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Looking for Opportunities Now? How to Write a Business Plan for Raising Venture Capital Top Seven Capital Raising Mistakes 20 Reasons Why You Need a Business Plan Top 10 Private Placement Memorandum (PPM) Mistakes The Secrets to Their Success? 25 Quotes From Famous Entrepreneurs The 6 Untold Reasons Why Businesses Fail 7 Entrepreneurs Whose Perseverance Will Inspire You Top 7 Myths About Starting a Business Business Exit Strategy: Planning to Sell Your Business How to Make a Business Plan Capital Raising Resource Center
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Growthink Around The Web
Written by Dave Lavinsky on Tuesday, January 5, 2010
After five years of living in our new house, my wife and I decided to buy a new clothes washer and dryer. We figured we'd upgrade to those new, ultra-efficient machines that use really little detergent, water and energy.
Written by Troy Centazzo on Tuesday, January 5, 2010
If you're even considering selling your midsize company in the next couple years, here's the bottom line: you should start the process now.
Written by Growthink on Friday, December 18, 2009
Looking for venture capital? Or looking for great insights to grow your business?
1. Ed Sim (Dawntreader Ventures)
Inspirational video for entrepreneurs
"Without a bigger sense of purpose, it is hard to be an entrepreneur and stick through the inevitable tough times that will come your way."
2. Josh Kopelman (First Round Capital)
Board Transparency - and the Implicit Web
Discusses the repurcussions of accessible data and the necessity of transparency with your Board of Directors.
3. Jeremy Liew (Lightspeed Venture Partners)
Why the Economics of Social Gaming are So Attractive to Investors
Trend to watch for in 2010: Social Gaming, this article tells you why.
4. Seth Levine (Foundry Group)
Want more jobs? Support Entrepreneurship
Levine recommends taking the steps included in his blog article to boost the economy and create jobs.
5. Chistopher Allen (Alacrity Ventures)
Community by the Numbers, Part III: Power Laws
What defines the success of a community and how can we predict this?
6. Fred Wilson (Union Square Ventures)
Some Thoughts on Email After Dealing with 500 Emails
An inside peak into VC email response.
7. Bill Gurley (Benchmark Capital)
What is Really Happening to the Venture Capital Industry
VC Bill Gurley takes readers through an overview of the ups and downs of 2009.
8. Paul Graham (Y Combinator)
Startups in 13 Sentences
If VC Paul Graham could tell startups 13 things, these would be them.
9. Dave Hornik (August Capital)
Innovation Doesn't take a Vacation in an Economic Downturn
Innovation isn't dependent upon finance.
10. Brad Feld (Foundry Group)
VC Behavior in Board Meetings
Advice on putting the phone down, and paying attention at board meetings.
11. David McClure (Founders Fund)
Startup Metrics that Matter
This vlog teaches new entreprenuers what metrics really matter in the early stages of their development.
12. Erick Schonfeld (Techcrunch)
Venture Funds Raise Only $1.6 billion in 3rd Quarter. Most of That Went to Vinod Khosla
A quarterly overview on VC funds raised from Q3 2007 - Q3 2009. $750 million of the $1.6 billion raised went to Khosla ventures.
13. MG Siegler (Techcrunch)
The Cost of FriendFeed: Roughly $50 million in Cash and Stock
A successful exit for a small social media startup; FriendFeed was purchased in August 2009 for $50 million. Highlights the payout for initial investors.
14. Steve Fredrick and Don Rainey (VentureBeat)
Venture Capital 2009: The Year in Review
Highlights included 3 venture-backed IPOs in Q3 2009, an expanding start-up world and the reduced cash required to start companies.
15. Marc Andreessen (Andreessen Horowitz)
Introducing Our New Venture Capital Firm Andreessen Horowitz
Announcing a new $300 million fund for technology startups. Investing between $50,000 and $50 million, this blog post outlines EXACTLY Andreessen Horowitz's requirements.
16. Laura Grimmer (VentureBeat)
5 Ways VC firms Can Stop Shooting Themselves in the Foot
Excellent advice for VCs looking to grow their business and expand the pipeline of deals.
17. Peter Rip (Crosslink Capital)
What's Broken - Venture Capital or Venture Perceptions?
Refutes the idea that venture capital is the worst place to be because the "old model doesn't work."
18. Rick Segal (JLA Ventures)
The "Take the Deal or Not" Debate
Questions every person should ask themselves before they take a deal with a venture capital firm.
19. Mike Hirshland (Polaris Venture Partners)
More on the Founder/CEO Question
When should the founder step aside as CEO for the greater good of the company?
20. Jeff Bussgang (Flybridge Capital Partners)
Should Entrepreneurs Be More Like Teenage Girls?
