Category Archives: Entrepreneurship

The future of entrepreneurship is bright!

While most of the world (thanks in great part to the media) worries and frets about the future of our country and world economy, I stay highly optimistic.

Here’s why…

I get to spend most of my working hours around entrepreneurs – the coolest and most energizing people on earth. You can’t help but be energized being around entrepreneurs – especially the next generation version of them.

Enter IMSA (Illinois Math and Science Academy). Past home to founders of companies like YouTube, OkCupid, Netscape and Paypal. It’s a high school that is consistently rated one of the best in the US and top 40 in the world. Needless to say to be that good, you have to be doing some pretty special things.

One of those really cool things at IMSA is the TALENT program. A place where entrepreneurially minded students can meet, learn and collaborate.

IMSA’s TALENT program is the first high school entrepreneurship program where the cornerstones of Entrepreneurial DNA and BOSI are being installed to build teams, design strategy and create business models.

We’re working together to build optimized teams (based on BOSI DNA) of students who will design the next-generation products and companies this semester and pitch those ideas at the end of the process. The results (I can assure you) will be nothing short of outstanding. Carl Heine and Jim Gerry who run the TALENT program at IMSA are two of the most passionate supporters of the entrepreneurial spirit in students – and it shows!

I can’t wait for the day when every high school in America (and around the world) has an authentic entrepreneurship program like IMSA’s TALENT program. Meanwhile, it’s going to be exciting to see what this next generation of entrepreneurs at IMSA have in store for us. I am confident they have game-changing innovation up their sleeves. Innovation that will solve major challenges and save money, time and even lives!

We’re excited to be a part of it and see what impact BOSI has on ensuring these innovations achieve their greatest market potential.

The best is yet to come.

Learn more about IMSA
Learn more about BOSI

Calling all Chambers: Reinvent – Before it’s Too Late

Chambers of Commerce had a good twenty-five year run. After all, create a tiered membership structure with fees from around $300 to as high as $50,000 per year, multiply by a few hundred businesses, and you’re in business!

For that, the Chamber was tasked with providing educational programming and networking, sending out a newsletter, publishing a member directory, and organizing and participating in events while serving as the “voice” of business in the community.

But in the last five years or so, the climate has changed. Chambers have watched as membership numbers fell, revenues dropped, recruiting rates stagnated, and overall member satisfaction declined.

Chambers used to be such an integral part of the small business ecosystem.

What happened?

Simple: When you stagnate you fall behind… and eventually become obsolete. That’s what happened to Tower Records (Napster played their role in that too).

In essence, that’s what happened to Chambers.

Once, the only way to get connected with other business owners was through the chamber. Recent data shows that face-to-face networking is down 20% globally. Entrepreneurs just don’t have the time for networking events.
Then companies like LinkedIn (the Chamber’s version of Napster) disrupted conventional networking by offering it on a global scale – and for free. Then other ventures like BOSI, OnStartups and Entrepreneur.com started providing networking and information access on a global scale.

    It was once a badge of honor to be a Chamber member. Ask most entrepreneurs today if they are a member of the Chamber; they will likely say no or they’ll say, “Yeah, but I don’t know why we still are.”
    It was a great place for B2B companies to generate new business. Today, because of a flawed business model, the Chamber is the place where lawyers, accountants, MLMers and financial planners all fight for the attention of the next new member.
    It was a place to collaborate. While a certain amount of collaboration does still take place among Chamber members, the savviest and most successful company owners don’t attend events anymore, so the overall membership no longer gets the best the community has to offer.
    It was a place to access great education and insight. The area where Chambers have fallen behind the most is education. Once the Chamber was the best place to gain insight and input. After all, the Chamber had the power to source top minds and deliver them to members. Calling today’s Chamber presenters sub-par is an overstatement. As numbers at Chamber events dropped, top speakers bowed out and went to greener pastures, leaving the stage to the remaining, below-average speakers. Plus Chambers are caught in the old-school paradigm of “sourcing local,” so they continue to put flavor of the month “experts” on stage – most of who cannot compete with the real experts… and wonder why only twelve people sign up for the next seminar.

