Identifying the Right Investor for Your Startup

By Michael Whitehouse

Photo credit:  http://blog.acrowire.com/

As we tell our members at 1000 Angels, the private investor network that connects startups with investors, a startup lives and dies from its funding strategy. If the correct approach is taken and the right form of investment is secured, then a startup can thrive and establish sustainability. On the other hand, if the wrong type of funding strategy is implemented, a startup may face a precarious future, resulting in stagnancy and, in some cases, even liquidation.

What's right for one company may not work for another. If your startup project requires a continual stream of financing for 1 to 3 years before becoming self-sufficient, for example, then a one-off investment might not cover what you need. Other types of investments may require connections, business and advertising know-how, etc. Investors offering finance exclusively may not be adequate for your company's needs.

It's clear that implementing a funding strategy specific to your project is essential. In order to do this, you'll need to understand the types of startup investments out there and identify which type will best serve your company.

 

Startup Funding: Know Your Options

There are a growing number of funding options out there, even hybrids of popular choices, but for simplicity’s sake we can solidify these into seven investment strategies for your startup. Once you're familiar with each, you will be better placed to choose which is best for you and your business.

Let's take a look at them below:

  1. Family & Friends: It may seem obvious, but to approach friends and family can be a great way to fund your startup; you will not have a serious creditor or investor hanging over your head and can quickly gain access to funds. There is more freedom with this option than most others. You won't need to explain all of your managerial choices in most cases, and often friends and family will be happy to support your project in any way they can as long as the investment amount is reasonable.

    One of the difficulties of approaching friends and family is the rarity and difficulty of raising over $100,000. Not to mention the personal issues which can arise from mixing business with friendship. All investments, even from family, should be documented in writing. There must be an understanding that no investment is a sure thing and that there is a chance the investment might not be returned if the project fails. Of course, if it succeeds, then your friends and family will share in the profits which might offset this concern.
     

  2. Angel Investment: An angel investor provides capital for a startup in return for either equity or convertible debt. Often, such individuals are contacted during a second round of investment after family and friends have been approached. They can provide more lucrative investments, sustaining a business before moving on to more substantial sources such as venture capital. Angel investors use their own funds and are most commonly involved either at the seed stage of a startup to help the business find its feet, or during difficult times when cash flow is an issue.
     

While this form of investment is perfectly valid, you should consider some of the implications of going down this route. Angel investors often seek an active role in the startup they are investing in. They also are unlikely to invest more than once unless they see returns in the pipeline, so if you need more than a one-time cash injection, another funding strategy might be preferential.

3. Business Plan Competitions: Often overlooked by startup entrepreneurs, applying to a business plan competition involves submitting your business plan to be judged by a panel against others, with the winning entry receiving some form of funding. Such a panel normally represents a group of investors who are willing to supply capital to those with the most attractive business plan. There are many such events like this worldwide, but the terms of submission must be explicitly followed. A business plan competition might ask for hands on involvement in the startup in return for investment; if this is not something you wish to entertain, then ensure that you are applying for those competitions without such stipulations.
 

There is usually nothing stopping you from applying for as many business plan competitions as you can. If you yourself are not best equipped to create a dazzling plan, then it might be worth hiring someone to do it for you on a one-off basis. This plan can then be submitted to any competition you wish.

4. Accelerator and Incubator Programs: These programs are designed to foster startups during the seed stage for a defined period. Good example of this could be TechStars. This usually occurs over a few months and includes office space, funding, access to B2B or B2C networks, and mentoring. Experienced businesspeople will therefore help shepherd your startup at the beginning and get it off the ground. This is typically done in return for equity in the business.

Working with the right businesspeople can be a valuable opportunity for your project, but it requires careful consideration. While you gain access to the experience and capital of someone who knows how to make a startup a success, this is given in exchange for a permanent stake in the business which many mentors may sell to other parties outside of your control, as soon as a profit presents itself. The emphasis here is often on the quickest turnaround time possible. If you are looking for a co-founder and investment of time then check CoFoundersLab.

5. Bank Loan: Most banks offer loans to small businesses. All that is needed to acquire a loan is a good credit history, a business plan clearly defining costs and how profits will be made, and a well researched overview of the marketplace for your specific product and/or service. If the business already has capital of its own this can hugely help in persuading a bank to approve funds.

As with any loan, there are dangers which should not be overlooked. If a loan is not paid on time then it can put a startup into a precarious position. Any creditor will expect to be repaid the amount owed; if they are not they will consider legal proceedings which could destroy your business. High interest rates can also be an issue, so it’s critical that you try to secure the best deal available before agreeing to take a loan. A credit union may be a better option, as they will provide capital to members for a much lower annual interest.

6. Crowdfunding: There is no doubt that crowdfunding has changed the way fundraising works. By showcasing the concept behind your startup and offering perks in return for money, rewards-based crowdfunding can provide substantial amounts of capital. The greatest advantage here is that it isn't really investment; at least not in the traditional sense. You receive money from those wanting to support your project, but contributors do not hold a stake in the business. They expect to see the project come to fruition, but there is no legal obligation for this to occur. Crowdfunding can attract hundreds of thousands, and in some cases millions, of dollars worth of capital without giving away one single share in the business. Equity-based crowdfunding platforms like 1000 Angels provide a chance to reach a slightly wider pool of investors, but still raise a good chunk of capital in exchange for equity.

There are downsides to crowdfunding, most pertinently in terms of reputation. If you do not bring the startup to a position where it can produce its goods or service, or you do not honor perks/commitments which were traded in return for investment, then your brand and you personally will acquire a toxic reputation. This can negatively affect future ventures and can all but destroy any faith the consumer might have had in your startup. For this reason, crowdfunding should not be entered into lightly.

7. Venture Capital: One of the most desirable forms of investment for a startup is to attract the interest of a venture capital firm. Most VCs represent a pool of investors who are willing to commit substantial amounts of capital to the right project. With a huge amount of available funds and access to expert consultants who will help your business, venture capital groups provide an enticing option to startup entrepreneurs looking for a large round of funding.

