Earlier this week, Growthink's Co-Founder Dave Lavinsky spoke with Dave Humphrey, COO and Senior Investment Professional for Oklahoma Equity Partners, based in Tulsa OK. Humphrey has served as a principal at Davis Tuttle Venture Partners (the oldest VC firm in Oklahoma). Also, in over 10 years with Koch Industries, he led $300+ million of expansions and acquisitions, and served as the CEO of a $200 million business where he increased profitability by six-fold.

You can click here to listen to the entire interview: http://www.growthinkuniversity.com/public/248.cfm

In the interview Dave discussed how networking plays a role in both capital raising and bolstering a management team, as well as a way to approach financial projections that will show investors your true capacity to execute on a market opportunity.

Also discussed are the 3 key elements that Humphrey looks for in every business plan.

To listen to the interview, visit this link: http://www.growthinkuniversity.com/public/248.cfm

We welcome you to attend our webinar "How to Successfully Invest in Venture Capital and Private Equity."

In the webinar, Growtthink's CEO Jay Turo provides an overview of venture capital and private equity investing, including commentary on current market conditions (credit crunch, decline in stock market, real estate bust) as well as private equity investing "best practices" for success in the current environment.

During the webinar, Jay provides his perspectives on:

• The credit crisis and the stock market correction
• Why smart investors are engaged in a "quest for value" and how this relates to private equity
• The importance of applying portfolio theory to private equity & venture capital
• How to assess risk and price venture capital & private equity deals
• Why most private equity investors fail -- and what to do about it
• Which sectors present opportunities NOW

Use this link to learn more and reserve your spot:

Growthink's Private Equity & Venture Capital Webinar

Special Announcement:
Are you an entrepreneur looking to raise capital from private investors? With Growthink's Private Placement Memorandum Template, you can finish your PPM quickly and easily, so that you spend less time "preparing," and more time speaking with investors.

Sometimes things are so obvious as to be hard to see.  

That is certainly the case right now with the incredible flood of federal stimulus pouring into the economy - both in terms of fiscal and monetary policy.   But saying it in this way, as it is often done by the chattering media classes, makes the issue unnecessarily opaque and complex.   We agree with Milton Friedman (and not just because of his long Stanford connection) when he describes inflation as "always and everywhere a monetary phenomenon."

I’m really good about working out. With few exceptions, I go to the gym every day after work and try to work out at least one day over the weekend.

Part of why I go is to stay in shape, but I think it helps me a lot business-wise as the exercise helps me release excess energy so I can really focus on the tasks at hand when needed.

Because there’s always too much to do each day and yet I insist on going to the gym, I’ve devised a laser-focused 25 minute workout that I follow. It’s nothing too fancy -- it’s mainly that I go from machine to machine to machine with no breaks in between (many people do a similar routine but it takes them twice as long since they take breaks in between each rep and/or machine).

Anyway, what this means for me is that every January is a nightmare. Why? Because every January, the gyms are full. And this means that I can’t quickly go from machine to machine to machine because I have to wait for others who are using the equipment.

This happens because every year, tons of people make New Year’s resolutions to go to the gym more. So, in early January, the gym is full of these “resolutionists.” Fortunately, by February, they’re usually gone and it’s back to normal.

The reason I tell you about this is that it’s incredible how much this mirrors raising capital.

To begin, raising capital, like weightlifting and exercising, only works if you do it EVERY DAY. You don’t get strong working out like crazy for one month and then relaxing the rest of the year. Rather you need to put in an hour a day or an hour every other day throughout the year to realize an impact.

When raising capital, you need to constantly be speaking with investors, finding new investors, and making presentations. You need to constantly tweak your business plan to make it better and better. This will not happen overnight. It takes months.

Also, in weightlifting, if you don’t know what you are doing, you will have poor form and you will most likely hurt yourself. In capital raising, if you don’t know what you are doing, you will also hurt yourself and your company by failing to raise the capital you need.