Leading the charge in reinventing the Chamber to meet the needs of a new generation of entrepreneurs is the Durham Chamber led by ACCE rockstar Casey Steinbacher.

I had a chance to spend several phone sessions and one on-site day with Casey and her team as they were going through their reinvention process. Some things I noticed right off the bat were.

    Casey wasn’t stuck in an old-school, we’ve-always-done-it-one-way mindset. She was thinking outside the box. She was thinking big. Most importantly, she approached her strategic planning process with her customer (not her chamber) as the focus.
    She embraced change. It didn’t take long for Casey to find out that her hottest growing market was young tech-focused entrepreneurs (not law firms and multi-level marketers). These techies had their own language. They had their own culture. They didn’t see the value in attending business card exchanges. They wanted to plug into something exciting that would have global impact. Rather than shake her fist at this group, she engaged them in conversation. Those conversations led to huge breakthroughs in how she builds and delivers programming now.
    She was willing to re-program her staff. Having a full time person who plans events – events that get a whopping 12 people every time is not the best use of good talent. Casey recognized that and moved her staff to a “concierge” model. A model that builds client engagement while adding tremendous value to a chamber member.

I am sure there are a handful (and I’m being generous) of Chambers who are doing Casey-like re-engineering. Don’t get me wrong, I haven’t spoken with a single Chamber President who hasn’t done a ton of strategic planning in the last 18 months. It’s just that most of them are just revisiting old habits and recycling outdated best practices.

But I’m encouraged by the few who are doing breakthrough things. That’s what the entrepreneurial eco-system needs right now. Breakthrough Chambers. Not a bunch of “give us your $350 and we’ll send you a newsletter and a few postcard invitations to boring events” Chambers.

Some quick tips off the top of my head of what Chambers should seriously consider? Here goes…

  • Get out of the education/workshop/seminar business. You cannot compete with educationearth, itunesU, podcasts, YouTube, Bloggers and BOSI on delivering high-end programming to entrepreneurs.
  • Don’t make “networking/business card exchanges” your core value proposition to new members. Meetup.com, Linkedin and BOSI allow members to connect on a local and global scale with great efficiency and better targeting – and for free.
  • Stop claiming to be the way local small business connects with buyers. Groupon, LivingSocial, Google and hundreds of other daily deal services do a far better job with great efficiency.
  • Instead, focus on being really excellent by:

  • Advocating for small business and startups: More than anything, entrepreneurs need a voice with local and state government. Becoming that voice and driving home the agenda of free enterprise should be your singular mission. The Chicagoland Chamber of Commerce is a great example of a powerhouse in small business advocacy.
  • Connecting big business with small business: Help facilitate introductions and deals between large and small companies in your area. Chambers like Chester County, PA do a great job making important connections – for both parties.
  • Becoming the face of business to the community: Stop promising small business you can help them get new customers. (Most membership directors end up insinuating this, whether directly or indirectly, during the recruiting process). Instead become the voice of business to the community. Tell great entrepreneurial stories. Highlight local successes and build community pride.
  • Leveraging membership for fundraising: Entrepreneurs are extremely charitable. Chambers can partner with non-profits in the area to help them connect and raise funds through Chamber members. Chambers could create great connections between non-profits and members and in the process add tremendous value to the community.
  • There is so much more to be said on this topic – I could fill a whole seminar on it. But I just hope that more Chambers get wise to the changing times and do what they have to do to keep adding value to their marketplace.

    If not, they’ll be obsolete just like Tower Records.

    Fighter Pilots and Entrepreneurs – what they need to have in common

    Serial tech startup rock star, small business owner, consultant, church plant pastor – doesn’t matter. We’re all entrepreneurs. While we’re certainly wired differently and may start and run different ventures, we’re all part of the same species.

    So we share the same challenges – like how to deal effectively with stress.

    That’s why we’re currently studying how stress affects the entrepreneur’s decision-making process and how it impacts the outcome of those decisions. Each of us responds differently under stress: Some freeze, some shoot from the hip, others take a step back to get more information… regardless of how you respond, stress definitely affects how effectively you make decisions.

    Here’s the main problem: High stress decision-making comes with the territory of being an entrepreneur. But there isn’t a training ground for how to make those decisions under stress – at least not yet.