Unfortunately, venture capital firms tend to require a big return on their investment. This can be a large portion of profit as well as a substantial stake in the business. Caution must be taken here; if too much equity is given away, you might find yourself out of the decision making process for the startup that you created. Furthermore, venture capital firms stick to rigid guidelines when it comes to due diligence. It can take them months to decide whether or not a startup is worth investing in, so they are not the ideal choice if you are seeking a quick injection of finances.

Which is the Right Investor for Your Startup?

Unless you have access to a high level of personal wealth, securing investment for your startup is a must just like we outlined on our piece discussing thoughts on hustling stating the differences of why some founders win and other loose. Even after a certain period of bootstrapping, there's no other way to get to the next level. Deciding on which type of investor to approach is entirely up to you. They must be the best possible option for your business and your financial situation. Get that decision right and your startup could grow exponentially, from a small project to an internationally renowned brand.


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6 Things That All Entrepreneurs Should Stop Worrying About

By Philip Acuna

Photo credit:  robbasso.com

Photo credit: robbasso.com

Something that we see at 1000 Angels, the private investor network that connects startups with investors, are entrepreneurs dealing with what it is well considered a stressful endeavor. Being the entrepreneur behind a newly launched startup is even more stressful, since it means constantly having to balance on the fine line between failure and success. Many of the concerns that one has during this time period are warranted, particularly when it comes to budget, client retention, and simply surviving the competitive startup ecosystem. Other concerns, however, are irrational and can take away from the precious energy needed to successfully run a business.

We spoke with six startup founders at different stages in their careers, and asked them what one thing was that all entrepreneurs should stop worrying about.
 

1. Competitors

"Keep an eye on them for sure, but don't let what they do dictate what you do too much. Focus on doing what you do best and innovate. If you're watching your competitors too closely, you'll be playing a constant game of catch up that won't do you much good."

Mark Volkmann, Massagebook

 

2. Success

"Worrying about success is the best way to not succeed. Too much focus on outcomes rather than on getting the job done well is very detrimental. It’s easy to get impatient if you're thinking about results all the time. Even failed experiments teach you so much."

Niraj Rout, Mailflo

 

3. Micro-Managing

"Stop sticking your nose into every company project. Delegation is a pathway for entrepreneurial success and personal sanity maintenance. Once you get to a certain size you have to trust that your team will execute and implement tasks, ideas and strategies successfully. If not, you will only slow the company’s progress, overall success and productivity."

Tim Nichols, ExactDrive

 

4. The Perfect Product

"Stop worrying about getting your product out there as quickly as possible. There are a lot of teachings encouraging new entrepreneurs to fail and fail quickly. But that doesn't mean that you should rush to bring something to market. There is something to be said about taking your time to build a good product. Develop your product in stages and design KPI's (key performance indicators) around each chunk to measure your success. Validating your ideas before you bring your product to the mass market is the best thing you can do if you want to build a sustainable business."

Zoey McKenzie, OMNI

 

5. Criticism

"Every entrepreneur should stop worrying about haters. I see a lot of business owners who are getting hung up on negative reviews and are totally convinced that this is a sign of them doing something wrong. Yes, it might be, and it makes perfect sense to analyse those reviews and make improvements based on any feedback. But entrepreneurs should also keep in mind that no matter how careful they are, there will be haters anyway. Invest in quality product, put emphasis on customer support and positive reviews will outbid the negative ones."

Ksenia Rostova, inSelly

 

6. Time

"I would suggest that the time is one area where entrepreneurs worry there is never enough! However, with correct task priority and scheduling, time is something which we should all stop worrying about. At the end of the day, there is only a certain amount of hours - efficient use is the only way to meet time constraints head on."

Robert Sturt, MPLS Network Specialist
 


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Why the Startup Ecosystem Needs a Shift Towards Gender Diversity

By Ehsan Khademi

For us at 1000 Angels, the private investor network that connects startups with investors, this is a very important topic. The sex-bias trial against Venture Capital pioneer Kleiner, Perkins, Caufield and Byers is just opening up a controversial discussion on whether the startup ecosystem encourages gender diversity.

While the VC and startup scenes have been subjects to wide criticism regarding the gender inequality, this case will be the first gathering such public attention due to the fact that it’s held in court.

In this particular case, a former female employee of KPCB alleges that she was discriminated and harassed while working for the company. According to her, the company failed to promote her, paid her less than to her male colleagues and excluded her from certain client events.

Stanford University’s professor on gender equality, Deborah Rhode, labelled the case to be a wake-up call and commented, “The case has sparked a much-needed debate about gender inequality regardless of its merit.”

Even though the trial has still to show if the allegations have merit or is purely a revenge of a disgruntled employee, the more important question, as pointed out by Rhode, is why addressing gender equality is still a big issue on an industry-wide level.
 

Gender (In-)Equality at the Big Players

Looking back, several other companies had to deal with similar issues in the past. Silicon Valley especially tends to show a huge gender imbalance. Facebook Inc. earned much criticism and managed only to appoint a woman to its Board of Directors after its IPO. This took place only after some negative buzz shattered through social media.

When Twitter went public in 2013, the same problem attracted wider attention. The absence of women in c-suite positions was one of the first things CEO Dick Costolo was asked about during the IPO day while standing on the trading floor of the NYSE. He responded that Twitter is aware of that and just promoted a woman as a general counsel.

Well, he failed to mention that the promotion took place 5 weeks before the IPO, which seems more like a publicity stunt than active promotions of women to management positions. It seems that Silicon Valley took a page from Wall Street with regard to its male-dominated culture.

Another revelation came when major tech companies released their payroll details for the first time last year. Only 30% of all employees were females, while the majority of technical jobs were occupied by male employees.
 

Gender Bias - A Disturbing Trend

It can be assumed that Big Players don’t exactly serve as role models. If, on one hand, established former startups like Google, Facebook or Twitter and, on the other hand, elite VCs fail to address this problem in an adequate manner, it’s no wonder that there is a lack of awareness of this particular issue on a large scale. In today’s competitive marketplace, it’s not a question of gender preferences but rather a strong case for corporate mismanagement. It wouldn’t be in the best interest of a company to employ women just to fulfill a certain quota, instead of looking for the most deserving person to fulfill the position.

