Posts Tagged ‘Startup company’

Asking for money?

Monday, September 28th, 2009
Google Buzz
Banknotes from all around the World donated by...

Image via Wikipedia

This is a guest post by: Brad Christen from CW Consulting

For startup companies, raising your first dollar is the biggest challenge: everyone is hesitant to place the first bet on a new company. Luckily, there’s a range of people out there willing to help – from investment groups and consultants to well-connected friends and registered broker dealers. But even if you’ve enlisted help in your search for capital, on many level you’re still going to have to be involved in the fundraising process.

And all too often, in spite of an entrepreneur’s passion for their project, they aren’t psychologically prepared to “ask for money”.

That’s quite OK, entrepreneurs should never ask for money. They are selling a stake in a new opportunity. They are inviting people to be part of an exciting venture. And they have to practice their pitch until it’s as familiar and unforgettable to them as a sit-com’s theme song.

There are three psychological tricks that entrepreneurs can employ. First, collect “no’s.” Make it your mission to hear the word “no” as many times as you can. Set a daily goal of how many times you want to hear it. Second, tell everybody what you’re doing. If a bank teller, a UPS delivery person or a pharmacist asks “how are you doing?” don’t say “fine.” Tell them exactly how much money you’re raising for your new venture. Third, build a movement. Replace “How many shares can you buy?” with “How many people can you find who be right for this kind of investment?”

The key is to stop asking and start telling. We’ve seen these tips transform entrepreneurs time and again. And we’ve seen how investors respond positively to entrepreneurs who have overcome any fear of rejection when it comes to financing their startup.

Are you still “asking” for money?

Related articles by Zemanta
Reblog this post [with Zemanta]
  • Share/Save/Bookmark

Tags: , , ,
Posted in inspiration, learning, resources | Comments

The process from idea to competitive startup

Tuesday, July 21st, 2009
Google Buzz
Startup Financing Cycle
Image via Wikipedia

Building a successful startup from an idea to successful launch and beyond is a mysterious process for many. There is so much information out there and it can be very difficult to obtain what is the right information for you.

First, it’s important to understand that depending on what type of company/business you are starting or launching, the process can be very different. Also we have intentionally left products, customers and other business related parts out of this process outline, to be able to focus on the other aspects of startup development.

In our Grow VC service, we are focusing on the type of ideas and companies that cannot normally use traditional funding solutions like business loans. The reason why these ideas don’t fit that type of funding is that the idea is so risky that there is no other reasonable option than to try it on the real market, and typically this kind of companies have no material assets to be a collateral. So, some sort of risk funding is needed.

When it’s risky to see if the idea will gain traction and momentum, the only logical thing to do from a risk funder’s point of view is to minimize all the other related risks involved, making sure that the idea will have the best possible chance of success.

This usually requires ensuring the team behind it is great, the timing for the idea is right, competition is manageable, and the most important item, “protecting the idea,” would be possible. However, the last one is becoming very difficult in today’s fast changing world and also less meaningful if the business can quickly gain critical mass (like a user base). It is also more and more difficult to patent and protect ideas and components in our “open source world.”

So based on these assumptions, we have outlined the process of building a startup that would have an optimum chance of success from the funding and growth point of view. And we are building our service by focusing on making this process as effective as possible, with the best outcome, when looking at the long term goal of international success.

Building the successful start-up

This process is the core of our Grow VC service development. This can be over simplified and there are many other factors as well. But I think it’s important for us to explain the main process that we at Grow VC focus on.

Building the succesful startup

  1. The first risk to avoid is to be too dependent on one entrepreneur where one would have such ownership that he or she alone could make all decisions. So the core structure / ownership will need to be built, so that also looking from a funders point of view, there is more than one committed entrepreneur. So at least a core team of two or three is advised (since a 50/50 split can be problematic as well). More than three depends on the business model, roles, ownership %, etc.
  2. Other team members. The next step is getting various other contacts committed to support and offer expertise and funding when needed, without too much effort. These people can typically be friends, ex-colleagues, business contacts, family and other close contacts that you have built. They are the type of contacts that you know and they know you. So real trust is based on those relationships.
  3. Next you will need other outside experts that are not in your personal, inner circle. They are the ones bringing in the “outsiders viewpoint” and the contacts that would normally be out of your reach without a bigger effort. You must be able to convince enough of these types of people and get them involved with your start-up as well.
  4. When you have shown traction with external experts , and they are committed to help you by sharing their contacts and expertise and recommending you to others, your startup has reached a level where you are starting to look more appealing to funders. Of course, this is only looking at your startup structure and people involved with it. The value of the idea and the quality of your product must be competitive as well.