    I first started thinking about high stress decision-making during a Starbucks meeting with Essan Soobratty, a brilliant, articulate, and seasoned trader working here in Chicago. He described the massive amount of research done on how elite, high risk-taking careers like hedge fund traders, elite military forces, rescue personnel, and fighter pilots make decisions.

    He helped me connect an important dot that will have a huge impact on entrepreneurs in the future.

    Here goes…

    The primary job requirement in high risk-taking professions is the ability to perform in predictable and repeatable ways even while experiencing inhumane levels of stress.

  • Traders make high-stress decisions (often within seconds) while putting millions and billions of dollars at risk.
  • Fighter pilots endure tremendous amounts of physical and psychological stress while making split-second decisions that impact lives.
  • Elite forces like firemen, SWAT officers, Navy SEALS and Army Rangers train for countless hours to simulate the incredible amount of pressure they face in real-life engagements.
  • Without significant amounts of vetting, selection, development, and consistent, ongoing training, these individuals will make the wrong decisions – and at a tremendous cost:

    Imagine the consequences of a firefighter who steps into a five-alarm fire after a weekend of initial training.

    Or worse yet, a sub-standard Navy SEAL tasked with taking on a terrorist compound halfway around the world while protecting his team.

    Or imagine being an emergency room physician dealing with multiple high-risk patients within a 10-minute window and making life-changing decisions with very little information on hand.

    Expertise, competence, experience and confidence are everything in those situations.

    Now imagine being a first-time entrepreneur facing a major financial, human capital or legal setback who must make a timely decision – with no preparation, training, or experience.

    The outcome could be devastating.

    And usually is.

    Which leads us to a question I continue to pose to the entrepreneurial eco-system:

    “Why is the frustration and failure rate in entrepreneurship stagnant or getting worse despite massive improvements in access to information and support?”

    Part 1 of the answer is definitely Entrepreneurial DNA; people who select the wrong businesses, run them incorrectly, and engage with people, providers and insight not optimal for who they really are.

    It is becoming apparent to me that Part 2 of the answer is a total and complete lack of proper simulation/pre-launch training to prepare the entrepreneur (or budding entrepreneur) to make high-stress, split-second decisions in a cool, composed, and predictable manner – just like a fighter pilot.

    If elite forces, emergency room physicians, hedge fund traders, and fighter pilots benefit from high-stress cognitive training – so can entrepreneurs.

    We’re working hard this summer at BPI to build the ultimate entrepreneurship simulator to allow entrepreneurs from every industry and walk of life to step in and build expertise and competence. The predictable kind of expertise!

    And we’re looking for experts, researchers, technologists and guinea pigs to help us with this massive initiative.

    Feel free to toss yourself in the fire with us if you’re up for it. You’ll learn a lot – and I promise it will be fun!

    Event Reflections…

    Experiencing an “Aha!” moment is really fun, especially when you know one is coming – and when that moment leads to a breakthrough.

    Last week I presented the concepts of Entrepreneurial DNA and BOSI to a group of fifty folks in Chicago. Participants included a great mix of entrepreneurs, community leaders, people from the small business development and economic development agencies.

    I started by presenting the BOSI Quadrant, which allowed everyone to quickly identify individual entrepreneurial styles and traits – the “Aha!” moment. Then we split into four groups, each DNA type gathering at a different table hosted by a BOSI partner.

    For participants “Aha!” became a breakthrough event for a number of reasons:

    1. Each entrepreneur spent quality time with people they could truly relate to: People who share their strengths, weaknesses and frustrations. They no longer felt alone, knowing others felt the same joys and pains in their business lives. There was an instant connection amongst each group, a connection that is very empowering.

    2. Each entrepreneur shared his or her story in a very different way. During most “Tell us about yourself and your business” roundtable discussions, elevator pitches dominate the conversation as each entrepreneur tries to “sell” others. (After all, isn’t elevator pitching what we’re told to do?) In this case, each group shared an instant connection: Since we had already discussed the strengths and weaknesses of their particular DNA, they instead dove headfirst into discussing their challenges and needs. People spoke with a level of authenticity rarely seen at group events.

