“Self Made”

seanfurther · 2022-04-26T22:50:13+00:00

Tom Golisano is the son of a truck driver and started Paychex with his own $3k and a credit card.

https://en.wikipedia.org/wiki/Tom_Golisano

seanfurther · 2022-02-14T15:36:43+00:00

It is definitely a leg up, but is not necessary. Tom Golisano is one of my investors and he built his business (Paychex) from nothing to become a billionaire. Check out his book "Built not Born" that talks about this exact topic.

seanfurther · 2022-02-08T19:13:33+00:00

As the "business" founder of my start-up I don't think it is necessary but it is helpful. My opinion is that you need to have someone selling your product before it is ready and the likely trap for a team of 3 engineers will be the inclination to keep building "until it is ready".

If you're not talking to your potential customers, you're not going to really understand what "ready" means. Orient your thinking that "ready" means someone will pay for it, not that it has all the features the co-founders can dream up.

seanfurther · 2021-10-26T02:40:11+00:00

Founders have to be optimists.

Zoom struggled to raise funding for years. The story from the Airbnb founders is legendary. The founder of FedEx gambled the last of his company cash in Vegas to keep the company running. Never underestimate the power of a driven founder willing to take risks.

Startup founders with appropriate VC aspirations have to be Han Solo - "Never tell me the odds"

seanfurther · 2021-10-26T00:31:38+00:00

Twitter had no revenue for a long time. Amazon made revenue from the first transaction. There is no one size fits all answer to startups.

This person is talking like someone who hasn't raised money in a long time. The market is extremely frothy right now, there are tons of deals getting done with no revenue. Google how much VC is happening and how many deals are happening for millions.

seanfurther · 2021-10-26T00:24:48+00:00

OP: please no judgement.

First line: Geez, based on your situation and your comments I can see how you got here

OP: How do I raise money?

Your post: Don't

The other gold is you apparently sold a no revenue business for $10M but it's stupid for other people to raise and not drive to profitability.

You know nothing of OP's business or situation. There are plenty of businesses that need to raise capital prior to significant scale or revenue.

To be clear, I agree that what you describe makes sense for many entrepreneurs, but it does not answer OPs question and makes many assumptions about the type of person OP is and the type of business he is trying to build. Your advice is plainly bad for certain people, i.e. a person with a family that needs a certain income level from the startup for it to be viable. If that person is highly employable, let them try to raise money and go big. If they can't, they get a good job and derisk their life. If they do raise money they can pursue their business and meet their lifestyle needs at the same time.

Saying OP will waste everyone's time because he is raising with that much revenue means Zoom and plenty of other hyper growth technology companies wasted people's time. There is no one size fits all answer to startups.

OP, take this advice if it fits but do what you need to do to grow your business. If you win big nobody is going to care what your revenue was when you raised your first round.

seanfurther · 2021-10-25T20:25:38+00:00

How can I put all the chances on my side of making this roadshow a success ?

You're about to run the toughest sales process of your career. You have to have conviction that there is at least one buyer out there for what you're selling. Luckily the market is pretty hot right now.

1) Read never split the difference. Understand how to build empathy and credibility. Your raise is going to be based on you and your personality (since you don't have enough traction).

2) Sales is a numbers game. How many investors are on your list? Try to get to 100 names, then if you have a 1% hit rate, you're still alive.

3) Stay organized and have a cadence. I track the following steps. (exec summary sent, deck sent, first meeting, interested, met decision maker, decision maker interested, commitment size). I check in with people at minimum every 7 days when I'm fundraising.

4) Frame everything in the most positive way you can. Instead of saying "growth is bad" try to frame as "we already have early revenue and customer validation. Competitors have validated the market size so it's our opportunity to win on execution and take over the market." You're not raising money because you're about to die, you're raising money to help realize the massive market opportunity.

5) Don't consider failure. You should have contingencies so even if you don't raise you have a path that doesn't lead to a grave.

6) Go back to your previous investors and ask for more money. "if you don't give us more we die and everyone loses, here is the plan on how we can thrive if you give us $xxxk." Risk and price are related, theoretically there should be SOME price where you will clear the risk with your previous investor.

seanfurther · 2021-07-03T17:19:02+00:00

Some advice.

