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Written by Dave Lavinsky on Thursday, September 17, 2009
The other day I was given a badly-needed, private webinar by John Moccia, Technology & Venture Capital Practice Leader at Rollins Insurance, which is a member of TechAssure.
John has been working with venture capital firms and emerging ventures for many years to make sure they are properly protected. And he was gracious enough to give me a private presentation (which we recorded as a video) regarding the insurance needs at the four key stages of an emerging company's lifecycle:
Stage 1 - Formation/R&D
Stage 2 - Growth Phase
Stage 3 - Mature Company/IPO
Stage 4 - Public/Fully Developed Company
I think all of you will find tons of value in this presentation, particularly as it relates to Stage 1 and Stage 2, where most of you currently are.
John went through each of the key types of insurance that entrepreneurs need during these phases. He discussed numerous types of insurance that you must be aware of, including:
• General Liability
• Property Coverage
• Business Interruption Coverage
• Workers Compensation & Disability
• Errors & Omissions
• Directors and Officers Liability
• Crime Coverage
• Global Companion Policy
• Employee Benefits including medical, dental, 401k, life and disability coverages
• Key Man Life Insurance
Importantly, John not only talked about what each of these insurance policies are, but he explained when you need them and when you don't, and gave great tips regarding finding the right insurance policies for your company (and what to look out for).
Now, I'll be the first to admit that buying insurance for your company is not the most important part of being an entrepreneur. But getting the right insurance is part of being a sophisticated entrepreneur.
And in fact, several types of insurance are required when reaching key milestones such as getting your first office, raising capital, and expanding geographically. So, it's important to understand the key insurance issues and plan accordingly.
You can watch the video below:
If you need to contact John or Rollins, his contact information is on the last slide of the video.
Written by Dave Lavinsky on Tuesday, September 15, 2009
The other day I had the pleasure of interviewing someone who I really admire - Dr. Basil Peters.
What I really like about Basil is that he's had success in so many positions. As an entrepreneur, he co-founded Nexus Engineering, which he grew to over 300 employees and sold to Scientific Atlanta.
He's also had success as a venture capitalist as CEO of the venture capital fund, BC Advantage Funds. And he is a successful angel investor, and co-founder and CEO of an angel fund called Fundamental Technologies II.
Basil also writes a blog on best practices for angel investors and entrepreneurs at www.AngelBlog.net and he is an Entrepreneur in Residence at Simon Fraser University where he spent 15 years as an Adjunct Professor of Engineering Sciences.
And finally, Basil is the author of a great book on exit strategies called Early Exits: Exit Strategies for Entrepreneurs and Angel Investors.
So, with this wealth of experience, I knew that I would learn a ton from the interview, and more importantly, be able to pass on several nuggets of wisdom to other entrepreneurs.
And he delivered.
In fact, Basil made one statement during the interview that I've thought about nearly every day since we spoke. Here's what he said:
"...So I've come to believe that it's a law. I believe that successful entrepreneurs have mentors, and I also believe that it's the most controllable success factor - it's the single thing entrepreneurs can do that would dramatically improve their chances of success that they can control."
An entrepreneur's most controllable success factor. Those are pretty strong and pretty wise words. Let's think about this. From the perspective of a proven entrepreneur and investor, having a mentor is one of the smartest thing an entrepreneur can do to improve their chances of success.
And Basil told me that virtually every successful entrepreneur that he has met has had either a formal or informal mentor.
So, why wouldn't every entrepreneur have a mentor?
Let's start with me. I don't have a formal person that I call my mentor and who considers me their mentee. But I have had several informal mentors. An uncle who's a successful business man. Mega successful Growthink clients (I define "mega successful" as having exited companies for $100 million or more) who I've worked very closely with for years. And professors who have taught me and answered my numerous questions over time.
Now for those of you entrepreneurs who do not have mentors, I'm going to give you a hard time....Let's go over some excuses you might have:
Unfortunately, none of these excuses are valid.
Finding a mentor shouldn't take all that much time, and this time will possibly have the greatest ROI of all your time investments.
Regarding fear of getting rejected, you'll simply have to overcome this. The fact is that you probably will get rejected by some potential mentors. That's ok. But you can't be afraid to ask. And to persevere until you find a great mentor.
Like everything else in entrepreneurship, rarely does your first effort work as planned. You need to persevere and keep trying.
Now finally, with regards to not knowing who to ask, I believe that any business person who has achieved success and who you respect and admire can make a great mentor.
Wow, 500 words so far, and I've only touched on one of Basil's great points. To get many other great insights from Dr. Basil Peters, listen to the interview.
Click below to hear excerpts from the interview:
To download the full interview and/or transcript click here.
Written by Dave Lavinsky on Thursday, September 10, 2009
As a reader of my blog, I'm sure you're aware of my "Definitive Guide to Creative & Alternative Financing Sources." The Guide presents 28 unique ways to raise money to start or grow your business.
