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5 Things to Know Before Negotiating with Investors

You’ve finally found that investor interested in helping your company raise growth capital. Now you need to get the exact deals and terms that you’re looking for. Strong negotiation skills are needed in every business venture and it is important to be able to compromise on the terms so that both parties are happy with the deal. Negotiation skills are acquired through time and practice. Here are five tips that will help you get started.   1. Give and Take Make sure you know how to compromise. Both sides need to have certain needs met. 2. Be Willing to Walk Away Go with your gut. Sometimes the deal will not go through – and that’s okay. If it’s meant to be, it’ll happen, and sometimes you may need to go through multiple deals in order to get what you need and want. 3. Don’t Rush Don’t ever rush when trying to complete a business deal. By rushing you may miss important details in contracts, or you may miss out on a better deal. That being said, sometimes waiting too long isn’t helpful either. Make sure to find the right balance. 4. Do Your Homework  Do all the research you possibly can on the investor(s) that are interested in your opportunity. Going into a business venture completely blind is never a good idea. Doing the proper research will eliminated future problems. 5. Listen Make sure to listen to the other party. This is especially important in making sure that the deal you come to terms with is fair for both...

4 Ways to Identify the Perfect Early-Stage Growth Company Investment

Much like going to the grocery store and sifting through a mountain apples to find one without blemishes, identifying the perfect-looking company to invest in takes a good eye. To make your eyes a little sharper, take a look at these four ways to identify the perfect early-stage growth company investment…   1. Exit Strategy Does a startup have a clear exit strategy in place? It’s important that you as an investor know how you are going to make your money back and at what timeline. Without a clear direction or plan to generate returns for you, the investor, there’s little reason to dive into the opportunity.   2. Clear Ownership As an investor you must have a complete understanding of who owns the business and all of its intellectual properties. If there is any doubts regarding patents, copyright, or ownership of assets, your investment should be withheld until those issues are legally taken care of.   3. Sustainability Some early-stage growth companies can make a splash early, but disappear in just a few short years or even months. Conceivably, this could still prove to be a solid investment – if there is a swift exit strategy in place. But ideally a company should be able to demonstrate that it can play the long game.   4. Relationship Founders must be willing to work with investors and be available virtually at all times. A company may look great on paper, but any working or financial relationship which could become destructive or stressful may not be worth investing in at all. There must be a mutual respect between founders and...

4 Steps to Getting Your Early-Stage Growth Company Fully Funded

While it’s no secret that there are a lot of hungry entrepreneurs out there trying to get their hands on growth capital, there are a few simple ways you can separate yourself from the pack. Before you launch your next financing campaign, be mindful of these four steps to getting your early-stage growth company fully funded.   1. Start Months in Advance Give yourself plenty of time to plan the campaign, create top-notch content and coordinate the launch date. The growth leading up to the campaign can be argued to be more important as the growth during the campaign itself.   2. Understand the Customer/Investor Do your best to narrow your market down to as small as you possibly can. Envision your ideal financing partner and try to find people or organizations that fit that image. If possible, send out testers before pressing the start button on your financing campaign. Early tester feedback should be a big decider on your strategy ahead.   3. Offer a Lifetime Perk Offer your potential backers a lifetime perk. Maybe it’s free membership for life, or a lifetime supply of a particular product. It doesn’t have to be big, but these perks can go a long way in closing deals that are otherwise sitting on the fence.   4. Focus On Your Goal Write out and plan your entire financing campaign before you start anything else. Be organized and be ready for adjustments when necessary. Set your goals and don’t lose...