Nevertheless, there seems to be a certain trend emphasizing a bias against women when it comes to startup entrepreneurship. A quick look at startups seeking funds reveals a devastating image of the industry. As a matter of fact, most female-led startups are less likely to get funding by a VC in comparison to their male counterparts, indicating a strong case for gender bias.

A research study by Professor Candida Brush from the Babson College gives further evidence to these disturbing developments. According to the study, 97% of venture-backed companies in the U.S. have male CEOs. In addition to that, less than 10% of all VC firms analyzed in the study had at least one female partner.

This leads to the question of whether there’s a reasonable economic explanation for this kind of imbalance or if it’s based purely on personal preferences. Sadly, it appears that, most likely, the later is true.
 

Is Gender Diversity Beneficial? Yes, It Is.

In matters of business, it is better to put emotions aside and judge based on facts and figures. In 2010, female entrepreneur Cindy Padnos published a research paper called “High-Performance Entrepreneurs: Women in High Tech”. Among the findings are several interesting clues that suggest a strong case for the positive influence of female employees and entrepreneurs on startup companies. High-tech companies founded by women are more capital-efficient, and venture-backed firms with women on the board have had more successful exits.

Furthermore, women-owned firms are the fastest growing sector of new venture creation in the U.S. Finally, companies that are the most inclusive of women in top management achieve 35% higher ROE and 34% better total return to shareholders versus their peers. (Source: http://www.illuminate.com/whitepaper/)

In a 2011 interview with Inc Magazine, Padnos stated that there are actually three ways startups benefit from gender diversity:

 

Padnos's research points to three statistics that suggest that a mixed-gender company is better-positioned for success. They are: 

Women are better at bootstrapping: Research from the Kauffman Institute shows that women-led tech start-ups launch with about half as much capital. Why? "I think part of it is that it's perceived by women that it's harder to raise large amounts of capital, so they frequently start with less capital, because it's an easier thing to do," says Padnos. In other words, women seem to be capable of doing more with less.

Women fail less often: According to the 2005 Report on Women and Entrepreneurship, the percentages of entrepreneurs who expect growth for their businesses "is somewhat higher for female entrepreneurs than male entrepreneurs." According to a separate study by Babson College and the London School of Economics, women-led start-ups experienced "fewer failures in moving from early to growth-stage companies than men."

Gender diversity improves long-term returns: Research from the University of Michigan and Cornell University found that companies with more gender diversity delivered better results from IPOs, by as much as 30 percent on average.

(Source: http://www.inc.com/articles/201109/how-to-combat-the-all-male-startup.html)

These findings not only suggest that it’s highly beneficial to have women on board of a startup company, they also imply that it is an economic disadvantage to neglect to either employ female employees or invest in companies led or founded by female entrepreneurs.
 

Why It Is Necessary To Change The Status Quo

At the moment, it looks like most of the established startup companies, as well as the major VCs, are comfortable with the current situation and hesitate to put change in motion. Going forward, this will turn out to be a mistake, considering the ever-increasing battle for talent and innovation. The main goal should be getting the best minds (to add to the value, innovation, progress and success) regardless of the gender.  

Whats more important is that upcoming startups feel the need to initiate a change of paradigm. Innovation and progress are certainly the characteristics of the startup culture and this attitude shouldn’t stop at the corporate level when speaking of gender diversity.

On a final thought, everybody can imagine what would happen if your female customer base chooses to pass on the services or products you offer because of certain hiring practices. And why shouldn’t they? Let’s hope that this kind of customer behavior isn’t necessary in order to raise awareness of a much needed shift in the corporate startup culture.


Securities offered through WealthForge, LLC. Member FINRA/SIPC Onevest Corporation ("Onevest") is not a registered broker-dealer and does not give investment advice with respect to any securities. All the startup offerings listed are offered by the applicable Issuer. Onevest has not taken any steps to verify the accuracy of the information provided on the offerings that are listed. Onevest takes no part in the negotiation of the transaction and no securities are executed through Onevest's platform. Onevest receives no compensation in connection with the purchase or sale of securities.

Hyperlinks to sites outside of our domain do not constitute an approval or endorsement of content on the visited site.

 

I’m Not In Silicon Valley. How Do I Raise Money?

By Tim Houghten

Photo credit:  http://blog.sli.do/

Photo credit: http://blog.sli.do/

Startup funding appears plentiful but how accessible is it for those not living in Silicon Valley?

This a question that we get all the time at 1000 Angels, the private investor network that connects startups with investors. Do startup founders need to consider taking the leap and moving to the Valley, or has technology made San Francisco irrelevant for the majority of investors and entrepreneurs today? If so what key factors can help level the playing field, and increase odds of obtaining funding?

‘Venture Valley’ in 2015

It’s no secret that Silicon Valley dishes out and receives the bulk of VC money. Bloomberg Business and the National Venture Capital Association reports that 2014 saw investment dollars soaring 61% year-over-year, with more deals being funded too. Totals for 2014 hit $105B, and 4,356 deals.

Forbes reveals a growing number of Silicon Valley accelerators offering spots to incoming overseas entrepreneurs including Y Combinator, 500 Startups, Techstars, Founders Space, and Wearable World.

However, take a look at deals funded via 1000 Angels, or freelance job openings on major outsourcing platforms like oDesk, and it is obvious that many Silicon Valley startups are increasingly finding their funding and talent outside.

Silicon Valley is not a cheap place to live for startup founders, it doesn’t have a very affordable talent pool, and the pursuit of the VC money that is there is very competitive.

