts.

So, what is a "high concept pitch"?

A high concept pitch is a single sentence that distills your company's vision. In other words, it's like a super-condensed elevator pitch.


I Don't Do Juice


Categories:

If there's one story that I don't like to tell, it's this one...

But, there's a great lesson in it, so I'll tell it anyway.

Years ago, prior to Growthink, I created a frozen smoothie product. Let me explain exactly what it was...

If you ever buy a smoothie from a juice shop, half of the product is essentially juice concentrate and frozen fruits, and the other half is simply water.


You're Invited to Attend... "Venture Capital Bootcamp"


Categories:

UPDATE: Venture Capital Bootcamp registration is now open.

Click here to register for Venture Capital Bootcamp



Next week, I'll be opening up registration for my new online training program, Venture Capital Bootcamp.

But before I do that, I wanted to give you an overview of what we'll be covering together.
 
Here's What's Included...

Venture Capital Bootcamp is a four-week interactive e-class where I'll guide you step-by-step through the process of raising venture capital, from start to finish.

The reason VC Bootcamp is a 4-week program is because there are 4 critical steps to the venture capital fundraising process.

If you're serious about raising venture capital, you need to go through each of these four steps. And if you ignore any of these steps, you will sabotage your chances of getting funded.

There's a lot to learn, but I'll be there with you every step of the way, giving you all of my best practices and proven techniques.

Here's an overview of what we'll be covering each week...

Week 1: Preparing to Raise Venture Capital

First, we'll cover Venture Capital 101 including:
* Key venture capital terminology you must know to get funded
* What you must accomplish BEFORE you can raise venture capital
* How angel investors can help you attract venture funding
* Why you should stop obsessing about giving up equity ownership
* And more...

Next, I'll explain What Venture Capitalists Really Want, including:
* The exact criteria VCs will use to judge your company
* How you must position your company in order to attract venture capital
* The 2:6:2 rule of venture capital (and how to use it to your advantage)
* And more...

Next, I'll give you my best practices for creating all of your Venture Capital
Marketing & Presentation Materials... including:
* 3 simple keys to a powerful elevator pitch
* How to construct a business plan that will impress venture capitalists
* The 3 things you must accomplish in your Executive Summary
* And more...

NOTE: Don't worry if you haven't created all of your VC materials yet.
During VC Bootcamp, I'll show you how to create them quickly and easily.

Then it's on to Week 2...

Week 2: Finding and Contacting Venture Capitalists

First, I'll show you How to Identify the Right Venture Capital Firms, including:
* Why all VCs are not created equal
* 3 techniques you must use when creating your VC list
* How to target the right individual to contact at each VC firm
* How to tell if a VC is serious about funding you (or just wasting your time)
* And more...

And then, I'll show you How to Contact Venture Capitalists, including:
* "Rookie" mistakes you must avoid when contacting venture capitalists
* The 3 surefire ways to "cut through the clutter," so you get more VC meetings
* How to use blogs and social networking websites to find and contact VCs
* What it means to "over-shop" your deal and how to avoid this like the plague
* And more...

Then it's on to Week 3...

Week 3: How to Pitch Venture Capitalists

This is the most important part of the process because no matter how many VC meetings you set up, you won't get a dime of funding unless you have a great VC pitch.

That's why we'll be focusing an entire week on your venture capital pitch.

You'll learn:
* How to make sure you're totally prepared for your VC meeting
* The 10 things you must cover in your VC pitch
* How to protect your business ideas when meeting with VCs
* What NOT to say during a VC meeting
* The best way to follow-up with VCs AFTER you meet with them
* And more...


Week 4: How to Negotiate with Venture Capitalists

By this point, you've impressed VCs, and they're interested in writing you a check. But you haven't sealed the deal yet. And if you fail to negotiate the right terms, it can mean disaster for both your company's future and your ability to "cash out"...

The deal terms are often the difference between you eventually receiving a personal check for millions (when you later sell your company or go public) or losing control of your company.

The stakes are very high - so you can't afford to screw this up!

In this final week, you'll learn:
* How to maximize your valuation (so you retain equity & control)
* What to watch out for in your venture capital "term sheet"
* How to prepare for venture capital due diligence, so it goes smoothly
* When to hire a lawyer
* How to position your company for follow-on rounds of funding
* And more...

As you can see, I've structured Venture Capital Bootcamp so that, by the end of Week 4, you will have everything you need to successfully raise venture capital.

I hope that gives you a better idea of what you'll learn during VC Bootcamp.  I'll be in touch with more details as we get ready to open the doors (next week). 

Dave

P.S. VC Bootcamp attendance will be strictly limited, because of the amount of personal attention we'll give each participant.

If you'd like to be the first to know when we open up registration, then join the Priority Notification List.


How to Pitch Venture Capitalists


Categories:

Meeting with the venture capitalist and giving them the right presentation is the MOST important part of the venture capital raising process.   

This video shows you exactly what topics you should cover during a venture capital presentation. And it also highlights mistakes to avoid when pitching VCs. 

Click here to watch the video.

And after you watch the video, be sure to download the free VC presentation template located below the video.

 

Click here to register for Venture Capital Bootcamp


Syndicate content

Most Popular
New Videos

"Business Plan
SHORT-CUT"

If you want to raise capital, then you need a professional business plan. This video shows you how to finish your business plan in 1 day.

CLICK HERE
to watch the video.

"The TRUTH About
Venture Capital"

Most entrepreneurs fail to raise venture capital because they make a really BIG mistake when approaching investors. And on the other hand, the entrepreneurs who get funding all have one thing in common. What makes the difference?

CLICK HERE
to watch the video.

"Brand NEW
Money Source?"

The Internet has created great opportunities for entrepreneurs. Most recently, a new online funding phenomenon allows you to quickly raise money to start your business.

CLICK HERE
to watch the video.

"Old-School Leadership
is DEAD"

"Barking orders" and other forms of intimidating followers to get things done just doesn't work any more. So how do you lead your company to success in the 21st century?

CLICK HERE
to watch the video.

Blog Authors

Jay Turo

Dave Lavinsky