    Each table quickly built a real sense of community, which is my hope for the BOSI online community as well – we can all speak with greater authenticity and build stronger communities when we set aside our masks.

    3. Connections were much more meaningful. When entrepreneurs at the table asked each other for their business cards, I noticed they didn’t take the usual “grab and stash” approach. Instead, they made a “grab, read carefully, make notes on the card and then carefully place in a safe location” exchange of cards. Compared to the typical business card exchange, I feel sure stronger business alliances and more commerce will result.

    4. Learning was richer. I personally led the table of Innovator DNA entrepreneurs. Because we had like DNA, we didn’t waste time on irrelevant subjects. We were immediately tackled issues Innovator DNA entrepreneurs face. We spoke in detail about human capital challenges, business management frustrations, and even overcoming personal obstacles. We accomplished (and gained) more in forty-five minutes than an eight-hour seminar with a so-called “guru” preaching a one-size-fits-all approach from the front of the room.

    5. The larger group dynamic was… dynamic! When we regrouped, it was amazing to see the lightning bolts of energy flash as entrepreneurs compared their BOSI Profiles and table experiences with each other. The environment was energetic and electric. Why? For the first time, these entrepreneurs were recognized for what they really are – individuals. Individuals with unique traits who no longer have to “compete” with each other in areas where they were gifted or weak. Instead, collaboration ruled the day, with a spirit of, “Hey, if you’re great at selling and I’m great at process, maybe we can help each other out,” filling the room.

    All in all, this was the first of what I hope will be thousands of events around the world where entrepreneurs meet, learn, and collaborate in new, more productive, and more empowering ways. But that will take an army of leaders around the world who “get” the breakthrough of Entrepreneurial DNA and bring it to their local entrepreneurial eco-systems.

    I commend the BOSI Test and Entrepreneurial DNA to you. Not because it makes me a dime; after all, it’s free!

    But because I know the impact it will have on your business…and your life.

    The arrogance of the entrepreneurial “elite”

    Every time I hear it, I want to wring their little necks!

    I’m talking about the arrogant and childish statement made by many of the entrepreneurial “elites” that goes a little something like this…

    “Not all business owners are really entrepreneurs…blah…blah..blah”. (They go on to pontificate why – but I mentally check out on their rants).

    What?

    Are you kidding me?

    Is “entrepreneur” now a title that must be earned? Have we so missed the corporate rat race that we must now introduce a cast system within our world?

    I recognize what the entrepreneurial elite are trying to do. They are trying to appear different, special and well, better than the typical business owner. In their own self-indulgent, low-self-esteem-having world, they can’t possibly imagine being in the same group as a pizza shop owner, dry cleaner, financial advisor or boutique manufacturer.

    The uber-elites want to have their own designation. A place to “arrive” when you become as great as them. I get that, and in some ways, understand why they need to feel different (see note above about self indulgence). But if you are one of the entrepreneurial elite, here’s my challenge to you.

    Leave the word “entrepreneur” alone. Find yourselves another word like “mucky muck” or “elitist” and play with that.

    The fact is, the dictionary definition of entrepreneur is a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk.

    Read the definition carefully and you’ll see room for tons of different “types” of entrepreneurship. Yes, someone who organizes and manages a business is certainly an entrepreneur (and you don’t have to get VC funding to qualify for that name). However, entrepreneurship doesn’t stop there.

    There is an entrepreneur inside everyone of us. Some of us use it to climb the corporate ladder, others of us use it in the creative arts. Some use it to homeschool their kids and others step out and launch a business.

    So if you’re one of those uber-elites (who interestingly enough are typically academics with no real-life business experience, VCs who have the same DNA as a multi-level-marketer and entrepreneurs who had an exit so big, they can’t believe it themselves), back off the word “entrepreneur” and stop trying to make it a private club.

    It simply isn’t. Entrepreneurship is a God-given gift we all get to use in different ways.

    CrowdPitch Chicago sponsored by Lendio

    Scoring financing is one of the hottest topics in entrepreneurship and my new friends @lendio are doing their part to help entrepreneurs find the right funding sources. In addition to their subscription service that boasts 70+% funding rates, they sponsor cool events like this one.

