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Challenges of Growing Your Business – Planning Ahead

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The plan that made sense for you a year ago isn’t necessarily right for you now. Market conditions continually change, so you need to revisit and update your business plan regularly.

As your business grows, your strategy needs to evolve to suit your changed circumstances. For example, as you move from your Series A to your Series B funding your focus is likely to change from winning new customers to building profitable relationships and maximising growth with existing customers. Read more…

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The Challenges of Growing a Business – 6 Steps to Keeping Up with the Market

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Growing businesses face a range of challenges. As a business grows, different problems and opportunities demand different solutions – what worked a year ago might not be the best approach today. All too often, avoidable mistakes turn what could have been a great business into an also-ran.

While it’s important for you to be on top of everything that’s going on inside your company, you should also realize that what’s going on outside is just as important, if not more so.

Keeping pace with market trends is never easy – day-to-day you’ve got a business to run, after all. But market research isn’t something you do just when you launch your business.

Business conditions change continually, so your market research should be continuous as well. Otherwise you run the risk of making business decisions based on out-of-date information, which can lead to business failure.

It’s important to acknowledge that your industry is ever-changing and in order to stay ahead of the curve and avoid competitors passing you by you need to be able to move with the times for the benefit of long-term business planning.

Here are 6 key steps to Keeping Up with the Market: Read more…

How to Survive Transition to a Growth-Stage Company

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“Why change my leadership style? It got us to this point, where we’ve established a real beachhead in our market.”

These are the famous last words of many an entrepreneur.  It’s much easier to stick with what’s been working and as a result, fail to realize that critical transition points in the growth stages of a company require leaders to change tactics and focus. The company stalls. Confusion grows among key team members, investors, customers and suppliers. And, ultimately, the failure to understand the demands of the transition lead to the failure of the company itself.

The mission of a startup is to search for a business model, while the goal of a growth-stage company is to execute that business model.  Understanding this difference — search vs. execution — is critical to the success of every company. Read more…

4 Mistakes made by Startups preventing a Successful Exit

SD_MA_mistakesWhile exiting your startup might not seem like the goal in the beginning, it will be if and when you take investor money.  And while you may think you’ll want to run your business forever, the reality is that the time to move on will eventually present itself.

So the issue at hand should not be deciding whether or not to sell, but rather deciding what you can do now/today to make sure your business is acquired for as much money as possible.

And while large companies and investors won’t overpay for something, they will hand over big sums of money for something they consider valuable.

For founders this means that securing the best exit for your startup starts with thinking about your business in the same way those considering buying it will be.

Obviously you need to make sure your numbers are strong and that you have a long-term strategy in place, but there are other factors that many startups ignore. Read more…

How to Present Your Financial Forecast

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Having A Powerful Financial Forecast

When it comes to start-ups it is very difficult to know where you will be in 5 years. However, having a powerful financial forecast will help you in understanding the capital that is required for at least the next 18 to 24 months of runway.

Now, what should you present in your financial projections to justify both the amount you want to raise and to get as high a valuation as possible to minimize dilution?  I believe you should present a financial model you believe you can deliver.

Everyone projects their revenue will go up and to the right.  Investors expect that.  After all, why would you approach an investor if you think your revenue will decline over time?  Investors, therefore are very skeptical of the actual projections.  They’re looking for something else. Read more…

BUILDING (not busting) TRUST and the growing importance of a strong corporate purpose

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As we become more interconnected and interdependent, concern about a business trust gap has grown: 58% of CEOs worry that lack of trust in business could harm their company’s growth, up significantly from 37% in 2013. I believe this breakdown in public confidence creates risks for individual companies, but also political, economic, and social systems around the globe.

As with just about everything, technology plays a role here too. A significant number of  CEOs are convinced that gaining and retaining trust is harder in the digital era. Notably, they also emphasize the growing importance of establishing a strong corporate purpose and reflecting that purpose in their organizational values, culture, and behavior–recognizing that the definition of trust has changed—specifically, expanded.

Today, for example, to counter the risks stemming from the inevitable data breaches and cybersecurity issues, a company based on integrity and transparency will be strongly positioned to speak directly to its customers and stakeholders–both present and future–outlining all that was done and will be done to preserve data privacy.

Look what has happened to Equifax and Sony when their databases were breached, or to Facebook when it simply turned over data from 50 million Facebook accounts to Cambridge Analytica , then didn’t watch where it went.

This prompted Mark Zuckerberg to make a statement: “We have a responsibility to protect your data, and if we can’t then we don’t deserve to serve you.”

The days where the CEO of a company was rarely accessible to the end customer or was able to get sanitized feedback are gone, as are the days where the consumer had little insight into how a product was produced and a supply chain crafted.

Today, I believe executive teams need to fully grasp the ethical and moral implications of their decisions, and communicate their actions with integrity. Trust has become an equalizing force, moving power from top-down to peer-to-peer.

This means that while trust is an increasingly challenging issue, organizations that succeed in earning and retaining trust have much to gain. I have seen that when businesses effectively articulate their purpose, act transparently, and stand by their values, trust and success can go hand in hand. Sustained execution is key.

Core Values

I believe that without a strong core, the organization risks instability from cultural challenges, loss of focus, disengagement, and lack of heart as the company scales up.  Core Values are the rules and boundaries that define the company’s culture and personality, and provide a final “Should/Shouldn’t” test or all the behaviors and decisions by everyone in the company.