5 Alternatives for Startup Fundraising

1.     Online Crowdfunding

2.     Joining Accelerators and Incubators in Secondary Markets

3.     Traveling to Investor Pitching Opportunities like Shark Tank

4.     Entering Startup Competitions (i.e. Startup Weekend and Startup Battlefield)

5.     Virtually Pitching Investors via Email, Phone, and with Pitch Decks

In fact; a recent infographic from Entrepreneur.com reveals that less than 1% of startup funding came from venture capital firms last year. Self-funding, loans, and friends and family were responsible for funding far more startups. The data even shows that crowdfunding has been responsible for funding more than 3 times more startups than ‘Venture Capital’. And California only placed number 5 out of the top 10 states considered the ‘Best Places in the U.S. for Crowdfunding’.

Tips for Improving Your Pitch

Online and distance fundraising is a viable strategy, but startups can dramatically increase their odds of success if they consider the following…

·       Use the press and digital media to gain attention and get noticed

·       If you are a foreign startup consider organizing as a Delaware C Corp

·       VC Mark Suster suggests promoting your willingness to travel for board meetings

·       Be alert to any potential negative perceptions of your location

·       Highlight the advantages in profitability and securing talent in your location

·       Ariel Poler says to remember that most Silicon Valley VCs aren’t really from the Valley – find your point of affinity

·       Do your homework on investors and seek meetings with those that are a good fit, and are already interested in your type of startup

·       Compensate for proximity with passion, realistic planning, and establishing credibility

Summary

In conclusion; venture capital is readily available for serious startups in 2015. While Silicon Valley may still be the source of a significant amount of this funding, more capital is being invested at a distance, and most notably through crowdfunding.

While there can be advantages of being positioned in the valley, those startups that aren’t can find fundraising goes further thanks to lower operational costs elsewhere, and this can be a great pitch point. Some will even find they benefit from less competition for dollars elsewhere, and can raise capital for efficiently and cost effectively from where they are now, providing they use channels which help build their credibility and trust level.


Securities offered through WealthForge, LLC. Member FINRA/SIPC Onevest Corporation ("Onevest") is not a registered broker-dealer and does not give investment advice with respect to any securities. All the startup offerings listed are offered by the applicable Issuer. Onevest has not taken any steps to verify the accuracy of the information provided on the offerings that are listed. Onevest takes no part in the negotiation of the transaction and no securities are executed through Onevest's platform. Onevest receives no compensation in connection with the purchase or sale of securities.

Hyperlinks to sites outside of our domain do not constitute an approval or endorsement of content on the visited site.

Co-Founders of CloserIQ Match Up to Help Startups Find Sales Talent

The job market for startups is viciously competitive, and early-stage companies are doing everything they can to recruit (and retain) top talent. Ping-pong tables, mandatory vacation, beer on tap and other perks have been on the rise to help compensate for the lack of funds available to match potential salaries from giant tech companies. Most startup founders and hiring directors would agree that the company mission and culture are the two biggest driving factors that recruit talented employees, more so than yoga classes or catered lunch. There are so many great companies pursuing a valuable mission, yet the job market is so massive that many companies struggle finding the ideal combination of talent and fit. Several startups have focused on addressing this problem, and NYC-based CloserIQ is one of them. We asked Jordan to talk about his experience in building his team.

Jordan Wan, Co-founder and CEO, spoke to several potential candidates on CoFoundersLab before meeting Dan Zhou, Co-founder and CTO. Jordan explained that “the profiles made it easy to find the person I was looking for.” After matching up, Jordan and Dan agreed to focus in on the hiring dilemma faced by startups, with a unique emphasis on sales jobs (because no matter how great your product is, you need people to sell it). Here is Jordan’s pitch for CloserIQ:

CloserIQ is a recruiting platform for startups to meet sales talent. We provide informative candidate profiles with audio introductions and previous sales experience to help startups skip bad phone screens.
Jordan Wan, Co-founder and CEO

Jordan Wan, Co-founder and CEO

Dan Zhou, Co-founder and CTO

Dan Zhou, Co-founder and CTO

Since their official launch in April of 2014, Jordan and Dan have led the CloserIQ team (now at 6 people) in gaining traction from some big clients including Justworks, Trello and Trustpilot. Even more impressive, Jordan reported that Oscar Insurance “made 17 sales hires in 3 months on CloserIQ leveraging a combination of intuitive software and attentive service.” They have also been creating original content about sales jobs on their blog.

We asked Jordan for his advice on finding a co-founder, and he emphasized the importance of patience and alignment of mission and passion:

"Take your time when looking for a co-founder. Get to know one another's core values and strengths & weaknesses. Let the relationship develop organically and see if you can share a common mission and passion for building a company together. When you realize that the other person is just as committed as you are to the idea and business, have an open discussion about the type of company and various scenarios together."

You can follow CloserIQ’s progress by visiting their site here, or following them on Facebook and Twitter.


Securities offered through WealthForge, LLC. Member FINRA/SIPC Onevest Corporation ("Onevest") is not a registered broker-dealer and does not give investment advice with respect to any securities. All the startup offerings listed are offered by the applicable Issuer. Onevest has not taken any steps to verify the accuracy of the information provided on the offerings that are listed. Onevest takes no part in the negotiation of the transaction and no securities are executed through Onevest's platform. Onevest receives no compensation in connection with the purchase or sale of securities.

Testimonials may not be representative of the experience of all clients. Testimonials are not a guarantee of future performance or success.

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Thoughts On Hustling: Why Some Founders Win and Others Don't

By Aston Reynolds

Photo Credit- Flickr/  keithpersallphotographer.com

Photo Credit- Flickr/keithpersallphotographer.com

If you watch the ABC show Shark Tank, you'll notice the sharks ask a lot of questions about revenue. It doesn't matter how good an idea seems on the surface. If there's no revenue, they usually aren't interested.

This begs an important question. Imagine you're a founder with a really great idea. How do you turn that idea into revenue? An idea for a product is one thing. Making money selling your product is something else entirely. It's often the difference between a product and a business This is something that we see repeatedly at 1000 Angels, the private investor network that connects startups with investors.

 

How Ideas Become Businesses

Many founders are tempted to start raising money as soon as possible. They often plan to use that money to hire marketing and sales staff. But raising money without revenue is hard. And producing revenue without money is hard. Sometimes it seems like there's a "catch 22" built into the system.   