Recommendations for a growth mindset and success for reaching goals as an entrepreneur.
21. Tim Oren (Pacifica Fund)
Silicon Valley's Dirty Little Secret
What are the long term social and political impacts of Silicon Valley? Some insightful thoughts into Silicon Valley culture.
22. Eric Friedman (Union Square Ventures)
99.99% (Or It's Totally Going to Happen But Isn't Signed Yet)
Until a contract is signed - it's not a done deal.
23. Mike Speiser (SutterHill Ventures)
Better Incentives Can Improve Online Advertising
Publishers should incentivize advertisers to create good content. Brings up the idea of ad content that enhances, rather than diminishes, user experience.
24. Matt McCall (DFJ Portage Venture Partners)
Do You Need to Be in the Valley?
Addresses the age old question of whether entreprenuers in the tech space need to be in Silicon Valley to succeed.
25. Stu Phillips (Ridgelift Ventures)
Venture Capital - Time for V3.0
Stu Phillips raises an important point - VC2.0 which began with the Internet and resulting bubble - is out. A new system needs to be created.
26. Jason Caplain (Southern Capitol Ventures)
Include Sales in your Strategy
Entreprenuers need to connect with their buyers early on; sales is an integral part of EVERY company.
27. Jason Mendelson (Foundry Group)
Senator Dodd - Making it harder for small businesses to get funded
A VC outlook on the legislation changes proposed that will alter the ability for companies to get financed.
28. Nic Brisbourne (Esprit Capital Partners)
Financial Forecasts in a Business Plan
"Any business plan that has financial forecasts under year 1, year 2, etc. rather than 2009, 2010, etc. is too early stage for us." Brisbourne urges entrepreneurs to be precise in their projections and have a definitive timeline for revenue.
29. Albert Wenger (Union Square Ventures)
Hiring: Lack of Diversity Becomes Self-reinforcing
Historical hiring practices may affect the ability to bring on diverse, younger talent.
30. David B. Lerner (Totius Group, Columbia Venture Lab)
Getting from Zero to One in Your Startup: Founder Compensation Should be Slim to None
An important point for every founder to konw - your investment is on the back end - not from annual salary.
31. Larry Cheng (Fidelity Ventures)
Succeeding with a Potential Single Point of Failure
Two success stories of companies who exited in spite of single point of failure possibilities.
32. Raj Kapoor (Mayfield Fund)
Prediction: Social Nets Will Make More Money Off-site vs On-site their Websites
Interesting take on how social networks will continue to monetize.
33. Will Price (Hummer Winblad)
The importance of being present in the moment AND enjoying it.
34. Howard Morgan (First Round Capital)
UNI- Acquired Tastes in Food and Investing
Morgan talks about business plans that excite him as a potential user - not as an investor.
35. Mark Suster (GRP Partners)
How to (re)Approach People (Advice on the Eve of LeWeb)
"Business etiquette tips for dealing with VCs and Corporates at Conferences"
36. Christine Herron (First Round Capital)
What's the Secret Success of Mint.com? The Real Numbers Behind Aaron Patzer's Growth Strategy
How much does it take to get started? When should you raise money? Interview with Mint.com CEO opens up and answers these questions.
37. Fred Destin (Atlas Ventures)
The Arrogant VC: A View from the Trenches (full length version)
Destin posts the answers to "tell me why VCs are disliked by entrepreneurs"
38. Rob Day (@Ventures)
Conventional Wisdom and Cleantech Venture Capital
Day clears up what Cleantech is, and in which firms "Cleantech VCS" invest.
39. David Feinleib (Mohr Davidow Ventures)
When You Are the Product
A reminder that, regardless of the technology or device, when pitching investors you are pitching yourself.
40. Bijan Sabet (Spark Capital)
Creating an Operating Plan for 2010
Advice for any year really, on creating an operating plan that works.
41. Phillippe Botteri (Bessemer Venture Partners)
Impact of the Recession on SaaS Sales & Marketing Productivity
How has the recession affected SaaS? Not much.
42. Andrew Parker (Union Square Ventures)
How does Microsoft's Bing plan to compete? By paying customers not to compete.
43. Mark Peter Davis (DFJ Gotham Ventures)
Bootstrapping vs. Venture Funding
The pros and cons of two finance methods for startups.
44. Allen Morgan (Mayfield Fund)
Co-Founders vs. Early Employees
Quick thoughts on the differences between the co-founders and early employees.
45. James Chen (CXO Ventures)
Don't Bite the Hand that Feeds
This lesson applies to both business and government: Don't bite the hand that feeds you.
46. David Aronoff (Flybridge Capital Partners)
Why do companies fail?