3 Keys to Identifying Good Corporate Culture Before Investing

Culture is a bit of a buzzword in the business world these days, and for good reason. There’s no surprise in the success of businesses like Virgin and Nordstrom — corporate culture is a humongous focus in the boardroom. Before you invest and partner with a company leader, take a look at these three keys to identifying good corporate culture.   1. Purpose What is the “why” behind the “what” in the business? Having a purpose constitutes vision, and having a vision enables passion. Before you invest in the next Mark Zuckerberg, make sure he or she has these not always inherent qualities. This kind of attitude often has a trickle down effect — before the troops can be motivated, they must be led properly by their general.   2. Agility More than ever, the ability to turn on a dime is crucial. Twitter once was a destination to find and subscribe to podcasts, Starbucks once exclusively sold espresso machines and coffee beans. Nokia made its earliest cash by churning out paper, Flickr was nothing more than a role playing game. At some point, these company heads decided it was time for a change. Be sure your partner CEO is open for a pivot if necessary.   3. Empowered Employees Richard Branson once said “Take care of your employees, they’ll look after your customers. It’s that simple.” Finding that impeccable customer service is simply found by giving employees authority and responsibility. As Nordstrom’s employee handbook famously reads “Our One Rule: Use good judgment in all situations…” This kind of treatment breeds loyalty, which in turn lowers staff...

3 Ways To Successfully Raise Capital For Your Early-Stage Growth Company

It doesn’t have to be difficult to get through to an investor. If your company is good, it will be seen. If your product is good, it will be tested. But as every investor knows, their decision to fork out the dough hinges on the competence and knowledge of the company owner at hand. Here are three ways to successfully raise capital for your early-stage growth company.   1. Make Sure Your Business Plans and Marketing are Solid This is probably the most important point of all. To have a clear and concise business and marketing plan means you understand the exact nature of your business and what it’s trying to achieve. If you know this, the investor can too. Have a solid plan about your leadership dynamic and how you plan to scale it. These are crucial points that investors will sink their teeth into.   2. Know Everything About Your Industry Know your industry with all of its nuances. Simply put, investors do not have the time or patience to put in this kind of leg work for you – the more you know, the better. If you are able to show investors that you know more than your competitors, that will surely go a long way in the decision making. It’s amazing what a little research can do. Delve into the history of your industry and look for patterns of success and failure.   3. Perfect the Pitch Honesty is the best policy. It’s cliché, but it’s the truth in this case. Many deals have fallen through after due-diligence. When you pitch, be sure to cover...

4 Amazing Traits to Look for Before Investing in a Founder

The gates swing open and off go the horses. When you invest in a early-stage growth company, there are a lot of variables to consider, but at the end of the day, you want to make sure you have your dough on a well-trained thoroughbred. To help you do so, here are four amazing traits to look for before investing in a founder.      1. Owns Failures People often avoid owning up to a mistake or failure, but if you’re about to saddle up your dollars with a company, make sure the founder is not one of these people. A good entrepreneur will never say “it’s my VP of Engineering’s fault.” Rather, they will take responsibility and truly learn the appropriate lesson and move forward.   2. Demonstrates a Sense of Fair Play Scaling a business will put everyone involved in exciting, yet high-pressure situations, The most damaging thing a founder can do is to leave his own team hanging. The founder needs to step up to the plate as much if not more than the rest of his squad. It puts a very sour taste in the mouths of employees when they are asked to report at the office seven days a week with the founder nowhere in sight.   3. Has a Strong Sense of Economics All good founders will have a strong sense of value exchange. When negotiating deal terms, a founder should ask what’s in it for me, and ask what’s in it for the other players. If the founder has a sense for win-win situations, you can almost be sure he/she has a...

4 Ways to Reduce Your Cost of Venture ​Financing

As the old adage goes, you need money to make money. It’s not any different for entrepreneurs looking for venture financing. With that in mind, take a look at these four ways to reduce your cost of venture financing.   1. Test Your Gut-Feelings Before you Launch This is not to say don’t trust your gut, but rather confirm or deny your gut. Many entrepreneurs make the mistake of diving into the market based on a series of good feelings. Those good feelings can take you in the wrong direction and cost you a lot of money. If you do nothing but trust your instinct, you run the risk of making poor decisions, which in turns results in poor financing. 2. Adjust After Launch You can do all the testing you want, it’s never going to fully emulate reality. Without a doubt, the best way to get true feedback is to actually launch, but with the ability to adjust where necessary. 3. Understand the Industry Especially in emerging industries no one really knows the rules to succeed. The key is to create opportunities for you and your business to be flexible. Let it be known that the ability to improvise may be the difference between business shut-down and business success. If a formula for success is known, imitate it and improve on it. Finally in an established market, find the strengths and weaknesses of your competitors and seek out unmet needs of the marketplace. 4. Learn What you Need to Know Most VCs prefer you, the entrepreneur, to have a team. A team insures investors that all the necessary...