There's no "catch 22," but there is a catch. The catch is founders have to hustle in order to turn a product into something that begins to resemble a business. Hustle is related to grit. Grit is related to gumption. It is incredibly difficult, some would even say impossible, to build a business without these attributes.

 

What is Hustle?

The dictionary gives us 21 different definitions for the word "hustle," but none of them accurately conveys what it means in terms of growing a start-up.

We also have the pejorative "hustledork" to work from, but that definition is not likely to be useful, either. It's a fairly common refrain that start-ups in the early stages need a "hustler and a hacker" to get off the ground. In lieu of an accurate definition, have a look at the following poster by Joey Roth:

Charlatan, Martyr, Hustler

 

From the chart, we can tell that a hustler is equal parts charlatan and martyr. Charlatans talk a lot, and they're easy enough to find in the marketer ranks. Martyrs work a lot, and they're easy to find among developers and designers. It's also plain to see that a hustler who doesn't work is a fraud, a charlatan.

What charlatans and martyrs both lack is the ability to work and then talk about their work vigorously and persuasively.

But we still haven't defined what it really means to hustle. To really define it, let's go back to a 2012 article by Greg Kumparak published in PandoDaily:

"To truly hustle is to do whatever it takes to make that next dollar, no matter how crazy or ridiculous."

In the early stages, hustlers are important because the work of building the business and the work of promoting and operating the business must be done by as few people as possible. Ideally everyone involved in the start-up has some of those precious hustle genes in their DNA. 

Start-up reality often dictates the developer has to extend his or her day running errands or taking care of customers by answering emails and returning phone calls. The sales pro might need to know something about development and design to be truly useful, especially when there are just two people on the team. The team's ability to wear not just many hats but all of the hats is often what separates a mere idea from a burgeoning business, at least in the beginning.

 

An Example

As Tom Harari, CEO of NYC-based Cleanly demonstrates, this is true even after a start-up secures seed funding:

"[After leaving San Francisco via the red-eye to NYC, Harari's] back on the street, putting Cleanly door tags on apartment buildings and working the room at meetups and cocktail parties as he looks for potential customers. When the company’s drivers get overwhelmed, Harari and cofounders, Itay Forer and Chen Atlas, handle the deliveries themselves."

(Fast Company, February 2015)

Although Cleanly relies on their drivers, they know not to push them too hard. And they also know that bringing on extra, or even temporary, drivers will not only speed their burn rate, it may also compromise the service their first customers receive. When the business gets hectic, they take on the extra responsibilities themselves. They know how to hustle. 

 

Can Hustle Be Taught?

We're not sure, but we know hustle is infectious in the same way enthusiasm and leadership are infectious. Having the right person on the team may inspire the rest of the team to do whatever it takes to get or retain the next customer. It seems to work out best when everyone brings their own unique hustle to the table starting from day one.

Some developers and designers pull 36-hour marathon sessions in front of their machines only to crash on a couch, all based on an unsubstantiated hunch originating in another founder's inbox. Others won't last more than ten hours. The difference comes down to hustle. In business, the difference between success and failure often comes down to doing what other people are not willing to do.

 

Why It Matters

Investors watch for founders who hustle. It's not good enough to convince them your idea is good. You have to show them your idea is good using the best evidence you can have, usually numbers. When it comes to business, revenue is the king of numbers. Where there is revenue, there is often a good idea backing it up. The revenue often matters more than the idea when you want, or need, other people's money to help you start or grow your business. The only way to get there for most founders is to do things other people are not willing or even capable of doing.

You're going to have to show investors the money. You have to show them something so compelling that they feel stupid walking away from it. Investors cut checks when you can show them your company's profitability is as certain as death and taxes. There are no checks for founders who come up short, either from investors or the marketplace. Before you can explain it to them, you have to be able to explain, and prove, it to yourself. The best way to do that is to hustle. 

 

Final Thoughts

Earlier we said hustle was composed of "grit" and "gumption" before going on to define hustle as doing whatever it takes to get customers, no matter how silly.

Google reveals that gumption is "shrewd or spirited initiative and resourcefulness."

And grit is "courage and resolve; strength of character."

Resourcefulness means finding new ways of doing things. You have to be shrewd to do these things without burning through your runway. And you have to be spirited to get off the ground. And nothing takes to the air without courage, resolve, and strength of character. All of these things combine with technical and business skill to create what entrepreneurs, founders, and investors call "hustle." 


Securities offered through WealthForge, LLC. Member FINRA/SIPC Onevest Corporation ("Onevest") is not a registered broker-dealer and does not give investment advice with respect to any securities. All the startup offerings listed are offered by the applicable Issuer. Onevest has not taken any steps to verify the accuracy of the information provided on the offerings that are listed. Onevest takes no part in the negotiation of the transaction and no securities are executed through Onevest's platform. Onevest receives no compensation in connection with the purchase or sale of securities.

Hyperlinks to sites outside of our domain do not constitute an approval or endorsement of content on the visited site.

Co-Founders of Pomello Practice What They Preach in Building Their Team

No platform in the world, including CoFoundersLab, offers a perfect solution to building a company; we only try to make it easier. Serious effort is still required to ensure you have the right team, strategy, and vision. For two co-founders of YCombinator-backed Pomello, that meant using CoFoundersLab to not only find a potential technical co-founder, but also rigorously test their fit as a team. It is no coincidence that their company focuses on helping companies hire based on cultural fit.

We got to speak with Catherine Spence and Xian Ke, two of the three co-founders, about how they matched up to execute on Pomello’s mission.

Oliver Staehelin,   Catherine Spence   and Xian Ke, co-founders of Pomello

Oliver Staehelin, Catherine Spence and Xian Ke, co-founders of Pomello

How did you find your co-founders through CoFoundersLab?

