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July 19, 2008
- Featured Post: Ten Legal Mistakes Made by Entrepreneurs
Here is an excerpt of a well written article (appropriate for all entrepreneurs) posted on the Harvard Business school website.
Executive Summary:
The life of a startup can be precarious, a wrong turn disastrous. Harvard Business School professor Constance Bagley discusses the most frequent legal flops made by entrepreneurs, everything from hiring the wrong lawyer to puffing up the business plan.
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“I’ve heard many war stories,” says Harvard Business School associate professor Connie Bagley, reflecting on conversations with former students who have started business ventures. To prepare current students for the HBS Business Plan Contest, Bagley gives a seminar in which she shares these war stories with the prospective entrepreneurs, in the form of a list of “top ten” legal mistakes often made by the unsuspecting. In addition, Bagley teaches the second year elective course, “Legal Aspects of Entrepreneurship,” which covers the waterfront of issues typically faced by entrepreneurs in starting and running a business, including securities and intellectual property law issues.
Bagley’s teaching and research focus on legal aspects of entrepreneurship and corporate governance. Before coming to HBS in 2000, she taught at Stanford Business School, and prior to that she was a corporate securities partner in the San Francisco office of the law firm of Bingham McCutchen. She is author or coauthor of several textbooks, including the just-published second edition of The Entrepreneur’s Guide to Business Law.
Bagley recently met with Harvard Business School’s New Business magazine, and talked about the legal issues commonly faced by entrepreneurs, as well as her thoughts on how to successfully deal with them.
In Bagley’s view, there is a tendency on the part of many entrepreneurs to think that the lawyers can handle the legal issues and to delegate too much to the attorney.
“While the language of the law can be intimidating, the concepts are usually quite straightforward,” she says. “Lawyers tend to be risk averse, and if you delegate to them you will usually stay out of legal trouble but can often compromise your business objectives. My goal for the course—and for the coaching I give entrepreneurs—is to give them sufficient comfort with the legal concepts to feel confident in driving the process, to understand the ways in which the law is a constraint, but also the ways in which it is a tool that can help you create and capture value.”
Click here to read the full story
Constance E. Bagley is an associate professor in the Entrepreneurial Management unit at Harvard Business School.
- 1 day
source: (4 entrepreneur) - 10 Tips for Entrepreneurs Seeking Angel Capital
By Jim Roberts, special to WRAL LTW
CHAPEL HILL – So how should an entrepreneur go about winning investors? Here are my 10 recommendations – plus a bonus.
1. Get to know the investors before you need the money. This is a common piece of advice even if you are looking for a bank loan for your home. The more rapport you have with the people you need money from, the easier and less time it will take to get the transaction done. Start getting to know the investors even before you leave your job to start the company.
2. Balance your appeal to the investor’s greed by also addressing their fear. This is not a popular piece of advice because some people believe you only to address the upside of a deal, but I think it is very valid. I once had an investor tell me “I invest when I find I can’t say no.” Well people are saying no because the risks outweigh the reward and obviously the risks have not been addressed enough to make the investor comfortable. Address the fear the investor has if the market situation changes. Will your business be able to adjust and how? (The how is addressed by having a great management team lined up that could take the company in a new direction within the industry.)
3. Be ready to negotiate terms. The investor may want a higher percentage. In a variety of situations, entrepreneurs are afraid the investors require too much equity to make the deal happen. The old saying goes “Do you want to own 100% of a tiny company or do you want to own 5% of a company the size of Microsoft?” Owning a small piece of a larger company is a much better deal. Be flexible but also make sure you own enough of the company to make it worth your while. If you own too small a percentage, you may feel like this is more of a job versus a chance to be a part of something big.
4. Do your due diligence on the angel investor. They will look into your background. It is a safe bet that a good investor is going to call around town asking other business people about you and your company. They are going to Google search your company on the Internet. They are going to do deep research on your company. Well you need to do the same with the people who might end up owning a piece of your company. Call around to your peer entrepreneurs who this angel investor has worked with in the past.
5. Deal with accredited angels to avoid the 2 AM phone calls. This is a tough situation for inexperienced entrepreneurs. The inexperienced entrepreneur is so eager to find an investor that it is tempting to take the money from anyone willing to write the check. But the downside of taking money from inexperienced (or unsophisticated or unaccredited) angel investors is their lack of experience with the challenges of startup companies. No matter how many times you hear about startups, living the experience of struggling to make payroll or not receiving the client’s payment on schedule can cause some people to really struggle with the stress. If you deal with inexperienced angels, you may end up getting that 2 AM phone call about getting the money back or getting the return on investment. If you find yourself in this situation, you should give real consideration of actually returning the money if this is possible within the financial situation of the company. Experienced angels understand the risks and only invest “Mad money or Vegas money” that they can afford to lose.