Five Tips to Finding the Next Growth Capital Gem

It’s not an easy game to play. Startup winners can elude even the brightest of minds, but if one does manage to uncover the next Uber or Pebble Watch, that discovery can lead to significant high-yield returns on their investments. Here are five things you need to know before you find your next growth capital home run. 1. Stay With What You Know, Take Calculated Risks The best way to reduce risk is to understand what you are investing in. That understanding will be able to provide invaluable insight to the mechanics of the business and the investment itself. Make sure that the business has a scalable model so that it can grow to a level in which you will be able to get your money back as an investor. Long-time startup investor Kevin O’leary of Shark Tank says “I like to take risks. That’s how I make money. But they are calculated risks.” Take risks — without them, there’s no reward. But refrain from dumping dollars into something described as a sheer gamble. 2. Look For Founders Who Compliment You By in large, a startup business is only as reliable of the people running the ship. Drill into the founders’ backgrounds and get a sense of the kind of people you are working with. What’s their educational background? Previous companies? What can they bring to the table as a person and a professional? At the end of the day, you need to be able to trust the people you are investing in. The road to wealth if often not forged alone and as such, a smart investor will...

4 Things to Know Before Your Next Business Launch

With the onerous increase in entrepreneurial spirit, it’s never been harder to earn attention in the growth capital playground. Getting up and putting on your best smile just won’t cut it anymore. While those things are important, there are a few extras you can do to get a couple more looks in your direction. Here are four things you need to know before your next business launch.   1. Write a Press Release Press releases are a great tool to get your message across, and what’s more it’s completely free. Put together a well-written document that encapsulates your business, service/product and culture. Don’t bore readers with the mind-numbing details about technology or design, put something short and sweet together and send it out to as many relevant publications as you can.   2. Engage the Media Once you gather media contacts, start reaching out to them immediately. Just like a sales pitch, be ready to sell yourself and your business to the publications. Why should they cover you? What makes you special? Have good answers to these questions.   3. Don’t Forget Email Email is incredibly effective. If done right, an email campaign can be your most effective tool for engagement and conversions. Make a plan, make templates to follow — an introductory, a follow up and a welcome email. Though it might look inefficient on the surface, sending well thought-out emails can be the difference between success and failure in the growth capital world.   4. Create Multimedia Content Don’t just blog, make all kinds of multimedia content. Shoot videos, design flyers to hand out at networking events....

6 Tips to a Successful Crowdfunding Campaign

You’re an early-stage growth company and it’s time to raise some capital. While it has never been easier to get your business out to the investing masses, the competition never been more intense. Before you set out on your fundraising journey, take a look at these six tips to successful crowdfunding.   1. Video is Crucial but it Isn’t Everything Make no mistake, your video demo is the most important part to your crowdfunding campaign, but also be aware that it’s not a good idea to poor all your resources into the demo alone. Set a budget for your demo and stay within it. 2. Put More Focus on Story, Not Quality Sure it looks nice to a polished demo on screen, but good cinematography won’t win investors over alone. Focus on a good story and really sell yourself. In this business looking are not necessarily everything. 3. Pass the ‘Mom’ Test If Mom won’t buy it, chances are outside investors won’t either. Furthermore, it’s a good idea to go into a crowdfunding campaign with some backing to lean on – even if it is just from friends and family. Do your best to put some money in the bank early. 4. Share Encourage everyone to share your content online in exchange for a discount or a free product or service. 5. Set Achievable Goals Set reasonable goals that you can quickly reach – it establishes credibility early on and provides momentum. Set a target you can reach within 24 hours if possible. 6. Mobilize your Targets Before launching your campaign, it’s a good idea to get together an...

