Growthink Blog

Capital Raising Bootcamp - Registration Now OPEN


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I’m excited to announce that today is the first day of registration for the Capital Raising Bootcamp!

To register your spot, go here.

And here are a couple of important updates about the Bootcamp.  

Update #1: I realize it’s the middle of summer, and many of you have probably planned vacations – or may even be on vacation right now (lucky you!).  To account for this, I’ve decided to provide recordings and transcripts as an added bonus when you register, in case you have to miss all or part of one of the sessions.  

Update #2:  I’ve decided to add an extra day to the Capital Raising Bootcamp curriculum, to allow for questions-and-answer time.  I’m going to dedicate this 4th day (Friday August 7th) entirely to Live Q&A.  

So, now, the finalized Capital Raising Bootcamp curriculum/schedule is as follows:

Day 1: Tuesday, August 4th:  Essential Overview of Raising Capital
Day 2: Wednesday, August 5th:  Venture Capital and Angel Funding
Day 3: Thursday, August 6th:  Debt, Grants, and Creative/Alternative Financing
Day 4: Friday, August 7th: Questions and Answers

(Each session runs from 2:00pm EST to 3:30pm EST).

Remember: There are only 50 spots available.  

We are putting a strict limit on registration in order to make the experience as valuable as possible for each participant – and, most importantly, to allow enough time for each person to have his or her questions answered during the Q&A time.  

To register go here.





Creative Business Finance: The Story of the Chihuahua & The $1.5 Billion Man


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I'd like to tell you brief story about a Chihuahua who was taken along on a safari vacation. The story is important as it probably holds the answer to your capital-raising needs.

On the first day of the Chihuahua's trip, the Chihuahua wandered off too far and got lost in a bush. Unfortunately, within minutes, the Chihuahua encountered a very hungry looking leopard.

Realizing he was in trouble, but, noticing some fresh bones on the ground, the Chihuahua started to chew on them, with his back to the leopard. As the leopard was about to leap, the Chihuahua smacked his lips and exclaimed loudly, "Boy, that was one delicious leopard. I wonder if there are any more around here."

The leopard stopped mid-stride, and slinked away into the trees.

"Phew," said the leopard, "that was close - that evil little dog nearly had me."

A monkey nearby saw everything and thought he'd win a favor by setting the leopard straight.

(Fortunately, the Chihuahua saw the monkey go after the leopard, and guessed he might be up to no good.)

When the leopard heard the monkey's story, he felt angry at being made a fool, and offered the monkey a ride back to see him get revenge.

As the leopard and monkey approached, the Chihuahua once again turned his back and pretended not to notice them. And when the pair got within earshot, the Chihuahua said aloud, "Now where's that monkey gone? I sent him ages ago to bring me another leopard..."

The moral of the story is that the Chihuahua survived because he was creative, and because, the second time, he planned ahead.

The same is true when it comes to financing your business. While most entrepreneurs are extremely creative when it comes to coming up with unique business ideas and marketing plans, they tend lack creativity in the area where they need it most - fundraising.

Remember, without adequate capital, even the best business and marketing ideas will fail.

Fortunately, I am just about to release Growthink's "Definitive Guide to Creative & Alternative Financing Sources."  The report gives you a detailed overview of the twelve most common types of capital used to start and grow business. And then, it provides twenty-eight (28) creative and alternative sources of financing that resourceful entrepreneurs have used to more easily finance their businesses.

One of the stories in the Guide is one of my favorites...the one about Kenneth Cole. Well before global retail sales of Kenneth Cole products reached $1.5 Billion last year, Kenneth Cole was a struggling entrepreneur with no money.

But he believed in himself and his designs, and used his creativity not only on his products and his marketing, but on his financing plan. Cole's plan was this - to find a struggling shoe manufacturer in need of customers (because the economy was weak then like it is right now) to manufacture his shoes on consignment. That is, Cole would only have to pay for the shoes AFTER he sold them.

Well, Cole was able to easily find the manufacturer who financed his business buy giving him hundreds of thousands of dollars of shoes. The rest, as they say, is history.