I knew the Guide was really good (since it took me so long to create and since buyers have continually praised it), but I didn't know just how impactful it would be.
Well, a month ago, CNN found out about the Guide, and a CNN Money Reporter contacted me.
What resulted was a full story on ONE of my creative and alternative financing sources: customer financing.
You can read the article here: http://money.cnn.com/2009/09/08/smallbusiness/barnraising_a_business.fsb/
What I liked most about the article is that Helaine (the reporter) gave numerous examples of customer financings. This will hopefully give you more ideas on how customer financing might be right for your business.
If customer financing is not right for you, or if you want to tap 27 more unique and proven alternative and creative financing sources, download Growthink's "Definitive Guide to Creative & Alternative Financing Sources."
Written by Dave Lavinsky on Friday, September 4, 2009
I recently had the opportunity to interview Jack Burkman, the founder and president of Burkman Associates LLC.
You may have heard of Burkman since he appears frequently on ABC, CNBC, MSNBC, ESPN, and many other networks. He was also a former FOX News political analyst.
Jack Burkman has been raising capital for companies using an extremely rare technique - government lobbying.
According to Burkman, money for many types of companies can be raised from congress and government agencies (e.g., Department of Energy, Department of Homeland Security, etc.).
Written by Dave Lavinsky on Wednesday, September 2, 2009
I recently had the opportunity to speak with expert entrepreneur and founder/CEO of Lending Club, Renaud Laplanche.
Written by Dave Lavinsky on Wednesday, September 2, 2009
If you are managing an early stage or growing company, it typically means that you are cash restrained.
And, as a result, you are often unable to pay employees salaries commensurate with what they would earn at larger organizations.
So, how do you manage this and hire and retain the best staff?
In order to do this, you need to understand and manage the four core factors that effect an employee's satisfaction and thus willingness to join your company and/or stay with you.
The first key factor is financial compensation, which includes the employee's salary plus benefits such as healthcare, and any significant perks. For the most part, early stage companies can't compete with larger entities when it comes to these salaries.
However, with stock options and/or profit sharing, smaller companies can better motivate employees and give them the potential to earn even more money then their large organization counterparts should the company succeed.
The second key factor effecting employee satisfaction is lifestyle. Specifically, how does your organization accommodate the employee's lifestyle? Do you offer daycare? Flexible schedules? For some employees, the ability of the employer to accommodate their lifestyle is of critical importance.
The third key factor that employees consider when assessing whether to stay with a company is how much they enjoy their jobs and coming to work every day. Clearly there are millions of workers that hate their jobs. But, for the most part, these aren't the best workers. If they were, they would have lots of other job opportunities.
It is up to the small business owner to create an environment whereby employees enjoy their work. They must enjoy working with the other members of the company, the types of work they are doing, and their work conditions. They must feel that they are a part of the overall company culture. They must get along with their co-workers, and feel their boss appreciates them and treats all employees equally and fairly. And they must receive adequate communications as to company policies and decision-making.
The final factor with regards to satisfying your employees is to ensure that they are learning and developing skills that will further their careers, whether or not their futures lie with your organization or with another organization (preferably they see advancement opportunities within your organization).
Employees need to be continuously trained and have the ability to continually learn so that they become more valuable assets. This training can be formal, and/or it can include learning from trying new tasks and projects.
It is up to the business owner to ensure that employees are given training and projects that expand and improve their skills.
As an entrepreneur and/or business owner, it is your duty to hire and retain the best staff. Since, no one person has the ability to grow a massive empire with the help of others. In building your teams, consider and constantly revisit these four key factors and make sure you create and foster and environment that gives your firm a competitive advantage in each of these areas. In doing so, you will maximize your chances of building a truly superstar company.
Written by Dave Lavinsky on Wednesday, September 2, 2009
I read a very interesting blog post the other day about "survivor bias," an important statistical principle that could greatly affect your future success.
In brief, survivor bias occurs when an analysis excludes information since that information no longer exists.
Let me give you an example...
The English forces, during World War II, sent planes each day to bomb the Germans. As you might expect, several of these planes were shot down. And, the ones that did come back typically returned with multiple bullet holes.
Now, the English obviously wanted to maximize the chances of its planes and soldiers returning home. So English engineers studied the planes that returned. In doing so, they found patterns among the bullet holes. Specifically they found lots of holes on the wings and tail of the plan, but few in the cockpit or fuel tanks.
As a result, the English added armored plating to the wings and tail.
As you might have already concluded, this was the wrong thing to do. The better decision would have been to add armored plating to the cockpit and fuel tanks. For, the planes that were shot in those places were the planes that were shot down and never returned.
The English engineers' analysis missed this data because these were the planes that they were unable to examine. This is "survivor bias"-- their inability to include this critical data in their analysis since it was unavailable or didn't "survive."
So why does this matter to you?