3 Reason Why FinTech Will Remain a Strong Option for Borrowers

This is the time to be an entrepreneur. Never has it been easier to register a business, engage the public and perhaps most importantly – raise money. Thanks to the (rather sudden) rise of the FinTech marketplace, thousands of entrepreneurs are able to participate in a streamlined lending process that’s no longer bogged down by tedious paperwork and idle time. Here are three FinTech Developments that will continue to benefit borrowers in the long run.   1. ALL Generations Are Now Embracing and Relying on Mobile Tech From checking weather reports to doing some last-minute holiday shopping, we are using our mobile devices for virtually everything. Thanks to FinTech, we can now lend and borrow just as conveniently. The nine-to-five banking and financing days are all but completely minimized. Most early-stage growth companies are strapped for time, but their need for financing is arguably greater today than it ever has been before. Businesses are looking to skip the chit-chat and use their time more efficiently – especially Millennials.   2. Despite Looming Interest Rate Hikes Ahead, Entrepreneurs Will Still Seek Capital Entrepreneurship is not going anywhere. Furthermore, higher interest rates make it more profitable for conservative lenders to open up the purse strings. When lending is profitable, banks will provide capital. This is likely to cause a significant spike in fundraising interest in general and businesses will listen to all options on the table.   3. The Industry is Retooling and Becoming More Reliable Despite scrutiny, the FinTech industry is without a doubt working. Growth companies are receiving funding and lenders are being rewarded with hard profits. It’s a...

3 Steps To a Perfect Elevator Pitch

Even if you know your product/concept inside and out, there are still many potential pitfalls to speaking in front the throne of venture capital. It’s not the time to be short-sighted, it’s best to understand your product through the eyes of someone else. Here are three steps to a perfect elevator pitch.   1. Narrow Your Idea Down As the old adage goes, less is more – and the same is true in this case. You never want to give up your whole pitch right off that bat. Find a good opening sentence and let it sink in among your audience. If they ask anything further, mission accomplished. If you are having trouble narrowing it down, ask your friends and colleagues how they would describe your product. Get an idea of what others have to say about it.   2. Ask a Question In any presenting capacity, it’s often effective to engage your audience by asking a question. For example: “Are you familiar with Uber?” The obvious answer here is yes, and now you can follow up with something like “we want to be the Uber of parking in major cities.” It could be anything. This allows you the pitcher to get your concept across quickly and effectively, which more often than not leads to followup questions.   3. Be Calm and Listen After your postured up and got your short and sweet message across, it’s time to listen carefully. One common pitfall is giving into the urge of rambling about the details of feature A, B and C and how they will change the marketplace forever. Before you...

4 Red Flags to Avoid Before Investing in Your Next Early-Stage Growth Company

There are many early-stage growth companies sprouting from rich, plush entrepreneurial soil. But as the number of those sprouts rise, it can become harder to identify which ones will one day wear the thorns. Luckily there are many hints on the surface that can save you from getting pricked. Here are four red flags to avoid before investing in your next early-stage growth company.   1. High Burn Rates If revenues are not steadily rising on a month-to-month basis, watch out for overhead and high expenses. Profitability always prevails as the single most important thing in business and as such, the very first dollar the company is able to generate is extremely important.   2. Lack of Support From Early Investors If the company has already raised capital in their earliest stage, it can be very telling if the majority of investors are not reinvesting. There are many reasons for such an outcome, but you need to nail down why. Maybe the investor(s) simply ran out of capital to contribute, or maybe there’s something else. The key is to learn the reasons behind the facts.   3. Too Many Founders Now, it’s okay if a company has more than one founder, and actually, it’s preferred by many in the investor market. It’s hard for just one founder to attract enough A+ talent to run a well-oiled machine firing on all cylinders. However, be cautious when the number of founders climb over three. With so many egos left to handle the growth and execution of the business, the growth process can actually lag and even come to a stop. The...

