Saturday, March 16, 2019

3 Essentials to Funding




3 Essentials to Funding

1.     Not Just Big – Scalable
Your idea must have the potential to grow big in order to get Investors interested. They need a minimum of a 10x return to break even on their overall investments. Even then, they are looking for promises of more because they know how often even 10x projections fall short.

2.     Traction: Some Proof of Acceptance – Patent/Likely Acquirer
Your idea might be brilliant but if no one wants it you dont have a business. Find a way to show that customers of some kind somewhere want it. Otherwise you are relying on the judgment of Investors and they are not likely to trust their judgment unless you can show them there is a line of willing takers somewhere. Patents that are likely to interest partners or protection against competitors, help too!
  
     3. Execution: A Team That Can Make it Happen and a Comprehensive Plan
Ideas dont come alive on their own. Either you are uniquely qualified or you can attract a team to make our plan work. Ultimately, the Investors are likely to choose doers over thinkers. Ideas dont get funded but people with ideas do. If you can show that you know how to get things done and get a competent team to follow you, even a mediocre idea can get funded


Thursday, February 14, 2019

What are your thoughts about the lost Amazon deal in New York?

My comment in the NY Times about the dead Amazon deal in LIC.

"Congratulations!

You should be a happy as the New York longshoremen who chased the container industry to Elizabeth, New Jersey in the 60's.

Now, there are bars and no cargo ships in Brooklyn.

Prediction: Nashville will make a country celebration album with high tech effects. 
(New Yorkers can get it by same day delivery - thanks to Amazon Prime.)"

http://www.nytimes.com/2019/02/14/nyregion/amazon-hq2-queens.html?comments#permid=30618947"

Tuesday, August 28, 2018

VC Hacks - #1: Why Investors Only Give Your Idea 10% of Their Attention


What to Do About the Other 90%!             
  
When I hear a rambling pitch that gets lost trying to describe every detail of a new idea, I have to wonder: if only you knew what little time the investors will actually spend discussing it!

If they ever do talk about you, the only question they will be asking each other is: how can we make money out of it?

If they think your idea has that potential – vast growth, solves a big problem in a credible way, maybe if this is a new and incredibly intriguing product or just that you, the entrepreneur is uniquely qualified to take on a specific market – guess what:

They are going to reduce that to one sentence.

Then, they just as quickly, they will stop talking about the idea and start talking business.
  • What does it cost to acquire customers (note, they never mention viral, because they don't believe in it!)
  • Is this enough money required to get it off the ground?
  • How big can this be and how much would they likely recoup?
  • Who would acquire it? (No one really discusses IPOs and never, ICOs)
  • How big is the competition and can they reasonably be faced? (If the competition happens to be Google, Apple or Microsoft, go home.)
  • Can this entrepreneur (and team) really pull this off?
Conclusion:
If you knew just what sentence Investors will use to describe your company, you would be way ahead of the game! (This is why we hold Capital Raising Workshops.)

Instead of fussing over every last feature in your offering, you would get down to the issue of what makes you and your team good enough to make this fly, exactly how you plan to do this and with how much.

Then, you can talk about the probable growth path and exit – who is likely to buy you, why and when.

Thursday, August 9, 2018

Why I think the Uber/Lyft Regulations are a much bigger debate than we realize.


Why I think the Uber/Lyft Regulations are a much bigger debate than we realize.

And it opens the door to Blockchain politics.

http://www.nytimes.com/2018/08/09/nyregion/uber-nyc-vote-drivers-ride-sharing.html?comments#permid=28172202
 
 
Forgotten in this discussion is the reason why yellow cab medallions became so valuable. City Hall was the bumbling architect of their rise and their collapse.

By limiting the number of medallions, the City established a monopoly, created scarcity and then let investors drive up prices. At one point, a taxi medallion was worth more than a seat on the stock exchange.

In return, yellow cabs dominated just the parts of the City that were most profitable and abandoned the rest.

When Uber and Lyft upended this, the City failed to make good on the monopoly it created and compensating for its loss, thereby leaving small cab owners suicidaly in debt.

Legally, the City has indemnity, but this issue will not go away.

Government still has the right to create false monopolies that technology will continue to disrupt. Very few politicians understand this other than creating new regulations that are generally too out of touch to matter.

It is also quite likely those regulations will be deeply influenced by special interests, leading to further public distrust.

Uber has shown that, by being truly useful to the public, even government with all its power and moneyed lobbyists can't stop them.

The real problem is not Uber but government itself and the outdated limitations of the two-party, management vs. labor debate and the backroom system supporting it.

Today's generation sees Blockchain, open ledger legislation, voting and Cryptocurrency as opening up government to the people.

Friday, June 15, 2018

Why Your Pitch Should Be Less Than 4 Minutes

We hear this over and over again: “What, only 4 minutes! I need more time than that.”