Many times the roles between your contacts, experts and funders are not that clear, i.e. in many cases your original founders may also be funders, experts can be funders, etc. But overall the type of structure you will have at the end should look something like the above.

In Grow VC we will have components that are linked to different kinds of funding models in this process, e.g. the different roles for founders, funders, and experts, and tools to manage the process in different stages. For all the other elements in this process that are important but not core for us, we are looking for partners to join us to provide various solutions, services and expertise.

Some of the roles for our partners are already well defined and some of them are more open or not yet defined. If you are interested in partnering with us, please contact us and let’s see how we can cooperate in order to make the experience even better for everyone.

What do you think? Let me know in the comments below, if you feel I have left out some crucial elements that should be added to this.

In future posts, I will go focus to each stage of this process in more detail.

Related articles by Zemanta
Reblog this post [with Zemanta]
  • Share/Save/Bookmark

Tags: , , ,
Posted in development, resources | Comments

CEO Update

Friday, April 17th, 2009
Google Buzz

profile_bigger1It’s been a while since the last Grow VC update post, so I think it’s time to share some insight on what’s been going on in the past months. First a bit about our schedule.

Last December I wrote:

“We are planning to release the first part of Grow VC service in Q1 2009. At that time we will start accepting funding applications from new “web startups”.

Starting from Q1 we will be opening the business model with wider group of people under NDA, as part of the process on creating partnerships and co-operating agreements with various parties that will be connected to Grow VC.

The actual Grow VC service and business model in full, is planned to be launched by the end of Q2 or early Q3, 2009.”

In regards to that, we are pretty much right on schedule. However one thing have changed and that is that we will not start accepting applications yet at this point like we originally planned, but will start accepting them at launch time. So that we can offer better tools right from the beginning and also be more clear what our service is about when submitting your application.

Other parts of the above details are still on track, meaning that by the end of this month we are planning to open our protosite for a limited group of users and that the actual service launch we are aiming for the end of Q2 (first as a closed BETA by invitation only, more about details at the bottom of this post).

Big developments in two areas

Our development has basically been split in two main areas, where the one part is the actual software development and the other is company developments like our team, company & partner structures and agreements etc.

Some things you may have noticed here already, like some new people introductions, new logo and overall visuals. Of course what you see outside is just a tip of the iceberg – a huge majority of the stuff is going on behind the scenes. But before talking about that, I should tell a bit more about our team.

About Company developments

At the very beginning (late summer 08) in the initial idea and concept stage, our team was basically Jouko & myself. After we had hammered on the idea long enough to decide that we want to get this idea of the ground, we then started to build our Grow VC core team. On top of our roles as founders (doing everything that needs doing), we needed to cover the roles of great programmer, designer/UI expert, legal & PR.

Our first goal was to get our core team established before beginning of this year, so we could start pushing forward with confidence that

  • a)    we can find more good people to join and
  • b)    that all of us see the same vision and commitments to our goal of launching the Grow VC service.

After going through several candidates for each role of our core team, we feel that we now have an excellent team in place, so I think now is a good time for introduction:

Valto Loikkanen, CEO/Founder
Valto Loikkanen is a serial entreprenuer who has started several companies across Europe and the US in the web and mobile fields. At the age 24, Valto started and grew his first company VTG Worldwide, selling custom mobile phone covers, from the ground up into an international business turning over 84 million FIM. Forward thinking and always seeking the next big web and mobile success, as a serial entrepreneur and startup advisor, Valto got fed up with the lack of transparency and openness in the startup funding process. Web 2.0 companies often need only small amounts of money to grow, due to the cost-effective nature of their business models, and the investment market hasn’t historically been suited to raising small amounts of capital. Valto saw that with Web 2.0 taking hold, lack of transparency no longer works in helping the Internet’s shining stars find their grounding. Wanting to battle these challenges, Valto founded GrowVC to apply the principles of web 2.0 to the area that has historically been sorrouded in mystery – VC funding. He aims to bring a better, fairer environment for technology startups seeking funding.

Jouko Ahvenainen, Chairman/Founder

Jouko is an investor and entrepreneur across the US, Europe and Asia and is active at a senior level with many web and mobile enterprises. With more than 15 years experience in international business management and having been close to many VC deals in past, ranging from 150k USD to 15M USD, Jouko is passionate about the challenges in finding and supporting the next great venture. Jouko believes that 2.0 will significantly change all business, and finance cannot avoid that change. Now is the time to create new open models to accelerate early phase company funding.