Core Purpose

If the Core Values are the soul of the company, the Core Purpose (some call it “mission”) gives it heart.  The Purpose answers the ultimate question “Why?”  Why does what we do matter, and what difference are we making in the world?  Why would our customers or the world miss us if we weren’t around?

I believe that without a purpose more meaningful than making money, employees will pour their enthusiasm and energy into something else.  A powerful Purpose tends to revolve around a single word or idea.

  • Innovation
  • Happiness
  • Freedom
  • Value

Out of this single idea should emerge a “stump” speech that the CEO shares repeatedly, reminding everyone of the big picture and “why we do what we do.”

A leader must go beyond merely posting a company’s Values and Purpose on the wall and handing out plastic laminated cards.  The key is for you to align ALL of your HR systems and process around one list of your Values and Purpose.

One fact is indisputable: the role of business in society has never been more important. Hand-wringing over uncertainty will not lead to success. But leaders who step up to collaborate across sectors, borders, and markets and the public at large will forge ahead.

For help with effectively defining your Core Values and Core Purpose, the foundational piece to setting strategy, contact me at mike@therevenuegroup.net

Feel free to also visit our website to learn more about the services we offer to help you Position Your Potential: https://www.therevenuegroup.net/

p.s.

I also invite you to download the white paper and learn the 5 step process on How to Quickly Increase Your Valuation: a Proven 5 Step Process

How NOT to contact a VC by email

How Not to Contact A VC

I received this email recently from someone looking to raise money:

Subject: Detecting motion with WiFi, Pilots, funding.

Dear Mike,

We turn every WiFi Router into a motion sensor for home security and automation thanks to our CES Award-winning patented technology, with no hardware modifications required.

We made several pilots with WiFi Chipset Makers, WiFi Routers Manufacturers and Fixed Broadband Providers such as Microchip, Marvell, Netgear, Arris, Comcast and we are close to licensing agreements. We have raised $1M before and now we need to beef up the team to fulfill our customers’ orders and to scale to more leads.

I am sending a link to our pitch deck for your consideration.

I live in Los Altos Hills, so we can have easily a face-to-face meeting.

Let’s go through the points one by one to see what’s wrong with this and what we could do to improve the likelihood of getting a response:

  1. Subject – This sounds like a phishing email and I’m likely to send it to the junk file.  It would be better if the writer was clearer about the purpose of the email.
  2. Who are you?  The writer starts right in describing her solution.  I have no idea why she thought I’d be interested.  A better way would be to start with a mutual connection, maybe she knows someone I know who told her to contact me.
  3. Why would I care?  The writer doesn’t mention why she reached out to me.  Is it in a sector I’d invest in?  No. The writer hasn’t shown me that she’s done any homework on the areas I might invest in or any of my previous investments.  Without showing me that she’s done some research, it seems that she simply has a name and is blindly sending emails. If she doesn’t put in the time or effort, why am I expected to?
  4. Traction – the writer does a good job of mentioning the pilots they’re doing and that they’re close to licensing agreements.  But I don’t know if they have any revenue at all. 
  5. Funds – So they’ve raised $1 million before but how much are they raising now?  Is it a seed round or Series A?  Who were the previous investors and will they be participating in this round?  I know how they plan to spend the money but I have no context for it to determine if it is relevant.
  6. Pitch Deck – She did provide a link to an online pitch deck.  That’s good.  The pitch deck could use a bit of fine-tuning, but providing the deck is a great way to help the potential investor get a sense of the company and the opportunity.
  7. Clear Ask – There is no clear ask to close the email.  I know where she lives but that’s about it.  She hasn’t told me what she wants from me. She implies that a meeting is the next step, but a stronger email would be to directly ask for a meeting and suggest some times.

This might be how the email could be written to generate a better result:

Subject: Name of your company, or Name + details of the raise (“Initech — Series A — Raising $4M”)

Dear Mike,

I see that we’re both connected to Rick Hunter and wanted to reach out. I told him I’d be reaching out to you, and he thought it would be a good connection.

Your firm has invested in some pretty amazing companies in the home security sector and I believe my company could be of interest to you because of our CES Award-winning patented technology that turns every WiFi Router into a motion sensor for home security and automation, with no hardware modifications required.

  • We have had several pilots with WiFi Chipset Makers, WiFi Routers Manufacturers and Fixed Broadband Providers such as Microchip, Marvell, Netgear, Arris, Comcast 
  • We are very close to closing our first licensing agreements and the funds will be used to fulfill these customers’ orders.
  • We raised $1M in a Seed round in [June 2017] 
  • We are a 15 person firm based in Silicon Valley and now we need to beef up the team.

Here is a link to our pitch deck for your consideration.

Please let me know if this interests you as an investment and I’d be happy to connect however you prefer.

I didn’t add much more information but simply be reordering and rephrasing it, the email is much more likely to generate a response and it’s a lot easier for me, as the potential investor, to understand what she’s looking for and what I’m to do if I’m interested.

Virtual Incubator: “More Than a Pitch Deck”

We discuss in more detail how to connect with potential investors in our virtual incubator program. This incubator will guide entrepreneurs step-by-step through the best methods for building a fundamentally sound company that a VC would want to invest in.

Learn more about what’s included in the virtual incubator program, plus details on the bonus material you’ll receive.

It’s not your typical incubator.  You get the Silicon Valley mindset without having to travel to Silicon Valley.

We don’t take any equity and there is no success fee.  We just want you to succeed.  Simple as that.

LEARN MORE HERE