4 Secrets to Pushing Your Early-Stage Growth Company Ahead of the Crowd

It’s never been easier to start a business, and with the growing access to funding portals, it’s never been easier to raise capital. Having said that, never has there been more competition than there is today. With that in mind, we want to offer four secrets to pushing your early-stage growth company ahead of the growing and bustling crowd. 1. Crafting a Lean Business Plan Remember those big, bulky, text-heavy business plan documents? We have happily moved on to a time when those are no longer necessary. As such, avoid having a document such as this. Investors and partners now opt to look only for a framework of your business. They will delve into the essentials of the business within the context of your product, solution in the marketplace and financials. Forget the big document, just be sure you can fill in those blanks.   2. Incorporating a Business Entity Early Through Online Services Create a C-corporation online and do it quickly. Not only can this be done at low cost, it also saves time waiting for an outside attorney. It’s a great idea to do this before you decide to raise capital and bring on partners.   3. Establishing Your Brand Social Media The obvious benefit here is cost – it’s nearly non-existent. Building an online image is a process and this should be started even before you develop your product. By doing this you can track early customer feedback and find where to make appropriate pivots in the marketplace (if necessary).   4. Measuring Progress With Data & Analytics First, set your milestones and aim for them...

4 Business Models Which Can Offer High Yield Returns for Venture Investors

A business model is at the heart of any business venture. No matter how attractive an investment opportunity appears, it must have a solid way of making money to be worthy of investment – a clear and easy to follow A to Z. There are many different types of business models out there, but here are four which can offer high yield returns for venture investors.     1. Demand Orchestration Demand orchestration will have a business acting as a third party. This business model creates a location for buyers and sellers to make transactions with each other directly — the business earns a percentage of the monetary exchanges. The most influential example of demand orchestration is eBay. eBay was able to create a platform which provides a vast number of options for buyers and sellers, and by doing this, they were able to attract a huge user-base. This user-base eventually became very attractive to first party services and products.   2. Low Prices Offering low prices allows a business the opportunity to attract a large share of the marketplace simply because its products are a little easier on the wallet than their competitors. As the business grows, it can develop product upgrades, new ideas and even better service. The idea here is to grab substantial attention from a noisy marketplace. Once that’s been done, and the trust of the market is earned, the business might then increase its prices without losing too much from its share.   3. Reverse Auction This business model involves buyers offering a price for a service or product. If the seller accepts then...

3 Dos and Don’ts of First-Round Fundraising

It’s easy to increase your chance for success, all it takes is a little thought behind your fundraising strategy. Your aim heading in should be to prove your concept / company in the market without parting ways with more equity and control than necessary. Before you pave your path to investor dollars, here are three do’s and don’ts for first-round fundraising.   DO: Prove Your Concept With as Little Capital as Possible The key word here is prove. To an investor, it’s far more useful to hear that you have tested your concept and learned ABC as result. You do not want to simply say “we believe our concept and we believe there is a place for it in the market.” It’s also worth noting that funding decisions often hinge on the entrepreneur, not just the idea itself. Exude hunger to test your concept in the real world rather than just waiting for someone to validate your business for you. One inexpensive way to do this is dedicating a few hundred dollars towards a pay-per-click campaign that targets keyword searches relating to the problem you are trying to solve in the marketplace. Collect this data and show interest based on how many visitors mature into mailing list subscribers.   DO: Build Traction It’s nature, a first-timer in anything will be held to a higher standard than those with a proven track record. The same goes for first-time entrepreneurs — you need to build traction. Prepare your product and demo it, and once you do, ask for feedback. Not only does this provide invaluable insight from the marketplace, it allows...

Top 4 Venture Capital Predictions for the Latter of 2016

The last couple years in particular really changed the venture capital game. Higher deal volumes, easier accessibility to venture capital and shorter roads to finding an early-stage company gem to invest in. With 2014 and 2015 being such game changers, we thought it appropriate to roll out a short list of venture capital predictions for the latter of 2016.     1. Rising Deal Volume In 2014 and 2015, the startup realm saw a very high volume of deals. Expect this trend to continue into 2016, with an increase in deal volume. However, despite a probable increase, the total dollars invested is expected to remain the same. This is by virtue a fewer companies needing late-stage (larger) investments and more early-stage companies needing smaller investments.   2. Crowdfunding Boom Big investor interest and government legislation have rolled out the red carpet for crowdfunding, which is likely to facilitate a big jump in crowdfunded financings in Canada this year. As point number one alluded to, there is an expected rise in early-stage company growth and a big reason for that is the new found legitimacy and accessibility to crowdfunding.   3. More Attention From the U.S. It’s already happening. The weak Canadian dollar is bringing big attention and activity from U.S. venture investors. With the Canadian dollar expecting to struggle, this trend is likely to rise pretty exponentially, especially in the Series B stage of investment. Will the exchange rate affect the startup community in other ways? There are benefits to a lower Canadian dollar for companies that have U.S. dollar revenues and Canadian employees.   4. Bigger Deals Expect...