And, like in the gym example, all the “resolutionists” HURT YOUR CHANCES of success.

At the gym, the “resolutionists” hurt me be using my machines and thus slowing me down.

When raising capital, those who don’t know what they are doing also hurt your chances. They submit their business plans haphazardly to every investor who will accept them. While these investors will rarely if ever fund these plans, they waste the investors’ time. As a result, the investors have less time to review good plans and meet with good entrepreneurs, like you.

I wish I could tell you that raising capital was fun. But I can’t. I wish I could tell you that it was easy. But I can’t do that either. Like weightlifting, it’s neither fun nor easy, but once you learn how to do it, and you repeatedly do it right over a period of time, you can succeed and the rewards far outweigh the costs.

GrowthinkUniversity.com, our new membership website, was designed to teach you how to raise capital using the proven techniques that we have implemented over the past decade for our consulting clients.

In his post, Could the credit crunch be good for startups?, Alexander Muse of Texas Startup Blog discusses Nortel's bankruptcy filing, and the silver lining he sees for entrepreneurs in the telecom space.

Muse writes:

With the bankruptcy and ultimate breakup of the company, there will be lots of room for innovation from startups and entrepreneurs in the telecom space... Tightening credit markets mean that companies need to generate profits and can’t simply use debt to wait out under capitalized startups.  

Just as forest fires cause great destruction, they are fueled by dead wood and allow new healthier forests to emerge.

Related post: The Downturn - Keeping Things in Perspective

The Small Business and Entrepreneurial Council recently released its ranking of the states that impose the fewest burdens on the growth of new businesses in their areas. 

The report analyzes dozens of factors affecting entrepreneurship including regulatory costs, health-care costs, and crime rates.

Here are the full rankings of all 50 states, including District of Columbia (which came in dead last):

1. South Dakota
2. Nevada  
3. Wyoming
4. Florida   
5. Washington
6. Texas     
7. South Carolina
8. Alabama
9. Virginia
10. Colorado
11. Tennessee         
12. Georgia
13. Arizona
14. Missouri
15. Utah      
16. Alaska   
17. Mississippi
18. Ohio       
19. Michigan
20. Indiana
21. Oklahoma 
22. North Dakota
23. Kentucky
24. Illinois
25. Pennsylvania
26. Wisconsin  
27. Louisiana
28. New Hampshire
29. New Mexico
30. Arkansas
31. Kansas
32. Oregon
33. Montana
34. Delaware
35. Idaho        
36. Nebraska
37. Connecticut
38. Maryland
39. North Carolina
40. West Virginia
41. Hawaii
42. Iowa
43. Vermont
44. Massachusetts
45. New York
46. Minnesota
47. Rhode Island
48. Maine
49. California
50. New Jersey
51. District of Columbia

Click here to read the full report.


Where does your state fall on the list? 

Does your state's ranking reflect your personal experience?

What traits and skills really make Richard Branson, Bill Gates, Donald Trump, and countless other entrepreneurs so successful?

Over the past decade, we've identified key ingredients that lead to success, which we've observed both in celebrity entrepreneurs and in our most successful clients. When it's all said and done, they have all of the following critical skills, which are essential to entrepreneurial success:

Vision & Leadership: Entrepreneurs must have a vision of where the company will be in the future.  In addition, you must be able to communicate you vision so as to motivate employees, investors, and partners to help you achieve that vision.  You must be able to identify staffing needs, expertly fill them, and lead your team to success. Rarely do entrepreneurs build successful companies all by themselves.

Focus & Execution: Entrepreneurs must focus to make sure that goals are achieved, customers are satisfied, and employees are motivated. For most entrepreneurs, staying focused is harder than it sounds.  Be careful not to be seduced by the next exciting opportunity without executing on the priorities at hand.  And don't let perfectionism prevent you from taking action, either; at the end of the day, a product on the market is better than a product shelved due to lack of focus, execution, or perfectionism.  Get to market and get feedback from your customers as soon as possible.