    They invited me be on a panel for an innovative event called CrowdPitch. The Chicago version of the event was hosted in partnership with the Northwestern/Kellogg Entrepreneurship Week festivities.

    CrowdPitch is a 90 min. event where 5-6 companies are selected to present their ideas to an audience of their peers and a panel of experts. Presenters have just 4 minutes to wow the audience before a brief Q&A from the crowd. Panel feedback follows.

    At the conclusion of the pitches, the audience and panel “invest” FUN money with the company that impressed them most. The winner receives a small prize, but more importantly validation, expert feedback, and exposure for their business.

    Bill Pescatello and Brian Axelrad were on the panel with me and needless to say, it was a blast.

    The five companies that pitched at the event were:

    AlumSocial: Cool concept, but their live demo crashed, so they didn’t really get to do their thing :-( . The lesson for all of us – use screen shots rather than a live demo (unless the investor specifically asks for a live demo).

    Energy Recovery Technologies: Another fantastic energy/green technology. Super competitive marketplace. I told them they needed a rockstar business development team to match the expertise of their R&D team to have a shot at being a market leader.

    Socioclean: I was super-impressed with this venture. Sharp CEO, great technology and decent traction already. If you’ve ever worried about an employer (or future employer) finding your not-so-flattering party pictures and obnoxious Facebook posts when they do some checking on you, sign up for Socioclean and they’ll help you fix that pronto! I’m confident they’ll get venture funding soon.

    SpotHero: Wouldn’t it be cool to show up to a crowded concert or sporting event to have a reserved parking spot waiting for you? SpotHero is designed to connect parking spot owners (including people who want to rent out their driveway) with spot buyers (people like you and me who don’t want to walk 5 miles from a remote parking lot). They have a stiff uphill climb ahead of them unless they can land a million bucks to leapfrog the competition. It is another crowded marketplace. However, the two founders are sharp, driven, go-getters so I’ve got my fingers crossed that they’ll stay committed to the project no matter what.

    Tix4Cause: Kevin Nemetz at Tix4Cause was super nervous making his pitch, but they have built a very cool company that is really adding tremendous value to both buyer and seller of event tickets. The next time you have some tickets to offload (or if you’re looking for great tickets to an event), check Tix4Cause first. You’ll get great seats and help a great charity in the process. A very fundable business if they can solve a couple of adoption issues on the non-profit company side (they’re working on it as we speak).

    Got a great business idea you’re working on? Find a crowdpitch event near you and get on the roster. The insight, candid feedback and “free consulting” is invaluable!

    Can’t wait to do it again :-)
    (And yes, I am a sucker for an entrepreneur with an idea, so find me in the BOSI Network and I’ll be glad to give you my two cents of input if applicable).

    Skinny Girl Bethenny – Another great entrepreneurial story

    I have to admit, my wife and I enjoy watching her reality show.

    We watched the season 2 finale last night and I couldn’t help but cheer for Bethenny the entrepreneur.

    The way the story plays out, she’s had a colorful and challenging past. Some of it was well outside her control (lunatic parents etc) and much was within her control (personal choices).

    But along the way, she didn’t lose her fight. She (just like any entrepreneur) had an a-ha moment one day. The light bulb went off when she saw an unmet need in the marketplace. In her case, it was the idea for low calorie margaritas targeting women.

    Then came the game-changing step. She actually took action on the “idea”.

    She did her homework, took tons of risks, did the entrepreneurial thing and launched her product.

    A couple of years of great publicity later (appearing on Martha Stewart, Real Housewives and eventually her own show), her product is everywhere. It didn’t take long for the big guys in her industry to gobble her brand up for an alleged 120 million bucks.

    I did some poking around and wasn’t surprised to find the blogosphere claims she “got lucky”. Any entrepreneur worth their salt would totally disagree with those idiot bloggers (regardless of whether you agree with her product line or not).

    While others sit around and wait for a handout (or worse yet, never pull the trigger on their great business idea), she stepped out, took a risk and reaped the reward. None of it was “by accident” or “luck”.

    It was old-fashioned entrepreneurial gumption. And for that, I applaud her!