47. Max Bleyleben (Kennet Partners)
The Hunt for Growth Is On
Tech success is creeping into Europe and other markets as the US emerges from recession.
48. Jason Ball (Qualcomm Ventures Europe)
Pitch your startup: VCIC 2009
2009 awards have been given, but 2010 awards are just around the corner.
49. Don Rainey (Grotech Ventures)
The 7 Troublemakers you meet in a Startup
7 personality archetypes an entrepreneur can expect to meet when starting a company.
50. Peter Haas (Founder, AIDG)
In Social Enterprise, Force Yourself to be an Entrepreneur First
Ten rules for starting an international service organization.
Written by Dave Lavinsky on Monday, December 7, 2009
Imagine for a moment that you were really great at something, but never acted on it.
How would your life, and the lives of others been impacted?
Let's take Michael Jordan. What would have happened if he never picked up a basketball? What would he be doing today? (I would bet he wouldn't be retired.) How much wealth would he and his family have lost out on?
Interestingly, a lot of people think that opportunities are lost or squandered when people are young. This is clearly not always the case.
Consider Grandma Moses. Grandma Moses loved painting as a child. But, she and her family didn't consider painting to be a real, paying job, so she spent decades earning a living doing embroidery work.
But, this all changed when Grandma Moses reached her seventies. Her arthritis worsened and she was unable to continue doing embroidery. So, Grandma Moses finally set out to do what she loved - painting.
She went to an Arts & Crafts store, purchased some supplies, and went to work. Within a few years, Grandma Moses would be creating two paintings a week. And each of these paintings would earn her more than she earned in a lifetime doing embroidery. In fact, in her eighties and nineties, she made paintings that would earn her over $300,000 each.
Now let's look at the impact of Grandma Moses' decision to start painting. Financially, she made millions. Money that would help her grandchildren get better educations, get better health coverage and live better lives. She also generated thousands in tax dollars which, among other things, would help fund essential projects. She generated jobs; she must have had assistants who helped her purchase supplies, arrange art showings, and handle her travel and financial affairs.
And then there are the millions of people that Grandma Moses touched by simply allowing them to look at her beautiful paintings.
Yes, even at an elderly age, Grandma Moses made an impact on millions of people.
But what about you and I?
The fact is that each of us have talents. And when we choose to reveal them, and nurture them, and fight to use them - essentially, when we choose to become true entrepreneurs - we positively impact many lives.
Because of this fact, I was not surprised by the Kauffman Foundation's recent study entitled "Where Will The Jobs Come From?" The study reveals clear evidence that "new and young companies and the entrepreneurs that create them are the engines of job creation and eventual economic recovery."
In fact, since 1977, net job creation in the American economy would have been negative in all but a handful of years if not for startups and young companies (defined as < 5 years of age). And even in good times, like in 2007, when 12 million new jobs were added, two-thirds of the new jobs were created by startups.
So, if you are debating starting a business, now's the time to do it. If you have an existing business and are thinking about new growth initiatives, now is the time to launch them.
Yes, now is the time. It's not just about your personal satisfaction. It's about the tens, hundreds, thousands and even millions of lives that you can positively influence with your gift of entrepreneurship. It's time to really put that gift to use.
Written by Dave Lavinsky on Tuesday, November 24, 2009
When Jay Turo and I founded Growthink a decade ago, we each had a ton of responsibilities.
To hear a short clip of the interview, click the blue triangle on the player below:
Growthink University members can download the full interview here: http://www.growthinkuniversity.com/members/376.cfm
Written by Dave Lavinsky on Saturday, November 21, 2009
This past Tuesday, Warren Buffett and Goldman Sachs announced that they were donating $500 million to assist 10,000 small businesses in the U.S.
To begin, this is pretty cool. Any money invested in small businesses is sure to lead to more jobs and an improved economy. And even better when this money is not coming from taxpayer dollars.
However, what I found most interesting was where Buffet decided to invest the $500 million. I say "Buffett" and not Goldman Sachs, since Buffett's Berkshire Hathaway Inc. is the largest shareholder in Goldman Sachs, giving me the impression that he was calling the shots on this one.
According to Bloomberg.com, the moneys will be allocated as follows: "$200 million to local community colleges, universities and other institutions to provide small-business owners with practical business education.... $300 million through a combination of lending and philanthropic support to community development financial institutions."
$200 million to "practical business education" - that's what rang out the loudest to me. As one of the greatest investors ever, Buffett knows first hand that entrepreneurs that succeed are the ones who have the right business education and training.
Successful entrepreneurs realize that they themselves are one of their organization's greatest assets. As such, they constantly invest in themselves by taking courses, reading books, and upgrading all of their key skills.