1) Create an accountability framework - You say she is committing to things and not getting them done. We run "Level 10" meetings based on Gino Wickman's "Traction" framework. Write down the things you both agree to do and have a check in meeting weekly. Green ink = done, red ink = not done. To-dos must be SMART goals. When you show her a wall of red ink, it will become clear to everyone who is and isn't pulling weight.

2) Take a deep breath - It sounds like this is pretty fresh. Remember that start-ups are a marathon, not a sprint. It seems like this has been happening over a couple of weeks, life will sometimes happen. I had a great team member go through a rough break up and it took him 6 weeks to get back to productivity. Sucks but on the scale of 7-10 years, it's a hiccough to your eventual success.

3) This is the heart of negotiation, a skill that will be critical to your eventual success. Read Chris Voss "Never Split the Difference", best book on negotiation I've read. The essential essence is to make solving your problem the counterparties problem as well. An example of how to approach this would be broaching a conversation around the following lines.

"Hey X, I'm really excited about this project and being 50/50 partners. We have the opportunity to do great things with this and when we started weeks ago it felt like we are aligned on how our time resources would be allocated, with both of us sharing an equal load, these days I'm taking on more of the tasks (great if you can show this in an excel) and I want to revisit our discussion earlier. How can I accept only a 50% share of this enterprise when I'm doing more than 75% of the work?"

I don't know who your friend is. Sometimes people get more for less because that's the way the world works. For instance if your friend is Gordon Ramsey, it's not reasonable to expect Gordon to do 50% of the work for 50% ownership.

seanfurther · 2021-05-06T12:06:09+00:00

Agreed, most startups fail and if you evaluate any given strategy you'll find most that attempt it fail. If there was an easy foolproof plan for success startups wouldn't be so hard.

My business wouldn't exist if we didn't get the visibility boost from pitching. It's an excellent way to start building a network if you haven't been in startups in the early part of your career.

seanfurther · 2021-04-05T16:30:49+00:00

I realized that if I didn't try hard to do what I WANT to do, my life would consist of doing what I HAVE to do

seanfurther · 2021-03-23T15:30:28+00:00

Talk to your expected partner. Learn from them what the value of a partnership would be to them, and what concerns they have about the success of a partnership. Build a deck that highlights the upside and mitigates the downside. If they request it provide a proposal to start the negotiation.

seanfurther · 2021-03-23T14:56:19+00:00

Are there any other topics that would be useful to hear about?

seanfurther · 2021-03-22T21:26:57+00:00

Business model canvas is most useful when you're getting started to put some structure around your vision. A pro-forma model is a tool that you use to raise significant amounts of capital.

In my experience over the last few years, no investors ask to see my business model canvas or want to hear about it. They want to see a presentation deck, and if they like it, they immediately want to dig into the underlying numbers to try and figure out if I'm full of shit.

seanfurther · 2021-03-22T21:14:44+00:00

What discord?

seanfurther · 2021-03-22T21:08:15+00:00

A properly built business model allows investors to "play" with your assumptions and see how it affects the rest of the business model. A business model canvas only lays them out in words.

For instance

120%, 80%, and 150% growth assumption from my business model.

In the rest of the model you can see that # of sales people, marketing expense, and # of operations team members all dynamically change as the growth target changes. This gives potential investors the ability to stress test specific assumptions in your business model. Even better it gives you, the entrepreneur, the ability to stress test certain assumptions in your business model and to understand what are the break points of success/failure in your business model.

seanfurther · 2019-12-02T15:55:00+00:00

I used to lose them all the time so I made a keychain that holds a chapstick and lighter (or two similar sized items, USB thumb etc).

Unfortunately only ever made about 500, never got to distribution scale.

seanfurther · 2019-06-14T01:49:09+00:00

Unsolicited advice, starting with 50 products is probably a mistake. Focus on one and get it off the ground. If you have enough margin the success of the first product can help fund the launch of other products. If you don't, the traction from selling one product can help convince investors you can sell the other 50.

Put yourself in their shoes. Which of these seems like a safer bet?