    VCs and MLMers share the same DNA?

    “You’re crazy Joe, VC’s and MLMers have nothing in common.” Someone said to me. “After all, VCs fund highly scalable companies and take them public. MLMers sell potions and lotions door to door. How can they have anything in common?”

    Hmmm.

    Well, let’s dive a bit deeper than the stereotypes we all have been fed. Let’s look at the general behavioral tendencies of the two groups and see if we can pick up a nugget or two along the way. Keeping mind that there are always exceptions, here is just a short list of commonalities.

    – A majority of the members of each group are impulsive decision makers. When they see something they like (typically a new money-making opportunity), they jump in…fast! Oh sure, VCs hire MBA grads to do tons of due diligence and vetting on applications up front. However, if you’ve been on the inside of the process, you’ll agree that from the time the founders of a venture pitch the actual VC investors to the time a decision is made to invest, it is typically minutes and hours – not weeks or months.

    – Both VCs and MLMers tend to have a herd mentality toward money-making opportunities. When venture X gets “big VC player #1″ to invest, half a dozen others rush in to co-invest. When MLMer #1 finds the next “big play”, hundreds more follow. HINT: Fear of loss is driving both decision processes.

    – Neither VCs nor MLMers want to start something from scratch. They’d rather find a venture that has traction and a huge upside potential. Then they jump in with the intent to ride the wave all the way to the top (without getting their hands too dirty in the process). VCs call it “exit”. MLMers call it “retire with $25k a month in residual income”.

    – Both approach failed ventures as “water off a duck’s back” – part of the game they play. VCs expect a majority (sometimes 90%) of their investments to fail or significantly underperform. MLMers who have been in the industry for more than 5 years can typically tell the story of one or more busts on their way to success.

    So…

    Whadaya think?

    They aren’t so different after all huh?

    Here’s the thing. We’re all people. Some of us have some behavioral tendencies we share with each other. Some of us use those tendencies to run big banks and hedge funds and then become VCs. Others start with a couple hundred bucks in our pocket and buy a distributor kit. But from a modus-operandi perspective, the tendencies are very similar.

    So if you happen to be an MLMer or VC (or interact with them a lot), why not understand and study the amazing strengths that drive Opportunist DNA? At the same time, why not study the predisposed weaknesses and put systems in place to compensate for them? (HINT: VCs know their innate weakness to make impulsive decisions. That’s why they hire the MBA grads to slow the process down for them. There’s a little nugget from me to you if you have Opportunist DNA).

    Entrepreneurial DNA is a BIG, BIG deal. It is the engine that drives the decisions we all make within the entrepreneurial eco-system. So make sure you know your DNA and have optimized your business (and life) around it.

    You’ll be glad you did!

    The Impact of Entrepreneurial DNA

    What’s the big deal about Entrepreneurial DNA (or BOSI)?

    That’s a question I have been asked a few times already (and I’m sure I’ll be asked that question a thousand times again).

    Everything! Is my initial answer. But I know I need to qualify that claim.

    In the book, I describe some real-life scenarios in which Entrepreneurial DNA plays a game-changing role in the outcome.

    Business selection is one of those areas.

    So many first-time (and repeat-entrepreneurs) jump into a venture for what appears to be all the right reasons.

    1. The timing is just right.
    2. There is strong market demand.
    3. There is a niche that is left untapped.
    4. There is a need that has not yet been filled.
    5. There is expertise at the founder level to deliver to a need.

    The list goes on and on…

    In the classrooms of “old-school-entrepreneurship”, these are many of the key reasons given to start a business. But is that really the reason to pull the trigger?

    Our research is showing that an entrepreneur’s “DNA” (their modus operandi, gifting, tendencies and predisposition) should be a much bigger driver in business selection than any of the items above. After all, there are thousands of “Groupon-like” companies out there – but only one Groupon. If it was just about the list above, “luck” would be the only reason Groupon won the race.

    Within just the technology space are tens of thousands of very talented developers who identify the same market niche or unmet need. Yet only a handful build a successful and scalable enterprise around it. Have you asked yourself why that is – and if there was a way to predict who had the better opportunity for success?