6. Network with other experienced entrepreneurs to learn from success. There are many organizations for entrepreneurs and a variety of economic development organizations meant to help entrepreneurs succeed. Of course, the CED is the model of entrepreneur development and entrepreneur networks. Consider participating in the FastTrac program meant to take an entrepreneur from business plan to investor ready. Take a look at the SBTDC program called Are you Investor Ready? Attend conferences such as the SEVC, CED’s Venture 2008 in April or the InnoVenture Conference in Greenville, SC in March. These conferences allow you to see polished entrepreneurs who have been screened and qualified as an example of what your company needs to look like before you are ready to meet investors.
7. Register as a Qualified Business Venture to help with angel investor tax credits. North Carolina and Virginia have an investor tax credit for people who invest in companies below five million dollars in revenue. In North Carolina, this tax credit is called the Qualified Business Venture Tax Credit. The QBV is up to 25% of the investment made as a tax credit on North Carolina income tax. Your company must be registered with the state for your angel investors to receive the tax credit. While I would not say the investors get involved just for the tax credit, the QBV can help someone get off the fence if they are undecided.
8. Practice your pitch to perfection with board members or an advisory board. You MUST, MUST, MUST practice your pitch with people who are familiar with good presentations. Practicing with your wife, child or dog does not count. Someone with experience will give you the real feedback you will need to ensure your slides are appropriate and have the impact needed to impress an investor. Guy Kawasaki always says your slides should be 10-20-30. 10 slides, 20 minutes and in 30 font size. (Older investors may need the extra font size according to Kawasaki.)
9. Get lined up with the right professional service providers. Okay, I know he is cheap, but Uncle Joe, the real estate attorney is not the right lawyer to represent your best interests as a startup technology company. Take look at the sponsor pages of entrepreneur council networks and conference brochures for the professional service providers who are active in helping entrepreneurs. Ask around with other entrepreneurs of what legal and accounting firms took their companies to the next level. Chances are there is a firm in your area or within two hours of your office that has a successful track record. And there is even a better chance that these higher profile accounting and legal firms know the active angel investors in your area.
10. Know how the investors are potentially going to exit and make their money in multiples. At the end of the day, these investors want to make money if they are writing checks to own a piece of your company. Be prepared to tell them how they are going to get the money out of your company. Have a list of potential acquirers ready when the question is asked. Of course, the Initial Public Offering is a potential exit event but is becoming more rare as an acceptable answer when you are a true startup looking for angel money versus when looking for venture capital. Angel investors don’t want a quarterly dividend check. They want to make multiples on their money. If they write the minimal $25,000 check, they are hoping to make $250,000 within five to seven years. So your business
BONUS: Read Bill Warner’s pieces on Local Tech Wire. Sure this seems like a shameless plug for LTW and Bill Warner. But let me give you some insight. Our entrepreneur council paid Warner as a consultant to give one on one “tough love” investor presentation skills seminars to five entrepreneurs in the Asheville area. Within the next five months, these entrepreneurs raised $3.1 million dollars in funding in the Asheville area. This is quite an accomplishment in the mountains. Warner is an expert in knowing what investors are looking for because he is an investor and runs an investor group. He gives frequent expert advice in Local Tech Wire for free.
About the author: Jim Roberts was the former founding Executive Director of the Blue Ridge Entrepreneurial Council and the Blue Ridge Angel Investors Network. A new resident of the Triangle, he recently started a new blog about Leadership and Entrepreneurship. He can be reached at jimRroberts@yahoo.com.
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- 1 day
source: (4 entrepreneur) - Featured Post: 10 Ways Generation Y Will Change the Workplace
by Ryan Healy
There’s no doubt that Generation Y will fundamentally change corporate America. It’s already started. Managing Gen Y is the hot topic among consultants, Human Resource executives and talent management professionals. For a Gen Yer like me, this is great news.
We have a voice, and we have the ear of the decision makers. Not bad for a group of lazy, entitled, twentysomethings. We’ve learned the importance of balancing work and life from our overworked parents, and we’ve watched our older siblings and cousins struggle with their baby boomer bosses who refuse to retire. Now we’re primed to change the workplace for the better. Here’s how we’ll do it.