Catherine: Oliver and I had been looking for a technical co-founder for a long time. We had been reaching out to people through our networks, and finding other folks through various meet-up events. We are, as you can imagine, pretty picky about fit, and we really wanted to find someone who felt passionately about the problem we are working on. We had almost given up on finding someone, when I got a note from Xian on CoFoundersLab. I was immediately interested in meeting her, because it was clear she had read up on what we were working on and was interested in the idea. I also noticed that she had been slowly working her way from very large corporations to start-ups over the course the past few years, so I felt like she was more ready to join a scrappy, lean (very limited funding), founding team. As for fit, with a co-founder there really is no way to 'interview' someone in the traditional sense. So we decided to ask her to work with us a couple days a week. This gives everyone a chance to see how the team dynamics develop. I look for someone that wants to get stuff done, cares about her/his work, and who can laugh in tough situations. Xian has all of these qualities, so after a month or so I knew we should make her an offer to come on full-time.

Xian: I was browsing on CoFoundersLab for projects that could be interesting and could make a positive impact on the world. It helped that Catherine and Oliver are fun, honest, and thoughtful people who can get stuff done. Ultimately, I wanted to see what would happen if we worked together, and didn’t want to regret passing on the opportunity.


What is Pomello?

Pomello helps companies hire employees based on culture fit. This online service is based on 30 years of research. It quantifies company culture and uses data to help teams hire more successful people. Employees matched for culture perform better, are more engaged in their work, and quit less often.

Why

Companies admired for their culture like Google know that evaluating potential new hires needs to include a rigorous assessment of fit. But Google found out a long time ago that evaluating fit is difficult, and people don’t often get it right. In fact, even at Google it was a “random mess” according to Laszlo Bock, head of People Ops [1]. Not surprisingly, an entire field of science is dedicated to studying person-organization fit. Fit has a profound impact on job satisfaction, engagement, performance, and turnover. Pomello is based on more than 30 years of careful study. It enables companies of any size to access the best research in organizational behavior.

A demo of the Pomello landing page displaying candidates' suitability compared to your company's culture. 

A demo of the Pomello landing page displaying candidates' suitability compared to your company's culture. 

Insights

People often confuse culture with perks like free lunches and ping pong tables in the office. Unlike perks, which come and go with market swings, a strong culture will make your people more productive even when you are facing challenges.

Many managers assume that their employees are more motivated by pay than purpose, when in fact the opposite is true. Values and culture are what give employees a sense of purpose, will drive productivity whether you are able to offer employees a rich paycheck or not.

Who is it for

Any company or team that is hiring. Pomello is particularly well-suited for companies that have customer-facing employees (e.g. sales teams, retail associates, etc.). Pomello saves companies money, especially when performance is highly variable and turnover is a significant cost.

Any advice for founders on CoFoundersLab about finding the right cofounder?

Catherine: Being without a co-founder is better than having the wrong co-founder, so taking your time is important. Once you've established mutual interest you have to try working on something together. Pay attention to how you disagree with someone, is it functional or dysfunctional? Functional disagreement means you are able to act in spite of disagreement, and you trust and respect your co-founder even if you are vehemently disagreeing.

Xian: Go with what you’re interested in spending time on. Life is uncertain, so don’t expect 100% clarity. Be grateful to encounter first-world problems!

 

You can follow Pomello’s progress by visiting their web site here, checking out their recent coverage on TechCrunch, or following them on Facebook or Twitter.


Securities offered through WealthForge, LLC. Member FINRA/SIPC Onevest Corporation ("Onevest") is not a registered broker-dealer and does not give investment advice with respect to any securities. All the startup offerings listed are offered by the applicable Issuer. Onevest has not taken any steps to verify the accuracy of the information provided on the offerings that are listed. Onevest takes no part in the negotiation of the transaction and no securities are executed through Onevest's platform. Onevest receives no compensation in connection with the purchase or sale of securities.

Hyperlinks to sites outside of our domain do not constitute an approval or endorsement of content on the visited site

Passionate Entrepreneurs and Innovators Gather to Share Struggles and Strategies for Success - Collaborate Recap

This past weekend, almost 1,000 people converged on the Ronald Reagan Building in downtown Washington, D.C. for the Collaborate conference hosted by Fosterly. I was fortunate enough to attend, and after two days left with the standard conference package: a stack of business cards; pages of notes from panels, keynotes and workshops; and ambitious plans for new initiatives with the people I met. A lingering question remained that I had avoided answering until the conference had closed down, but had been searching for an answer to ever since I arrived. What was the true value of this particular conference? What separated Collaborate from all the other networking events in DC and around the world?

Yes, that's a Tesla Model S in the middle of the atrium. 

The Tesla Model S sitting in the main atrium was a minor differentiator, but clearly a statement by Fosterly that they wanted this weekend to stand out. More importantly, the conference emphasized the intersection between government and entrepreneurship, providing a safe space for the two sides to share ideas for collaboration. The conference environment broke down any barriers that might exist - literally or figuratively - between government and the private sector. This rarely-seen openness revealed just how much more we can do to innovate and improve people’s lives by fusing the power (and budget) of government authority with the innovation and growth of the private sector.

Collaborate was peppered with rich content, leaving me wishing on several occasions that I could be in multiple places at once. Here are some highlights from what I did see:

Oratium's Pyramid of Planned Outcome: Knowledge leads to Belief, which leads to Action.

Entrepreneurs know that in order to have a successful business, perhaps the most important skill you need is the ability to communicate the business’ value to your customers. The same can be said when seeking an opportunity to collaborate, especially with government, where regulations and red tape can slow you down. Powerful communication is essential, and that’s why I loved Eli Murphy’s engaging and memorable workshop on advanced communications strategies. Eli is the SVP at Oratium, an international communications firm. Eli’s presentation focused on the process of conveying your message so that it is absorbed by your audience. The key, Eli explained, is starting with the audience’s problem, rather than about your own need. Here are the questions to ask when giving a presentation (in this order) taken from Oratium’s model:

  • “As a result of this presentation, what do I want my audience to DO?”

  • “In order to make a decision to do this, what does my audience need to BELIEVE?”

  • “To believe these things, what does my audience need to KNOW?”