    The fact is, the entrepreneur/founder’s modus operandi, gifting, tendencies and predispositions (their Entrepreneurial DNA) drive whether or not they will build a small, medium or very large enterprise.

    Certain entrepreneurs are pre-wired to build certain types of businesses.

    Some are built to start up and build highly scalable entities. Others are built to create copy-cat ventures. Some are best suited to leverage existing brands like Subway, Northwestern Mutual, State Farm and Amway. Others are pre-wired to invent breakthrough products and technologies that change the world.

    A ton of money, stress and headaches can be saved if entrepreneurs just understand who they really are and select businesses they are best suited to operate. Just because a guy named Andrew started Groupon and a gal named Doris started Pampered Chef doesn’t necessarily mean you will do the same. It might, but it might not. So why not find out before taking the plunge?

    When an entrepreneur selects the type of business best suited for them, they have a more fulfilling and rewarding journey…period. When they simply let timing and market need control the selection process, they often find themselves struggling and frustrated.

    The entrepreneurial journey begins at the point of business selection – and Entrepreneurial DNA plays a critical role in that decision. In upcoming pieces, I will share other areas impacted by one’s Entrepreneurial DNA. Trust me when I say, it is a long list!

    Raising Money – UGH!

    It should come as no surprise to you that the #1 issue entrepreneurs struggle with is raising money.

    How much should I raise?
    How should I value my company?
    Who should I go to for funding?
    When should I raise money?
    How should I pitch my company?

    The list goes on and on.

    The good news is, there is no shortage of information and insight online, at seminars and in books.

    The not-so-good news is that it can all be very confusing and overwhelming to get through.

    Having gone through the capital raising process close to 20 times with varying success, here is what I have found. There are 3 pillars that must be in place for the best possible outcome.

    1. Timing:
    30 seconds after the “idea” comes to you is not the time to write a business plan and look for funding. The sweet spot for Series A funding is when you have proof of concept (site live, product prototype, service developed) and market traction (measurable customer demand, initial orders, explosive traffic with good conversion).

    2. Pedigree: I have seen some of the best companies/products go unfunded because the founder(s) didn’t understand how mission critical the pedigree of the founding management team was. Financiers don’t just buy into great ideas, they buy into great entrepreneurs. I can assure you that a management team with a proven track record of having started up, built and sold ventures is exponentially more likely to get funded than one that is a first time market entry.

    If you take a candid look at your pedigree (your education, your startup track record, your business reputation) and find yourself (and/or your management team) lacking, don’t waste a lot of time and money trying to raise money with Angel and VC investors. Stick with friends and family, get your venture to the next level of success and then pursue the more sophisticated investors.

    3. Audience: Every entrepreneur lays awake at night dreaming of that big VC investor who carves a seven or eight figure check to fund their company. But reality says, that is not the rule – that is the exception. Most businesses are not good candidates for Angel or VC funding (and neither are most entrepreneurs). Take the time to really understand your venture and who its target funding source really is.

    Who is the person and situation for which your company is the ideal investment?

    A small fraction of all startups are ideal investments for sophisticated Angels and VCs.
    About 30% of startups qualify to be financed by banks and other lenders (secured by the tangible assets of the founder and business).
    A significant majority of startups are qualified to be funded by the company founders, their friends and family.

    That is just how it is.

    If you have the right entrepreneurial DNA, pedigree and business timing, you are virtually a shoe-in for a big funding round with the big boys.

    However, if you find that one or two of the pillars mentioned above are missing or weak, don’t fret – and certainly don’t waste time beating your head against a door that will not open.

    Regroup, refocus, prove your business for another few quarters – and maybe, just maybe you’ll have all the pieces of the puzzle in place for that bigger capital infusion.

    Stay focused, committed and driven to make your company work with or without the big funding. Craft a plan that allows you to go to market without a million bucks in the bank. If you can’t, you don’t really have a business. You just have a great idea.

    Prove to yourself and your potential investor that your company is not just a great idea, but a great company run by outstanding managers and a fanatical customer base. Accomplish that, and you’ll see the 18-wheelers backing up in your driveway full of cash from investors.

    Hope this helps!