It matters because as you start and/or grow your businesses, you will have to hire service providers and staff. And naturally, you will want to hire those with a track record of success.
But, when you hire staff who have only worked at successful companies, you may fall victim to survivor bias. That is, they have not learned many of the lessons that individuals and companies learn when they fail.
Likewise, when you hire a service provider that claims that every one of their clients has been successful, maybe they haven't learned from client failures.
They say that you learn more from failure than from success.
While that can be debated, from personal experience I can say that I've learned a ton from both failure and success. From successes, I have learned principles and formulas that worked. The ones I strive to replicate on a daily basis.
And from failures, I have learned things to avoid. I have learned flaws in my thinking. But importantly, many of my successes have come out of failure. From tinkering ideas and plans that weren't quite working. And making them work. And, these new ideas would never have come to me had I not failed first.
Now, clearly my advice is not to hire failures or those with a habit of failure. But, likewise, it's not to hire staff or service providers who claim to always succeed. Since a balance between success and failure often provides that winning combination of wisdom.
So, the next time you are interviewing a key hire or service provider, make sure to ask about their failures. Ask about tasks and jobs that they or their companies failed at. And find out what they learned from that failure.
Ideally they are the types of candidates that learned a lot from their failures and were able to overcome them. This is because the vast majority of growing companies fail at things over and over again. It is their ability to constantly modify and improve their businesses that enables them to excel. Surround yourself with people that have this ability.
Written by Dave Lavinsky on Wednesday, August 26, 2009
According to the book "How To Be Like Mike: Life Lessons About Basketball's Best," Jordan's practice habits and conditioning regimen amounted to an "almost alarming harshness."
In fact, many experts, such as Florida State University professor K. Anders Ericsson, argue that practice continually trumps talent. Prominent examples of success attributed to continuous practice besides Jordan include:
These same practicing principles apply when you are selling your company and your products/services to investors, customers, partners and/or employees.
With regards to your elevator pitch, which is often your opening communications with all outside constituents, practice it over and over again until it flows from your mouth and causes prospects to nod in agreement and understanding each and every time.
With regards to your investor presentations, you should practice them over and over again. And when you practice them, you should think about the goals of your presentation and simulate the questions you might be asked.
For example, you should be thinking:
By practicing your presentation over and over, you will get better and better at it. Just hearing yourself saying the words out loud will help. You will hear what sounds good and what doesn't.
Likewise, you should practice your presentation on real people -- your advisors, friends or family members. And after these mock presentations, ask them to recite back to you the key points you made. Importantly, make sure they recall the key points that you want to convey. If not, continue to improve your presentation content and your delivery until it reaches perfection.
Written by Dave Lavinsky on Tuesday, August 18, 2009
I attended a great online marketing conference a few months ago and learned a lot about marketing your business via Twitter.
The key Twitter advice that was given was to treat Twitter interactions just as if they were offline in the "real world." That is, act just like you'd act as if you were meeting at a cocktail party.
For example, at a cocktail party you wouldn't go up to someone and start screaming "this is what I do" and "buy my product now." (A lot of people do this on Twitter.)
Rather, you would get to know the person, ask them some questions, and hopefully provide some valuable information and advice. This process builds rapport, shows them that you care about them, and positions them to reciprocate in the form of wanting to learn more about and support your business.
So, how does this relate to pitching investors?
Well, I recently read an interesting blog post by Nic Brisbourne, a venture capitalist based on the UK. The key message of Brisbourne's post was that entrepreneurs should pitch him as if they were pitching their best friend.
In doing so, entrepreneurs should:
Like in your Twitter conversations, it's not all about you. You need to listen to the needs of your investor audience before you pitch them. You must develop rapport. And you can't pitch, pitch, pitch. You need to slow down and deliver your pitch in a more integrated fashion (such as giving some information, allowing the investor to ask questions, and responding as appropriate).
So, before you speak with your next prospective investor, you should create a checklist in your mind. Make sure you understand the needs of the investor, make sure you ask questions and do a lot of listening, and make sure that you effectively convey your message without being overbearing.
Written by Dave Lavinsky on Tuesday, August 11, 2009
I came across a very interesting advertisement in my Sunday paper the other day.
Start learning now to start, finance, grow, and exit your company.
2) Have a monthly income of $5,000.00
Start a business. Work hard. Make it successful. $5,000/month is nothing if you have a successful business.
3) Win enough money to never have to work again
Build a successful company. Sell it.
4) See my kids do really well in their studies
Work hard in starting and growing your successful company. Because you are the boss, you can spend more time with your kids helping them. Your hard work will also provide the funds to hire a tutor as needed.
5) Be on TV
Once you've started that successful company I've mentioned a couple of times- hire a good PR firm.
6) Attract men/women
Working hard and being successful will give you the confidence to better attract members of the opposite sex.
In fact, the majority of things on this "wish" list...