Regarding the other $300 million, it is being provided to community development financial institutions (CDFIs). CDFIs generally provide financing and related services to individuals and small businesses in struggling or underserved communities. If you have or would like to start a business in one of these communities, go to CFDI Coalition website to find a list of certified CFDIs.
Finally, speaking of practical business training, I'm unveiling a brand-new version of Growthink University this week.
Learn more, here:
Written by Growthink on Tuesday, October 27, 2009
This past Thursday, Growthink celebrated its 10 year anniversary with a reception in Los Angeles.
Thanks to all our friends, clients, and colleagues who were able to join us!
Here are some photos from the event:
Above: Jay Turo, Co-founder and CEO of Growthink
Above: Dave Lavinsky, Co-founder and President of Growthink
Left: Jay Turo; Right: Dan Hyman, Founder and CEO of XCOM Wireless
Left: Ken Jillson, Founder of Safari Air; Right: Melissa Welch of Growthink
Left-to-Right: Growthinkers Stacey Polychronis, Rocio Melgar, and Brittany Lawson
Click here to view more photos from Growthink's 10 Year Anniversary Celebration.
Written by Dave Lavinsky on Thursday, October 22, 2009
I just finished conducting an interview on how to be an entrepreneur.
Written by Dave Lavinsky on Wednesday, September 30, 2009
The conversation I had the other day started like many others I have with entrepreneurs.
"How can I help you?" I asked.
"I need money to grow my business," he said.
"So how far along is your business right now?" I replied.
Now, here is where things got a little strange.
In most cases, the entrepreneur says that they are just starting out. Or that they have been around for a year or two and have some customers and a nice revenue base.
But this entrepreneur responded, "Well, we're 7 years old and projected to do $120 million in revenue this year."
??? No, this was not the response I was expecting.
So, why does a company that's doing over $100 million in revenue need capital? To buy a competitor? To build market share since it's selling products at a loss?
While these are two valid reasons why more established companies constantly need capital, this company was actually very profitable and not looking for acquisitions.
So, why then did this company require capital?
Because it was growing too quickly and hadn't financially planned for that. You see, the company was manufacturing and selling products at a nice profit, but it needed to pay its manufacturing costs 90 to 120 days prior to when it received payment from its customers.
The result is a cash crunch.
The company has lots of outstanding orders. But it can't fulfill them since it can't lay out the cash to manufacture the goods. This is extremely frustrating for the entrepreneur, and potentially lethal (if customers decide to switch to a competitor).
Now, there are two key ways around this problem.
One, as discussed in Growthink's Definitive Guide to Creative & Alternative Financing Sources, is customer financing, whereby the customer pays for the product upfront or more quickly in return for some benefit (equity or price discounts).
The other is getting outside capital to solve the cash crunch.
The underlying issue here that you must understand is that "cash flow" is very different than "profitability."
Profitability compares your revenues to your costs.
On the other hand, cash flow determines when, where and at what times cash is coming into and cash is leaving your company. And without proper cash flow projections, a fast growing company can find itself in big trouble.
That's why it's critical that all companies, as part of their business planning process, prepare a Cash Flow Statement or forecast. And in fact, companies should prepare cash flow forecasts every month if not every quarter.
This is particularly important for companies who expect significant growth or those with seasonal sales fluctuations.
Your cash flow statement is roughly calculated as follows: Cash Flow From Operations minus Cash Invested in Equipment plus Cash Received from Outside Financing.
It gets a little more complicated than this, since Cash Flow From Operations includes things such as whether your accounts receivable (how much money you are owed from customers) is going up or down, etc.
So, the key takeaway is this - do NOT risk bankrupting or slowing the growth of your business because you don't forecast your cash flow statement every quarter or month.
If you need help, the financial model portion of Growthink's Ultimate Business Plan Template has a full, plug & play, financial model which includes your Income Statement, Balance Sheet and Cash Flow Statement, so you can accurately project what your monthly cash flow will be.
Importantly, this will ensure that you can get financing, as needed, well BEFORE the months when you need it (and not risk your company's future).
Here's the link to Growthink's Ultimate Business Plan Template - http://www.growthink.com/products/business-plan-template.
Written by Christiana Moffa on Tuesday, September 29, 2009
Why Every Entrepreneur Should Wear a Top Hat
Last week, I had the great honor of attending the annual Inc. 500/5000 Conference, which celebrates the fastest-growing companies in the United States. Surrounded by the country's most inspired and innovative entrepreneurs, I was constantly amazed at what people can accomplish when they set their minds to it. Truthfully, I took a look back at my life and career and thought, "Should I be doing more? Am I inspiring others?"