This cycle of “Know → Believe → Do” will help shape every presentation you make into a powerful message that inspires action from your customers.

 

"Thinking is a terrible way to think." -Tom Chi, Co-founder of Google(x)

Tom Chi, the co-founder of Google(x) and the co-creator of Google Glass, delivered a motivating and humor-filled keynote on Friday evening about rethinking innovation. Tom provided examples from his own work, including creating the first Google Glass “prototype” a mere three hours after coming up with the idea (they used a clear sheet protector, a wire hanger, and a netbook). The importance of iteration and rapid learning is often misconstrued as part of the misunderstood concept of “failing fast”. Tom emphasized that guessing and failing are only positive if you learn something significant during the process. As he said, “thinking is a terrible way to think.” Instead, doing is the best kind of thinking, because it is impossible to consider all the possibilities and factors in a decision by merely thinking about it. Tom asserted that merely thinking about a problem will yield an 80% solution to only 25% of the problem. There are things we simply will never consider unless we take action. Through various strategies like mandatory customer feedback, ambitious thinking and rapid prototyping, Tom closed by encouraging the audience to “maximize the rate of learning by minimizing the time to try things."

"The secret to success is self-awareness." -Shawn Nelson, Founder & CEO of Lovesac.

Saturday morning opened with, in my opinion, the most honest and hard-hitting content of the weekend. Shawn Nelson (Founder/Chairman of Lovesac), D.P. Venkatesh (CEO at mPortal), and Tien Wong (Serial CEO and angel investor) sat down to discuss the toils of entrepreneurship. Although it was simply an informal discussion, all three leaders shared valuable insights on the true hardships of building a business. Shawn Nelson observed that “there has never been an article published that truly captures how difficult entrepreneurship really is.” He also mentioned that “the secret to success is self-awareness.” Preaching mental preparation, routine, and a healthy lifestyle, the panel was sure to leave a few founders in the audience second-guessing their decision to pursue entrepreneurship.

The last session I attended was a strong example of the benefits of providing an open space for collaboration. Shana Glezer, VP of Social Marketing at SocialRadar, and Jenna Gavin Kelly, CEO of Peerdash, led a roundtable discussion about women in entrepreneurship. I was one of four men, among 20 women, and it was enlightening to hear the variety of perspectives on how women can prosper and grow as entrepreneurs. Most agreed that women are held to a higher standard, and that it is much more difficult to get funding as a female founder. However, there was much more variance in opinion when brainstorming potential solutions. The lack of more women in entrepreneurship is a problem, but crowdfunding may offer one solution: women are receiving more total funding on crowdfunding platforms than men. I am grateful to work with a female co-founder at Onevest, Tanya Privé, who has given me a firsthand perspective on the challenges faced by a female founder and how she is facing them head on.

Springboard Enterprises held two “Dolphin Tank” sessions, playing off the ABC hit show “Shark Tank”, but with a bigger focus on feedback and making introductions than on actual investments. Springboard president Amy Millman brought on a few other  ensured that pitching entrepreneurs had a safe environment to share their ideas and receive constructive feedback.

The team at Fosterly and all the volunteers did a wonderful job in making sure everyone was engaged, and reinforced the innate value of these types of events - bringing like-minded people together to share ideas. An important realization is that everyone always needs help with something, and at an event like Collaborate, chances are you might find the person who can help.

 

Securities offered through WealthForge, LLC. Member FINRA/SIPC Onevest Corporation ("Onevest") is not a registered broker-dealer and does not give investment advice with respect to any securities. All the startup offerings listed are offered by the applicable Issuer. Onevest has not taken any steps to verify the accuracy of the information provided on the offerings that are listed. Onevest takes no part in the negotiation of the transaction and no securities are executed through Onevest's platform. Onevest receives no compensation in connection with the purchase or sale of securities.

Testimonials may not be representative of the experience of all clients. Testimonials are not a guarantee of future performance or success.

Hyperlinks to sites outside of our domain do not constitute an approval or endorsement of content on the visited site.

Onevest at Collaborate: Helping Fosterly Stimulate the Entrepreneurial Ecosystem

This post was originally published on the Collaborate blog as a Onevest guest post.

The value of a vibrant community, particularly as related to entrepreneurship, is widely recognized and appreciated. Community resources, mentors, and peer collaborations are just some of the intangible pieces every entrepreneur needs, and that only come with a strong network. When it comes to building a company, most first-time founders lean heavily on peer expertise and mentorship to guide them. The same is true for more experienced entrepreneurs. Whether moving from one startup to the next, or growing your company from 2 to 40 people, engaging with a deep personal and professional network is pivotal. Ask any successful entrepreneur, and you would be hard-pressed to find one who got to where they are now without the help of others. The “all by myself” mentality is not only unhealthy, but also completely unsustainable in entrepreneurship. By identifying leaders in the community, you can utilize their influence and experience to help move your company forward. The same is true for peer collaboration. 

Collaborate by Fosterly brings this community to your doorstep. At events like Collaborate, you have the opportunity to meet with like-minded people who not only are as driven and dedicated as you are, but also share a common goal of moving a startup forward. Those personal interactions, from a simple handshake, to receiving valuable advice, to even closing a business deal, are immensely valuable. In addition, most of these people come to an event like Collaborate with a community-oriented mindset, open to sharing their knowledge. Fosterly beautifully integrates this principle into their own community of thousands of entrepreneurs. They offer tons of great resources, events, workshops, and more to help entrepreneurs grow their own business and help others grow theirs.

Onevest wants to take that unique experience of collaboration and mentorship online. We imagine a world in which an entrepreneur can attain the same valuable knowledge and relationships through a digital portal. This was our inspiration for creating Learn.Onevest. Learn.Onevest is a peer-to-peer learning platform that offers massive amounts of content (think “Reddit” for entrepreneurship) on topics ranging from team-building, to fundraising, to investing. Readers have the ability to see who else is viewing an article/video, converse with that person, comment on a specific section, and up/downvote. Our mission is to bring that community feeling into the digital space. 