Persistence & Passion:  As an entrepreneur, you must be passionate about what you are trying to accomplish. In addition, you must be willing to commit whatever is needed of them, whether it's time, energy, money, or other resources.  You must persist through trying times (which will be frequent), and fight as much as needed to achieve the goals you have set for yourself and your team.

Technical skills:  As the owner of your firm, you may not need to be the most skilled technicion on your team.  But you need to have necessary foundational knowledge to be able to lead your technical team and make informed decisions. 

Flexibility: Successful entrepreneurs understand that the world and the environment in which they operate are constantly changing. While you must focus on the end game, you also must adapt your strategies and offerings to meet changing market conditions.

There has often been debate regarding whether entrepreneurship can be taught. Can you really teach persistence or passion? Perhaps you can't.  But if you understand the importance of these entrepreneurial traits, you can focus on them and make the necessary adjustments to succeed in your entrepreneurial endeavors.

What about you -- what skills or traits do you think make entrepreneurs successful? 

In my previous post, I explained how getting an outside perspective improves your chances of raising capital.

There is a second, equally important, benefit of retaining a business planning consultant to develop your business plan: it improves your business strategy.

Let's start with some facts...

Fact #1: There are 24 million businesses in the United States alone.

Fact #2: History tends to repeat itself.

What I mean is, if you have an idea, whether it's a marketing idea, operations idea -- anything really -- chances are it's been tried before.  Chances are also that if it failed the first time, it will most likely fail again.

That's not to be discouraging, because there's a decent chance that it wasn't executed properly the first time, or lacked the nuances you bring to the idea. Regardless -- if your idea has been tested before, I bet you want to know about it.

When you are aware of the earlier attempts of an idea, you can quickly learn from them and either 1) Determine that it won't work (and cut your losses) or 2) refine the strategy and make it work.  But, if you never know about those other attempts, your chances of failure are increased.

A competent business plan advisor can provide a lot of value during this research and discovery phase.  Reputable business plan consultants not only perform market research, they leverage their existing knowledge and experiences regarding their own businesses and the businesses of their colleagues. This positions them to point out those potential pitfalls and strategies which have failed in the past, as well as strategies that have been proven to work.

This is very important, because unrealistic assumptions can kill a business.

To explore this, let's take an example from a company I just spoke with yesterday.  This firm is about to launch a new division offering BPO (business process outsourcing) services.  When I asked about their expected sales cycle (the time it takes from when they contact a prospective customer to when they secure the client) they answered 3 to 6 months.

Well, 3 to 6 months is a reasonable sales cycle in this industry. But what if they told me 3 to 6 weeks? Worse yet, what if they went out and succeeded in raising financing -- expecting revenues to come in within a 3 to 6 week period?

Most likely, they would have raised too little money and gone bankrupt while anxiously waiting for prospects to become customers.

There's another piece to business strategy consulting, which involves taking interesting (or even seemingly mundane) ideas from other industries and finding creative ways to adapt them to your business. These types of insights are frequently offered by outside advisors and have been known to result in breakthroughs responsible for transforming entire industries.

Consider roll-on deodorant. The "roll-on" part was inspired by the ball-point pen. Before that, deodorant was packaged in cream form. Or, consider Fred Smith's Fedex. Smith applied the banking industry's method of clearing overnight checks to the overnight delivery of packages.  Each of these cross-industry breakthroughs resulted in billion dollar industries.

I'll admit it... As a kid, I hated history class. I couldn't imagine information less relevant to my life than what happened in Europe 600 years ago. But you can't be ignorant about what has happened in the past or what is happening around you -- even half-way across the globe -- because it does affect you. Knowing what other companies are doing, what's working and what's failed -- that's the information that will prevent you from repeating failures and allow you to replicate success.

Who knows? A well-researched busines strategy might just result in a breakthrough that establishes your place in business history.

Related post: How Business Plan Writers Help You Raise Capital