3 High-Impact Tips for Successful Negotiations for Early-Stage Growth Companies

Negotiation is a fundamental part of the early-stage growth experience. Unfortunately, many executives and/or business owners fall victim to mistakes that make their negotiations incredibility ineffective. Here are three tips to avoid getting the short end of the deal or losing it all together.   1. Don’t be Greedy Greed is the biggest and most fierce of the negotiation killers. If one party pushes for too much or is too aggressive, the relationships between those involved goes south very quickly. Yes, it’s natural for people to pump the value of their product or position in a negotiation. But know this — it takes a special skill to recognize your own greedy behavior and stop it before it derails the task at hand.   2. Understand the Type of Negotiation You’re Participating In There are two types of negotiations that can happen in the business’ life cycle. The first can be identified as asset negotiation, which is usually the wheeling and dealing of a one-time transaction. Take the sale of an asset like a piece of equipment for example. The seller wants to get the best deal possible usually with or without a positive personal relationship with the buyer. After all, once the deal is done, the relationship (whatever that may be) will also cease to exist. The second type of negotiation is a lot different. When both parties involved have to maintain a working relationship long after the negotiation ends, the strategy automatically becomes more complex. In these situations, it’s important to remember that things such as trust, respect and admiration have tremendous value in the negotiation process, and...

The 4 Biggest Threats to Seed VCs

It’s a good exercise for companies step outside of the box and a really take a look at their competition. It allows for a good level of intellectual honesty about one’s position in the market and how they can combat their obstacles — as the adage goes, knowledge is power. With that, for your benefit, we put together a list of four common competitive obstacles to seed VCs. 1. New Competition This is one is a no-brainer, but it’s important to be aware of your competitive surroundings. The VC landscape is very different today, there are many more funds to compete with than there was let’s say five years ago. And although you may be sitting at the peak of your respective sector and geographic, there are many funds hungry for a piece of the action. 2. Skipping Straight to A Some founders are able to leap past an institutional seed round and go straight to a multi-million dollar A-round where a larger VC puts in a large share of the capital. This can happen either because the founder can boost the company with his/her own resources to get further, or because the company (and team) is so captivating that a large fund can lead a series A right away. There are positive and negatives to this approach, but without a doubt, it’s becoming more prevalent in today’s startup universe. 3. Non-Institutional Leads High-quality institutional investors may be interesting in investing in a company at fair valuation, but that doesn’t stop non-institutional investors from set terms 1.5 – 2 times higher than that valuation. Founders, more and more, are...

The 5 Best Ways to Spend Your Startup Capital and Get Your Voice Heard

So you ran a successful crowdfunding campaign? There’s no time to rest on your laurels, it’s time to put that capital into motion. But what do you do with it? If you are stuck thinking of cost effective ways to get your company’s voice heard, take a look at these five ways to spend your startup capital.   1. Pay for Social Media So you can get a lot from social media for free, but boosting a post on Facebook or promoting a tweet can substantially increase your reach and bring new prospects. And you can do it for just a few hundred dollars a month. 2. Invest in Media Gimmicks Spend some money, or give it away, to make some noise. May you can host a contest and donate to the winner’s charity. Or fly them somewhere. Perhaps host a dinner? Open bar for industry insiders? Fund a scholarship? The public is way more likely to pay attention when there’s something in it for them. If you have a good idea, you can make some waves for as little as $1,000. 3. Google Ads and Content Marketing Many customers know what they want and what they’ll find on Google. It’s tough to get the traffic if you are a startup. But thanks to Google ads, you can get right up in the faces of your target market. There are experts–both at the websites and at independent places–who can help you get setup. For as little as $1,000 a month (for six months, for example) can really pay off in traffic and awareness for your company. 4. Conferences and...

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