One key feature involves a curated curriculum of content that brings valuable content to a central place. We’ve created the first curriculum to help get you started. Click the link below to gain access.

STARTUP FUNDRAISING CURRICULUM

CoFoundersLab Helps Content BLVD Find the Ever-Elusive Tech Co-Founder

Content BLVD arose out of the realization that the public has grown more and more annoyed by irrelevant, intrusive advertising. As far back as 2010, co-founders Daniel Ripoll (CEO) and Mike Sobol (CMO) noticed the rise of ad-skipping services at the same time that ad click-through rates were declining. They watched revenue flow from traditional advertisers to content marketing. The market needed a better way for brands to reach consumers who wanted to hear their messages.

Since April 2012, Content BLVD has booked over $450,000 in revenue and signed more than 100 clients for its original content marketing services. Customers range from mom-and-pop shops to nonprofits and global enterprises, such as the Breast Cancer Society and Home Depot. Content BLVD connects businesses with publishers and media partners who can boost their SEO metrics, drive referral traffic, and expand brand reach across various channels.

Its biggest challenge was taking advantage of all the technological changes that are disrupting the $62 billion Web marketing industry. After Content BLVD graduated from the Boomtown Accelerator program in Boulder, Colorado this June, flush with advice from 100 mentors and additional funding, it turned its full attention on its Web infrastructure. Dan and Mike created a profile on CoFoundersLab in search of a technology guru with startup experience.

Dan Ripoll, CEO and Co-Founder

Dan Ripoll, CEO and Co-Founder

Mike Sobol, CMO and Co-Founder

Mike Sobol, CMO and Co-Founder

George McKenzie, Co-Founder and CTO

George McKenzie, Co-Founder and CTO

Enter George McKenzie. With over a decade of startup experience, McKenzie has earned a reputation in fields like process methodology, quality, and automation. He founded YesDocs and shepherded the development of the engineering department at Volusion.com. With McKenzie on board as CTO of the six member management team, the last piece of Content BLVD’s creative business model fell into place.

The search for a technical co-founder can be one of, if not the most difficult step in building your core team. Gaining access to the 40,000+ member network of CoFoundersLab helped Content BLVD solve this problem, and we want to help solve it for entrepreneurs everywhere. Our team-building platform, now combined with our equity crowdfunding platform, is giving entrepreneurs the chance to take the first series of critical steps in launching a successful company.

 

You can follow Content BLVD by visiting their website here or following them on Facebook or Twitter.

Content BLVD is working to do away with interruptive advertising in favor of brand integration. By matching businesses with bloggers, Youtubers, television producers and more on an open platform, brands gain easier access to the content that their customers are already enjoying.


Securities offered through WealthForge, LLC. Member FINRA/SIPC Onevest Corporation ("Onevest") is not a registered broker-dealer and does not give investment advice with respect to any securities. All the startup offerings listed are offered by the applicable Issuer. Onevest has not taken any steps to verify the accuracy of the information provided on the offerings that are listed. Onevest takes no part in the negotiation of the transaction and no securities are executed through Onevest's platform. Onevest receives no compensation in connection with the purchase or sale of securities.

Testimonials may not be representative of the experience of all clients. Testimonials are not a guarantee of future performance or success.

Startup Angels to Host First National Summit on Angel Investing

On November 12th-13th, in Dallas, Texas, Startup Angels will be hosting the first ever national conference solely dedicated to angel investing: AngelSummit.io. Startup Angels is a global platform that works to empower and educate angel investors, and they’re partnering with UP Global, 500 Startups, and the Dallas Entrepreneurship Center to kickstart the national conversation on angel investing. The summit will bring over 200 industry and community leaders together to discuss how to continue growing the startup investing community and its ever-growing impact on innovation.

According to the official press release, the goals of AngelSummit.io are the following:

  1. Clearly frame the startup investing landscape

  2. Facilitate conversation among community and industry leaders

  3. Enable and inspire more investors to fuel greater innovation in their own communities

Here at Onevest, we share the mission of Startup Angels to bring startup investing to angels all over the country. We feel that geographic location should not be a determining factor in the success of a startup. Rather, with a strong team, big market, and high-quality product/service - as well as a few supportive angel investors - a startup can grow from anywhere in the U.S. This is already happening, as startup communities everywhere have been fostering a rich culture of innovation through accelerators, incubators, competitions, and other resources.

Additionally, the rapid growth of online platforms has provided an entirely new medium for angel investing. Onevest’s CEO, Alejandro Cremades, will be sitting on a panel at the conference to discuss the benefits of these various investment platforms. Alejandro will be joined by Colm Browne from ProSeeder, a technology platform to help investment firms with their operations, and Dan Roselli from Packard Place, a Charlotte-based hub for the local entrepreneurship community. Other speakers will be added closer to the event.

Angelsummit.io is a chance for attendees to learn from leaders in the field, participate in breakout discussions, and network with their peers from around the country. Confirmed speakers for the conference include Dave McClure of 500 Startups, Mark Kvamme of Drive Capital, Scott Case of Main Street Genome (formerly with the Startup America Partnership), and Paul Singh of Disruption Corporation.

Angelsummit.io represents a groundbreaking step in opening up the conversation about responsible Angel Investing in America. For more information on the event please visit: www.angelsummit.io.

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About Startup Angels

Startup Angels is a new global platform that inspires and enables angel investors, across the US and around the world. We offer action-based learning, networks and resources for new angels to explore market-entry and experienced angels to explore new markets. For more information please visit www.startupangels.co.

 

Securities offered through WealthForge, LLC. Member FINRA/SIPC Onevest Corporation ("Onevest") is not a registered broker-dealer and does not give investment advice with respect to any securities. All the startup offerings listed are offered by the applicable Issuer. Onevest has not taken any steps to verify the accuracy of the information provided on the offerings that are listed. Onevest takes no part in the negotiation of the transaction and no securities are executed through Onevest's platform. Onevest receives no compensation in connection with the purchase or sale of securities.

Testimonials may not be representative of the experience of all clients. Testimonials are not a guarantee of future performance or success.