If you are seeking financing for your business, and you have not devised a creative plan to raise capital, I urge you to learn these great, creative financing ideas and use them to raise money for your business.

I will be releasing this report later this week. But I prefer it if you start right now. Take out a sheet of paper and write down your creative ideas to raise capital. Then, later this week, I'll give you 28 more ideas so you can complete your list, figure out which sources you are most comfortable raising money from, and begin financing and really growing your business.

Creative Business Financing Techniques - Donations


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One neat thing about helping entrepreneurs fund their businesses is that whenever someone comes up with a cool way to finance their business, I end up hearing about it.

Whether they email me directly, or someone else finds out and lets me know, it always ends up in my inbox. Which is a good thing.

For years, I’ve been keeping track of these emails and stories and have decided to put together a report. The report, which will be called Growthink’s “Definitive Guide to Creative & Alternative Financing Sources” will detail tons of ways to finance your business that you probably don’t know about or haven’t considered.

One such creative financing technique is using donations. Months ago I received an email about a horoscope website, Birdielawson.com, which solicited donations from its visitors. The site has generated thousands of dollars in funding from these donations. And it’s using these donations to grow further.

Another great example of donation financing is FeedDigest. FeedDigest was founded by entrepreneur Peter Cooper in 2004. At that time, Cooper added a PayPal button to his website and asked users of his website to donate money.

His visitors subsequently donated enough money to allow him to start really growing the company. Soon after, an angel investor wrote him a check for even more money. FeedDigest grew and grew based on those investments, and in August 2007 was acquired by Informer Technologies, Inc.

And finally, perhaps the most famous recent example of donation financing is Wikipedia which has raised several million dollars in donations to date.

So, if you have a website (if not, you should create one), one source of capital that you should consider is donations. Soliciting and accepting donations is as simple as creating a PayPal account and adding a PayPal button to your website.

Alternative Business Financing: 40 Tactics to Employ


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Did you know that when I started Growthink ten years ago, I knew very little about raising capital?

Sure, I knew a lot about raising venture capital, but I didn’t know much about financing sources like angel capital or SBA loans. And I knew virtually nothing about creative and alternative financing sources. In fact, since starting Growthink, I have uncovered 40 tried-and-true ways that entrepreneurs can fund their businesses. Most of these ways I had never heard of before. But they work.

Now I’d like to share them with you.

In a few short weeks, I’ll be teaching a select group of entrepreneurs all about these 40 financing sources in a unique multi-part teleclass.

Why is it important to know all of these options for raising capital? You might be thinking “But I just need a loan right now,” or “I’m just looking for angel capital,” or “I know that venture capital is right for me.”  

Knowing these 40 options provides you with the flexibility you need to raise capital from multiple sources NOW. it also gives you the ability to raise various rounds of capital in the future.

The truth is, most successful businesses utilize at least 3 types of capital, and usually a combination of debt and equity, as well as “creative” or alternative financing.  If you’re only using 1 type of capital, but your competitors have access to several types of capital, you’re at an automatic disadvantage. 

More importantly, not knowing about these 40 financing sources, and going after the WRONG sources of capital, is the #1 reason why most entrepreneurs enter the “death spiral.”

What is the “death spiral”? Well, the death spiral is the unfortunate process that typically occurs when an entrepreneur has a great idea and needs money to execute on it.

The death spiral has four parts:

1. The entrepreneur learns a little bit about how to raise money.
2. The entrepreneur gives a whole or half-baked effort to raise money.
3. The entrepreneur fails to raise capital (in fact, they fall flat on their face) because they don’t fully know what they’re doing and/or go after the wrong funding sources.
4. The entrepreneur’s dreams die and they return to their 9 to 5 job.

If you want to avoid the death spiral, and raise funding for your business, I will teach you how to do it. As mentioned, later this month, I will be offering a unique multi-part teleclass that teaches entrepreneurs like you how to really raise capital.

ARC Stabilization Loans - 35,000 More Reasons the US Government Rocks


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The next time you get frustrated that the taxes you pay to the U.S. government are so high, realize that the government gives a lot of this money back to entrepreneurs. And one of these entrepreneurs can be you!