The simple answer is – you don’t. Abe Lincoln once said to a friend “if I had more time, I’d have
written a shorter letter.”

Being succinct is actually much harder that being long and rambling. Above all, it is much appreciated by investors.
In fact, a crisp pitch is generally seen as the sure sign of a credible entrepreneur. Even ones with mediocre ideas tend to get funded.
There are two major reasons why short pitches work.
Reason 1: If you can’t interest an investor in 30 seconds you probably don’t have anything they’d want to invest in. Or, you really haven’t found what makes your plan interesting and so you are slinging ideas in the hope that something will stick.
Most of all, the discipline required to distill your idea down to a 30 second hook for investors is an extremely useful way to sharpen your thinking about the execution of your plan.
This is why we offer our free Are You Fundable? Capital Raising Workshop and book – to help you distil your idea in a way that investors understand and are most likely to find attractive. Obviously, not all ideas are attractive to all investors but once you know what you really have from the investors' point of view, you understand just who is likeliest to fund you.
Reason 2: Your job in a first pitch is not sell the business plan but to get investors interested enough to know more. Investing in a startup is not an impulse buy. There are many boxes to be checked before that term sheet goes out. However, taking a liking to an entrepreneur and the possibilities of their idea certainly does happen on impulse and your job is to nurture that without overwhelming them with too much detail and dubious claims.
Pitching is a game of attraction that works by building trust with credible blocks of information. When investors feel comfortable with all those points, checks get written!


Wednesday, June 13, 2018

Why Your Pitch Should Be Less Than 4 Minutes

We hear this over and over again: “What, only 4 minutes! I need more time than that.”
The simple answer is – you don’t. Abe Lincoln once said to a friend “if I had more time, I’d have written a shorter letter.”
Being succinct is actually much harder that being long and rambling. Above all, it is much appreciated by investors.
In fact, a crisp pitch is generally seen as the sure sign of a credible entrepreneur. Even ones with mediocre ideas tend to get funded.
There are two major reasons why short pitches work.
Reason 1 is that if you can’t interest an investor in 30 seconds you probably don’t have anything they’d want to invest in. Or, you really haven’t found what makes your plan interesting and so you are slinging ideas in the hope that something will stick.
Most of all, the discipline required to distill your idea down to a 30 second hook for investors is an extremely useful way to sharpen your thinking about the execution of your plan.
This is why we offer our free Are You Fundable? Capital Raising Workshop and book – to help you distil your idea in a way that investors understand and are most likely to find attractive. Obviously, not all ideas are attractive to all investors but once you know what you really have from the investors' point of view, you understand just who is likeliest to fund you.
Reason 2 is that your job in a first pitch is not sell the business plan but to get investors interested enough to know more. Investing in a startup is not an impulse buy. There are many boxes to be checked before that term sheet goes out. However, taking a liking to an entrepreneur and the possibilities of their idea certainly does happen on impulse and your job is to nurture that without overwhelming them with too much detail and dubious claims.
Pitching is a game of attraction that works by building trust with credible blocks of information. When investors feel comfortable with all those points, checks get written!

Saturday, April 7, 2018

In the News: Startupalooza™ Winner Aims to Launch Space Hotels - $792,000 a Night!


The winner of Startupalooza™ Silicon Valley was all over the news after they announced the plans which won over our skeptical Investors in December. 
 
Congratulations! Welcome to space, guys!
 
Orion Span was all over the news today after they accounced their intention to open "hotels" in space. The numbers were staggering but investors saw this as a real possiblity and for now, a prestige investment - something to brag about if you have a millin or two to spare........

See Orion Span's media coverage.

Do you have an idea that's out of this world? We might have the same opportunity for you:

You can pitch this on Monday, April 9th at Startupalooza™ San Francisco at Twitter, 1355 Market St. from 6:00 - 9:00 pm. REGISTER

In L.A? Pitch this on Tuesday, April 10th at Startupalooza™ Santa Monica at ExpertDOJO, with our famous Capital Raising Workshop from 3:30 - 5:30 Pitching from 6:00 - 9:00 pm.  REGISTER

www.startupalooza.com

About Startupalooza:

This long-running series of events gives every Entrepreneur a chance to pitch. With over $10 million raised for Startups in 2017, these pitching programs have has recently expanded from the East Coast to Silicon Valley and L.A. and is drawing a new generation of exciting deals.

These monthly introduce Entrepreneurs and new Startup ideas into the national Angel Investor community.

About Orion Span:
Orion Span's Mission is to Build and Sustain Human Communities in Space Accessible to All.  Through technological innovation, Orion Span cuts the cost of living in space by an order of magnitude over others. We will not rest until our shared destiny in the stars has been realized.