Starting his first software company at the age of 16, Jouko then held progressively senior positions at diverse technology firms including Cap Gemini Ernst & Young, Powerwave Technologies Inc., Nokia, and Sonera. He is a pioneer in the field of social media marketing, and played a significant role in developing the first social marketing intelligence solutions for mobile and media companies. Jouko is on the boards of various start-up companies and is a co-founder or seed investor at six companies, including Replicon and Xtract. Jouko is a certified advisor for NasdaqOMX Stockholm and Helsinki early phase company lists.
Jouko regularly speaks at marketing, start-up funding, mobile and web 2.0 conferences including Mobile World Congress, CTIA, and Informa, IIR and others’ conferences around Europe, Asia, and the US. He is also a co-author of the Social Media Marketing book (Futuretext, London, Feb 2009).

Jouko holds an MBA from Helsinki School of Economics, a joint program with McCombs School of Business, at the University of Texas, Austin and a M.Sc.(Tech.) from Helsinki University of Technology.

Gal Smolar, Legal Counsel
Gal is an experienced transactional lawyer who brings extensive experience with funding deals and setting up funds around the world, currently based in Israel. Gal has International experience in acquisitions, dispositions, joint ventures and investment transactions. Bringing excellent contract drafting and negotiation skills in areas such as general corporate matters, licensing, research and development, Gal also advises on transactions and other operational activities.

Christoffer Langenskiöld, Chief Experience Officer
Chris is an expert in user experience bringing a solid background in usability, visual, and marketing planning and implementation. He has strong focus on the user-centred, goal-oriented concept design of websites, interactive demos, UIs and mobile applications. He is currently based in Finland.

Jussi Holm, Chief Technical Officer
Jussi has extensive hands-on experience developing and implementing web services that require good usability and high design reliability, currently based in Finland. Jussi’s previous work includes web software design and development for #CMAX.gg Gameserver Marketplace.

MSc. studies in communications and software engineering at Helsinki University of Technology give Jussi a solid understanding on the potential of Web 2.0 technologies, and his vision and experience in agile development methods allow him to turn that potential into reality.

Emily McDaid, Head of Communications
Emily has senior-level global communications and PR experience from the UK and the US, and started her own successful PR business in 2008, currently based in England. Over the past decade Emily has led communications for hundreds of technology companies ranging from the very established (Virgin Media, HP, The MathWorks, S1) to the most innovative startups (Xtract, Huddle, Doodle) and IPO cases (Mobestar). Emily began her work in PR at the esteemed CSAIL at MIT and has a degree from Johns Hopkins University in the US.

Team effort

One feature that we needed to build our structure was for our team to be international, with international experience. So now our team includes people from Finland, USA and Israel, with work experience from all over the US, Europe and Asia and from various different countries.

On top of this we have also been building our advisory board to help us out in our business strategy and connection in different regions. Our advisory board members areas of expertise cover, legal, investment banking, venture capital and angel investing among other basic international business expertise.

As we have finalized our company structure and internal agreements between advisors, we will start introducing them via this blog as well.

Also one big discussion has been the location or locations from where the business will be run. So we have been doing due diligence for the company location itself. More about that later.

Software developments

In software side our progress have been steady and we are starting to see very finalized looking software, sure there are still tons of things missing and needed to fine tune, but it’s starting to come together well.

As said in the beginning of this post our goal for launching the service has been June 2009 and that continues to be our goal. So far it’s looking good for us being able to achieve that and we are all very anxious to get there :)

That said, 10 months from just having an idea to building a great team and launching an actual service isn’t that bad.  Even we feel on weekly basis that we would like to just reveal everything, we are keeping our cool. One thing that helps us do that and not become overly nervous on spending our time and money, is the great feedback we have and keep getting, as we do our limited introductions of our concept during the talks with potential partners, advisors and people throughout the market.

More about our roadmap to launch

It’s now April and this month we are looking to invite limited test users to our proto site, to test our service and give us feedback before our closed beta launch in June. Test users will be invited from our supporting sites members, LInkedIn groups, friendfeed room and from members that have joined via friend connect at our site. So if you are looking to be invited, you may want to check that you have joined one of those.

For the closed beta launch we will be offering invitation codes for blogs that regularly cover web startup, entrepreneur & VC related topics. With these invitations, these blog readers will get entry to our closed beta and these invited users will also be converted to normal user accounts for free (subject to normal approval). If you are running a popular blog that regularly covers the above subject(s) and you are interested to give these invitations to your readers, contact Emily for details at emily@growv.com. If you have any questions about the service itself feel free to shout me at valto@growvc.com.

Thanks for reading and sorry if it was long winded!
Valto

Reblog this post [with Zemanta]
  • Share/Save/Bookmark

Tags: , , ,
Posted in update | Comments