In fact, last year, the U.S. government provided funding to 69,434 companies through its Small Business Administration (SBA) lending program. And last month, the SBA stepped up its efforts even further to help entrepreneurs and small business owners.

Specifically, last month, the SBA created a new type of loan called the "America's Recovery Capital" loan, or "ARC."  This loan is specifically designed to help existing businesses who are currently experiencing distress due to the economy.

What's great about ARC loans is that they are deferred loans.  The funds are dispersed to you over a period of up to 6 months, but you are not required to make any payments until 12 months have elapsed since you were funded.  Payback terms are up to five years.

The maximum loan principal is $35,000.  And there are no fees to the borrower. And the government guarantees 100% of the loan to the SBA partner bank. Finally, the interest rates are extremely reasonably; only prime plus 2%.

To learn more about and how to get an ARC, SBA or other bank loan to fund your existing or startup business, instantly download our new report entitled "Growthink's Step-by-Step Guide to Raising Capital from Banks & SBA Lenders" here: http://www.growthink.com/products/loanguide


One Really Big Organization that Wants You to Succeed


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If you own an existing business, or are planning to start one, there is one organization who really wants you to succeed.

In fact, this organization is even willing to loan you money to start or expand your business. And they will give you this money with favorable interest rates and payback terms.

That organization is the United States government.

The U.S. government has learned over time that giving capital to entrepreneurs creates more jobs, improves the economy, and expands the tax base. All the things they really want to achieve.

Many years ago the U.S. government set up the Small Business Administration (SBA) specifically to make loans to entrepreneurs and small business owners. In fact, the SBA currently has $45 billion in loans outstanding to entrepreneurs.

And, in addition to SBA loans, there are several kinds of debt capital that may be available to start or grow your business such as business lines of credit and traditional bank loans.

Each of these types of capital are covered in detail, including a step by step plan for getting these loans for your business, in our new report entitled "Growthink's Step-by-Step Guide to Raising Capital from Banks & SBA Lenders."

Among other things, the report covers:

* The differences between raising debt capital and equity capital that you need to understand (Page 2)

* The important elements of loans and what you need to know BEFORE you look for one (Page 7)

* Exactly what lenders are looking for when they consider whether or not to fund your business (Page 9)

* The biggest misconception about loans that keeps many entrepreneurs from getting funded (Page 11)

* One easy, but seldom used trick to maximize your chances of getting a loan on the best possible terms (Page 12)

* The key types of loans and what you need to know to make sure you get one that's right for your business (Page 13)

* The best way for startups to overcome a key SBA requirement and quickly get the perfect SBA loan (Page 19)

* Assessment of every type of SBA loan to allow you to quickly determine the optimum one for your business (Pages 19 to 24)

* The hands-down fastest way to get an SBA loan (Page 29)

* Growthink's proven 6-step formula for getting an SBA or bank loan (Pages 32 to 36)

* The 30 U.S. banks that are most likely to loan money to your business (Page 37)

 

To learn more, click here.


Why You Should DOUBLE Your Employees' Salaries


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In a world with a poor economy and uncertain economic outlook, the knee-jerk reaction of most entrepreneurs and business managers is to layoff employees and thus reduce labor costs.

While I agree that reducing labor costs is key, you can oftentimes do this by increasing the amount you pay your employees.

Take the case of The Container Store. This Texas-based company has a unique HR strategy. That is, they have just one employee for every three that their competitors have. But, they pay their employees double the industry average and spend 160 hours training them.

The result is that their employees are better trained and happier, and thus provide superior service at a 33% overall lower cost than competitors.

Interestingly, when The Container Store opened in New York City, it had 100 times more applications than available positions. With numbers like that, they are able to hire the best of the best each time.

Similarly, Harry Seifert, CEO of Winter Garden Salads gives employees bonuses just before Memorial Day, when demand for its products peak. The bonuses boost morale and cause the company's productivity to jump 50% during the busy period.

Paying employees more to improve performance and boost company-wide profits is a historically proven tactic. In fact, back in 1913, Henry Ford doubled employee wages from $2.50 to $5.00 per day. The move boosted employee morale and productivity and caused thousands of potential new workers to move to Detroit.

