Archive

Home
Resources
Capital Markets
Friends and Family

According to this, most serial entrepreneurs display persuasion, leadership, personal accountability, goal orientation, and interpersonal skills.  But, there are four distinct skills lacking in most serial entrepreneurs: empathy, planning and organizing, self-management, and analytical problem solving.  Given they are critical to success of an organization, it seems advisable for investors to keep an eye open for these leadership deficiencies and have a plan for filling them.

Check this out from Steve Tobak in Inc. Magazine.  He says the biggest reason start-ups fail is that they don’t know what they are doing and they don’t know what they don’t know.  And he provides solid advice for overcoming this.

Remember the days of 120-page private placements memorandums, 60-slide PowerPoint decks, and 90-minute investor presentations?  That was way back like, what, five years ago?  Actually longer than that, but the point is that today is a whole new world.  If you have something to sell, you have to communicate it in five minutes.  Sure, if you can initially hook a prospective investor, you’ll get a longer time with him or her down the line, but if you can’t set the hook in five minutes when you first have the opportunity, you are history, at least with that investor.  The “elevator pitch” that used to be confined to venture capital is now de rigueur virtually everywhere.  Investors simply don’t have time for anything else.  And even if they have the time, they demand simplicity in the business or at least that you have the ability to express it simply.  Here is a good guideline for your pitch.

I’ve had countless people ask me, after telling them that their start-up, or even later stage company, needed friends and family money, “Okay, excellent, can you introduce us to your friends and family?”  ”Sorry, dude,” I tell them, “it’s YOUR friends and family.”  Here’s some advice on going that route.

So when a start-up hits the wall, it’s usually a pretty fast death as people run for the doors.  And they run for the doors because they think all value has vaporized, they need a paying job, and while it’s okay to have been associated with a failed start-up, there is a stigma attached to hanging around the carcass too long.  But there is usually value in the fast sinking ship: the people themselves, their ideas, their teamwork, their connections, and, of course, their IP.  So this guy at ExitRound is trying to develop a way to effectively broker the remains.  Kind of interesting.  

Even if money is available, there are good lessons in this piece for start-ups and even later stage companies.

Good advice here for seed capital and angel financing for start-ups.  And the most prescient is the advice re numbers.  Raising money is rarely easy and the best attitude to have is that it’ll take 100 “nos” for every “yes.”  And you just plug away knowing that every “no” is getting you closer to the “yes.”  In essence, every “no” represents progress…a victory of sorts.  In my experience over the years of raising $6 billion, a good story can always find investors to back it and persistence always wins. Always.  A bad story is another story…   


Twitter: TraversiCapital

© 1999-2016. Traversi Capital Advisors, LLC.,