Global Entrepreneurship Institute

Watch Out for Sand Traps, Land Mines, and Deal Killers

Imagine an inexperienced golfer, swinging and swinging away at a ball in a sand trap. Well, most venture capitalists will allow you to tee-up the ball and watch you take a swing. If you happen to land in a sand trap it demonstrates your competency (or really lack of) in the venture drill process. Continue reading ‘What are deal killers with investors?’ »

Discussions about At the Closing Table and Beyond

Congratulations! Out of a thousand plans, maybe 100 or so get considered and only about twenty get to meeting—so you are on your way! As you get into the talking points of a deal, know that there is much you can control when negotiating with venture capitalists. In fact, far more is negotiable than you may think, it only depends on your negotiation skills and tactics. Continue reading ‘How do we negotiate a deal with investors?’ »

Discussions about Managing the Venture Drill Process

Sorry, just like in romance and dating, the answer is “No” until you hear a “Yes.” Don’t be shy, manage the relationship. Venture capitalists are very busy folks. They all have huge slush piles of unread business plans and unread e-mails, and lots of board meetings to attend. It takes at least six calls or e-mails before they return one. Continue reading ‘How do we manage the venture drill process?’ »

Discussion of Presenting: Perfecting Your Sales Pitch

If you have not already met for an initial informal meeting over coffee, after reading your Executive Summary the venture capitalist will normally telephone you to ask some basic questions and to see how you sound in real life. Continue reading ‘How do we present before investors?’ »

Discussion Dealing with non-disclosure agreements (NDA)

Do not get hung up on having every investor sign a nondisclosure agreement (NDA). Asking a formal private equity investor to sign an NDA, especially a venture capitalist, is a sign of an amateur. Continue reading ‘Do we need a non-disclosure agreements? (NDA)’ »

Discussions About Targeting the Best Funding Sources and Getting Your Plan Placed

It is important to think of fund-raising as a process of buying capital rather than selling equity. This difference in mindset is subtle in the packaging, but very important with your placing efforts because venture capital is a commodity. Continue reading ‘How do we find investors?’ »

Discussions About Preparing Financials For Investors

Professor William Sahlman writes, “Entrepreneurs are value creators, investing today in hopes of generating cash flows tomorrow.” So the main purpose of the financial section of a business plan is to formulate a credible, comprehensive set of projections reflecting a venture’s anticipated financial performance. Continue reading ‘What financials do we need for investors?’ »

Discussions About Preparing Your Financing Strategy

We discussed the importance of finding out what works in your business model and then creating an operating plan with a detailed cash budget. In this discussion we help you determine the capital you will need for financing the growth strategy you outlined in in a previous Article. Continue reading ‘Why do we need a financing strategy?’ »

Critical Elements of A Business Plan: The Ten Value Drivers

The business plan is perhaps the most important written document you can ever create. It describes all critical internal and external elements and strategies for guiding the direction of your venture’s first several years as well as giving potential investors an idea of the venture’s structure, objectives, and future plans. Continue reading ‘What do we need in a business plan?’ »

Discussions About The Venture Capital Industry

Marc Andreessen, co-founder of Netscape, vividly describes an insider’s view to the venture capital industry’s food chain: The best venture capitalists (VCs) can see ahead and are willing to think they can fix things, put the management team together, do all this stuff. Any huge success story like Netscape or Apple is like a sausage factory. Everybody likes to eat sausage; no one likes to see how it gets made. These things are all sausage factories inside. Continue reading ‘How does the venture capital industry work?’ »

Understanding the Types of Securities

There are two types of financial offerings available to entrepreneurs, equity and debt. In exchange for private equity investments, the venture issues equity securities. There are three basic types of securities. Continue reading ‘What’s the difference between equity and debt?’ »

Discussions About Corporate Venture Capitalists 

Corporate venture capitalists will often co-invest along with traditional venture capitalists. They can add additional value by opening up access to corporate distribution channels, technology and know-how, and strategic partners. Continue reading ‘What are corporate venture investors?’ »

Understanding Why Some Business Plans Fail

The cold reality is that no one is going to read the plan with the intensity you had when you prepared it. So knowing this, most entrepreneurs focus on just getting the plan done rather than on getting the right plan done. But what is the perfect plan? Continue reading ‘Why do some business plans fail?’ »

Discussions About Financing Your Business Venture

We now want to circle back to Financing the Emerging Growth Venture. To set the stage for this discussion, here is what Anita Roddick, founder of The Body Shop, once said: “There are only two ways of raising money: the hard way and the very hard way.” As we said in the Introduction, the world of venture capitalism has its own language, its own process, and its own methods of communication between entrepreneurs and potential investors. Continue reading ‘What is the venture drill for raising money?’ »

Discussions About The Risk Capital Industry In The United States 

Frank Knight, a professor of economics at Chicago in 1928, wrote in Uncertainty and Profits, “The only risk which leads to a profit is a unique uncertainty. Profits arise out of the inherent, absolute unpredictability of things.” Alfred R. Berkeley III, vice chairman of NASDAQ, told us that “capital is like oil; it’s stored energy. It’s the fruits of someone else’s labor ready to be put into play in businesses.” Continue reading ‘What is the evolution of the risk capital industry?’ »

Mastering the Business Planning Process

Your business plan acts as a reflection of you, showing that you have really thought things through. It requires advance preparation, delegation, refinement, and, most importantly, a disciplined approach. Eugene Kleiner shares sage advice, “Writing a business plan forces you into disciplined thinking if you do an intellectually honest job. An idea may sound great in your mind, but when you put down the details and numbers, it may fall apart.” Continue reading ‘How do I get started writing a business plan?’ »

Discussions About Financing Strategy

Is your company “really” investor ready? Do you know how to market and sell to outside investors? Do you have a sound financing strategy? Here is what Anita Roddick, founder of The Body Shop, once said: “There are only two ways of raising money: the hard way and the very hard way.” Continue reading ‘What is your financing strategy?’ »

Your Business Plan: The Roadmap That Guides You to Success

Your business plan acts as a reflection of you, showing that you have really thought things through. It requires advance preparation, delegation, refinement, and, most importantly, a disciplined approach. Writing a business plan forces you into disciplined thinking if you do an intellectually honest job. An idea may sound great in your mind, but when you put down the details and numbers, it may fall apart. Continue reading ‘What is a business plan?’ »