A final key point to note is that laying off employees is often a bad strategy. While it will save you money in the short-term, in the long-term, hiring new employees and training them is much more expensive than the cost of keeping the employees that you laid off.

Rather, a strategy that you should consider is to ask (or require) employees to take pay cuts and/or offer employees company stock in lieu of a portion of their cash compensation.

A Venture Capitalist, A Corporate Investor & Two Angels - Animoto is Listening


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When entrepreneurs ask me what sources of capital to tap to fund their businesses, my answer is generally "as many as you can."

I often point to companies like Google, who relied on credit cards, angels and venture capitalists in its early days.

Recently Animoto heeded my advice. In it's most recent round of funding, Animoto raised $4.4 million from a venture capitalist (Madrona Venture Group), a corporate/strategic investor (Amazon.com), and two angel investors: iStockphoto founder Bruce Livingstone and angel investor Jeff Clavier (Clavier is also the founder and managing partner of SoftTech VC, a seed-stage venture capital firm).

What's even more interesting is what Animoto is. Animoto is a website where you can quickly and easily turn photos into videos. Why is this interesting? Because you can use Animoto to create a video about your company to market it to investors.

So not only is Animoto teaching each of us about how to best raise capital to fund our growth, but is offering a tool to help us market ourselves to investors.

To see how it worked, I created an Animoto account (doesn't cost anything and is quick to do) and created a quick video. I was home at the time with my daughter, so we did it together and created one with a few of her recent horseback riding pictures.

The good news is that it was really simple to create the video. The negatives were that 1) rendering time was slow (plan to wait at least 5 minutes before the video is ready to be viewed for a 30-second clip), and 2) the non-paid version only allows your video to last 30 seconds. Fortunately for $3 per video, or $30 for a year, you can create full-length videos.

Overall, Animoto is a great lesson in capital raising and a great tool to use when raising capital for your business!

Investor Presentation: The Overlooked Key to Raising Capital & Succeeding In Business


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Over the past decade, I have written countless articles on how to raise capital. I have taught thousands of entrepreneurs how to create a great business plan, how to develop a strong financial model, and ways to devise a slide presentation that gets investors excited.

And then, I have written extensively about how to grow your company once you have raised capital. Discussing how to motivate your employees to maximize their effectiveness. And how to find partners that can take your business to the next level.

But there's one thing I haven't written about. One thing that I've totally neglected. And this one thing can increase your effectiveness at ALL of these activities - from raising capital to performing all the tasks needed to grow your successful business.

For this I apologize.

So what is this one thing?

The answer is public speaking, and your ability to communicate ideas to investors, partners, employees and others.

I realized that public speaking was the missing key when I recently reviewed a unique book called "The Power Presenter" by Jerry Weissman.

And, I might not have read the book if it had not received so much praise from venture capitalists. These VCs have relied on Weissman to prepare them to not only raise money for their own funds, but to teach their portfolio company CEOs so they could raise future funding and better grow their companies.

So, why are Weissman's teachings so important? Because, your ability to present effectively and be a great public speaker is critical to your ability to raise money for your business, attract and formalize relationships with key partners, and build a highly motivated team among other things.

And importantly, Weissman's research proves that the content of your presentations is less important than your body language (most important factor) and your voice (next most important factor).

Allow that to sink in for a minute.

What this means is that when you meet with a venture capitalist, angel investor or bank loan officer, your presentation skills are more important than the content of your presentation!

This fact is a bit bothersome to me.

Why? Because it means that an entrepreneur who has great public speaking skills but a poor investor presentation and business model has a superior chance of raising capital than an entrepreneur with a great investor presentation and business but poor communications skills.

But, rather than me pouting about this seemingly unfair reality, let me tell you some of Weissman's keys to making you a better public speaker and presenter.

First of all, to reiterate, the most important thing influencing your audience is visual (i.e., your body language), then vocal (your voice and speaking rhythm) and then verbal (the story you tell).