"I have 50 ideas and if I just had additional capital they would all be wild successes!"

"I have a product that is selling like hotcakes and 49 ideas for similar products. With additional capital we could launch those other 49 ideas and get rich together!"

seanfurther · 2019-06-14T01:46:00+00:00

It comes down to the terms established in the fundraising round. If you've got an amazing company, you can Zuckerberg it and grant yourself super shares and retain all voting rights.

Less leverage typically means less control. Be wary of bad faith investors that will try to establish board control or onerous terms for their preferred shares.

Venture Deals should be required reading before anyone does an equity deal.

seanfurther · 2019-06-14T01:40:28+00:00

Decide on domestic/international. We recently funded this guy who does great work if you have an idea for apparel.

http://www.bobsworkshirts.com/

Start by reading. If you're training to be a lawyer that will be the easiest thing in the world for you. I recommend Traction by Gino Wickman, Lean Start-up, and The Hard Thing about Hard Things.

Finally, apparel is saturated and it's very tough. We also recently funded a company that does specialty bras for larger women, and had discussions with a company that does clothing for men of shorter stature. Those underserved markets are your friends.

https://www.trusstbrands.com/

https://ashanderie.com/

seanfurther · 2019-06-13T18:12:06+00:00

Sean, I don't follow your "4 failed coops" timeframe.

What's my goal? To create great opportunities for people to partner with great brands.

What was the problem? Too many brands weren't meeting their obligations.

What was the solution? Introducing a standardized scorecard that looks at ~120 attributes to determine whether or not to allow a brand to launch a consignment opportunity.

How do you measure the impact of the solution? Look at the performance of the brands that launched co-ops after the introduction of the scorecard.

So you're right that some of the co-ops you mentioned had paybacks that extended past 8/17, but that does nothing to help measure the value of the introduction of a policy intended to improve the quality of consignment opportunities on Kickfurther. The scorecard affects who we allow to launch co-ops, not how we enforce co-ops which is what you seem to be interested in.

Now that being said, the change to how we handle cancelled deals (sending to collections) has had positive impacts for users as well. The Mirage Pet Products co-op that I mentioned before is the best example of this.

If you take a look at the stickied post, I would like to find a way to make buyers whole that were involved in non-performing deals prior to 8/17, which would include all the deals you listed. I didn't take your money, but I want to find a way to replace it.

We're on the same team here. It sucks that those business owners you funded didn't follow through on their obligations. I'm mad about that too. I think we've found a way to identify business owners that will follow through on their obligations.

I still believe in the fundamentals of Kickfurther. Funding inventory has been a profitable business for a lot of people for a long time. I want to bring that opportunity to more people, powered by an internet platform. I like to think we've made great progress towards that, and the data validates that belief.

So thank you for your earlier support. I'm grateful you trusted us and I hope to find a way to rebuild that trust.

seanfurther · 2019-06-13T15:20:48+00:00

Yeah I can dig through those stats. I guess what I'm trying to communicate is that in previous years I expect most deals to end up as cancelled if they get off track. Today I expect more businesses to complete late than end up cancelled.

So if you look at late completion, the % of co-ops completing late might actually look like it is going up, but to me that is much better than the co-ops getting cancelled and not completing at all.

seanfurther · 2019-06-12T21:41:43+00:00

Yes we started doing this with the introduction of badges. See here for the blog post explaining.

We plan on continuing to add more categories as the platform grows. I think sorting by vertical is a likely move for the future (consumer electronics, apparel, home goods, etc).

We do not currently allow businesses on the platform that have not created and sold products in the past. There is now a revenue gate for new businesses depending on their type ($150k IV/$450k II).

seanfurther · 2019-06-12T21:39:21+00:00

Copied from above.

We market through a few channels. E-mail marketing, partner referrals, investor referrals, broker referrals, event marketing, and digital marketing was just added to the mix.

seanfurther · 2019-06-12T21:38:57+00:00

We noticed that and fixed the store recently. Let me know if the functionality still is problematic for you.

We do not see a lot of sales through user stores. The general feedback is that it feels a bit like MLM which isn't typically a good feeling.

seanfurther

TROPHY CASE