I'd be interested to know what those of you who are entrepreneurs think about these questions. They can be the start of an informative discussion for all of us:
1. What do you think the highest risk is that you face(d) in your start-up phase? How did you deal with it?
2. What are your best tips about raising money for new ventures, including bootstrapping ideas?
3. Should angel networks charge entrepreneurs for reviewing their plans, and if so, what's a fair price?
4. If you were to pay to have your plan reviewed, what would you expect to get, aside from "yes" or "no" ?
1) My highest risk in our company has been and continues to be the balancing act of managing product development costs and customer requests for enhancements.
Software is a living breathing asset that needs to be nutured, but without a shower of return on investment, the asset with die of thirst.
Afterall a great piece of software that no one is using is not really that great!
2) Sell, Sell, Sell- What helped me the most was being able to tell people that I had paying customers. Concurrently, throw as many irons in the fire in terms of meeting potential investors as you can. Getting a check from an interested party takes time and the sooner you plant those seeds, the sooner they will germinate.
3) I've been able to get such insight free with my charm, so I guess I'm biased, but I'd pay if the person knows the industry. I would say if your elevator pitch is not good enough for a free review, you should look in the mirror.
4) I would hope an experienced entreprenuer would provide insght into similar revenue models as well as a reality check on expected COGS and operating expenses. Also, I'd look for the person to provide me with people in my respective industry that I could talk with to expand my awareness of competition and niche markets.
Posted by: Shane Krukowski | April 24, 2006 at 03:55 PM
The highest risk in the start-up phase for me has been prodcut acceptance. I tried dealing with it by bouncing off of family and frineds. However, you never know if they are telling you what you would like to hear or if they are tellign you what they really think. In the end, I pulled together a focus group and received great feedback. So, I guess I still don;t know if my friends and family were all telling me what they really thought because they were extremely positive as well.
I guess I am in a position where I need the capital raising tips. I need large sums of money to bring my product to market correctly and the VC's may or may not be willing to look at it at this point. I am trying to discover the answer to that question right now. Based on the impartial third party feedback, I believe I have a product that will fly. However, given the market, the VC's have to believe the same thing and they see so many business plans that you I believe you need an introduction to get them to pay attention.
I don't believe angels should charge for reviewins plans. That woudl probably preclude a lot of good ideas from getting to them as most people come seeking the angels when they are out of other options. It would probably preclude angels from seeing some of the investments that have allowed them to reap the harvest they have; therefore, their payback expectations may rise and it woudl further preclude deals from happening. My personal opinion is that the angels need to build their pay for review into the expectations of payback if they want to see opportunity.
Posted by: Bob Bascom | April 28, 2006 at 03:46 PM