Secondly, when you present in front of a group, your natural "fight or flight" instincts kick in. Your adrenaline starts pumping and you often get anxious and fidgety. The way that you act as a result of this poorly impacts your audience's perception of you.

To decrease your anxiety, use the following techniques:

1. Practice, practice and practice some more. The more you practice your presentation, the more comfortable you will be when you give it.

2. Concentrate. Just like an elite athlete, you need to clear your mind before the presentation so  you can fully concentrate on the task at hand.

Important side note: many years ago, I had the pleasure of introducing entrepreneur and author Harvey McKay at an event. Before he went on, I saw him with his head against the wall talking to himself. I thought it was absolutely bizarre. But he used that technique to focus his mind and pump himself up. The result - he had the audience in the palm of his hand the whole time. It was truly amazing.

3. Shift Your Focus from You to Them. If you give a presentation and your best friend happens to be in the room, chances are that after the presentation the first question you will ask your friend is "How did I do?"

It is this mentality of thinking about yourself that makes people nervous. Rather, focus on the audience. Look at them and think "how are they doing?"  This will allow you to present more effectively.

4. Focus on specific people in the audience. Whether there are three prospective investors or business partners in the room, or you are speaking to a room of 50 or 500, you need to visually focus on one person at a time. That is, pick one person to start and complete your first main point. Then you should shift to different people for each key point you make during the presentation. This helps you concentrate better and make sure you are focusing on the audience rather than on yourself.

5. Practice your hand gestures. Hand gestures often positively engage an audience. But, making hand gestures in front of an audience often feels awkward and uncomfortable. You must practice using them with "warmer" audiences (e.g., your friends, co-workers and/or employees) until they become second nature.


Like it or not, your public speaking ability and presentation skills are more important than the content of your presentations. As such, successful entrepreneurs need to master these skills. Use these tips to improve your skills, and remember to really practice all your presentations before the actual event. As you know, in most cases, you only get one shot at key presentations.


How to Make Your Ideas That Much Better


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Every day I hear pitches from entrepreneurs about the great new product or company they are launching (or want to launch).

But unfortunately, more often than not, their ideas aren't that exciting.

Now, if you have great access to capital and are absolutely amazing at execution, then a "regular" idea is fine. In those cases, you simply go out and raise capital, launch your company, and then out-perform your competitors.

But, entrepreneurs who can do this are few and far between.

For the rest of us, we need an edge. Something that's different. Better than what's out there.

What I'm talking about is the kind of business idea that you look at and say, "That's really cool."

Now, these types of ideas typically feed off the wants and needs of consumers. That is, the entrepreneurs who conceive them have considered the true needs of the customer and modified existing products to satisfy those needs.

Importantly, in most cases, the customer hasn't even recognized the unmet need. But when they see the product or service, they realize its advantages and buy it.

I came across a couple examples of such "cool" products recently. The first was a pair of Reef brand sandals which has a bottle opener nestled in its sole making it "a mandatory accessory for a night out with the boys."

The second is Panasonic's BF-104 flashlight which operates with any combination of D-cell, AA OR AAA batteries. How cool is that...as long as you have 3 batteries, regardless of the type of each, it works (rather than all the time we've all spent searching for that last D-cell battery).

Neither of these innovations required years in the lab. Rather, they were both the result of the entrepreneurial mind coming up with creative solutions to the needs of their customers. (Note that the fact that these two innovations came out of corporations, rather than individual entrepreneurs, is even more impressive to me).

So, how can you maximize your creativity to come up with better ideas for your business?

Recently I created this video (http://www.growthink.com/content/breakthrough-business-idea-generator) that discusses one of my favorite brainstorming techniques called Assumption Reversal.

We have been using Assumption Reversal much more internally and coming up with some really neat ideas. I encourage you to watch the video and use Assumption Reversal for your business.

Finally, not long ago, I had the honor of interviewing Michael Michalko. Michael is the author of the book Thinkertoys which is known as one of the best books on creativity of all time. In fact, I learned about Assumption Reversal from this book.

I will be releasing more of Michalko's best creativity techniques in the coming months. In the meantime, try out the Assumption Reversal technique and keep brainstorming to come up with even better ideas.


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