1. We’ll Hold Only Productive Meetings
Meetings are important, sometimes. A good meeting will pull everyone to the same page while motivating them to get the work done. It’s rare when that should take more than 30 minutes. Efficiency is the name of the game with Gen Y. We know that a drawn out meeting really means, “we have no idea what we’re doing,” and these time suckers actually halt productivity and stifle creativity, the qualities that they were supposed to encourage. As soon as Gen Y is running the show, watch wasted meeting time drop dramatically.2. We’ll Shorten the Work Day
The work day is eight hours. Or so they say. A real work day for most of us, if you include the commute, lunch, breaks and maybe dinner, is at least 10 hours. But how many hours of the day are actually spent doing real work? I would guess about half. To truly balance work and life, you cannot mess around and waste time at the office. Gen Y knows this. We’re productivity machines; we will figure out how to get as much done in six to seven hours as the average boomer does with his eight.3. We’ll Bring Back the Administrative Assistants
Back in the day, nearly everyone had a secretary. These days, you have to be a CEO or high level executive for a Fortune 500 company to have an assistant. Sure, this saves the company a ton, but Generation Y won’t stand for it much longer. We recognize the value of time. Two extra hours per day not filing papers and mailing checks adds up to over 500 extra hours per year that we can spend with family and friends. Even if it comes out of our own pocket, Gen Y will cough up the extra dough to get a part time or virtual assistant.4. We’ll Redefine Retirement
Retirement is dead. It’s dead for a number of reasons, including the issues with social security and middle class America’s inability to save any money. But Gen Y will figure out how to save money to retire–we’re already demanding 401K’s and excellent benefits. However, we will re-invent retirement by taking multiple mini retirements instead of calling it quits a few years before its time to croak. Maybe in our late twenties we’ll take a few months just to travel the world. Then, as we approach parenthood and our kids grow up, we’ll take a year off to enjoy time with our family. Then we’ll return to work, refreshed and ready to go. When we hit 65, it will be the new 45 and we’ll have a solid 15 to 20 years left before we take our final, very brief, mini retirement.5. We’ll Find Real Mentors
Gen Y is obsessed with career development. We understand the importance of great mentors and we seek them out. The problem is that many older workers weren’t effectively mentored and they don’t always know how to mentor Gen Y. When it’s Gen Y’s turn to be senior mentors, we’ll know how. As we seek mentors now we’ll learn what works and what doesn’t. And from the time we enter the workforce until the time we’re senior employees, the smartest Gen Yers will figure out how to mentor up. We will teach our older co-workers about new technologies and the power of online communities, and they will respond kindly by guiding us through the insane office politics that exist everywhere.6. We’ll Restore Respect to the HR Department
Ten years ago, human resources got no respect. Today, companies are just beginning to see the importance. Gen Y recognizes that people make the company successful. Maybe it’s not tangible and maybe it’s not easy to see the direct ROI on keeping people happy, but happy people create successful organizations. All you need to do is take a look at Google, the company that’s quickly taking over the world, to see that happy people are successful people and successful people make a lot of money for themselves, and for the company. HR is not a cost center, its vital to the bottom line.
7. We’ll Promote Based on Emotional Intelligence
For some reason, companies assume that when you pay your dues and you know the business, you can be a manager. They’re wrong. The truth is that seniority does not make a good manager. People skills make a good manager. By the time Gen Y is running the world, we will be smart enough to promote people to managers because they can manage, not because they’ve worked for ten years. For managers, personal work must come a distant second to developing employees both personally and professionally. If you can’t help others, you don’t deserve a promotion to manager and you will be left behind.8. We’ll Continue to Value What Our Parents Have to Offer
Sure, Gen Xers can laugh about it now, but Gen Yers respect our parents, and our parents are interested in every part of our lives, even when we’re 30. Don’t be surprised to see Gen Y employees giving their parents a tour of the office and calling up mom and dad for a little advice on their lunch break. It’s not about being babied or refusing to grow up, it’s about a level of mutual respect that Gen Y has for our parents and our parents have for us. My mother is coming to visit in a couple weeks, and guess what our plan for the day is? A tour of the office and a couple hours of work for each of us before we go out and do the tourist thing.
9. We’ll Enjoy Higher Starting Salaries
Sure, Gen Y is interested in volunteering, putting a halt to global warming and all that other good stuff, but we’re not our idealist parents. We watched our parents get laid off and we know that companies look out for themselves, so we do the same. Gen Yers will gladly accept a higher starting salary than promises of raises and promotions that we may never see. Additionally, all we have to do is go to Payscale.com or some other site to find out what the average starting salary is. Then we will ask for more, and we’ll probably get it, because we know we can get it elsewhere if your company won’t give it to us.Read the full story ( from www.brazencareerist.com )
- 1 day
source: (4 entrepreneur) - 15 Entrepreneur Blogs Worth Reading
According to Wall Street Journal, here is a list of 15 entrepreneur blogs worth reading.
Posted by Wendy Bounds
The best entrepreneur blogs – and often the most successful ones — do more than just promote the entrepreneurs or their projects. Star power can draw attention, but it won’t sustain it if the blog doesn’’t “give.”
Give is a broad term. You can give tangible tools and information to help build a business. Or a motivational story that inspires someone to try an idea. You can give a laugh. You can give food for thought. You can give debate. You can give of yourself, and if you’re interesting enough, people will come back for more. Below, some examples of entrepreneurs who do this:
Dominate a Niche:
Tom Szaky writes The Eco-Capitalist, a blog about driving profits by being environmentally and socially responsible. Mr. Szaky is chief executive officer of Terracycle, a company that finds creative ways to reuse waste in products like plant food, cleaners and tote bags. Recent posts include: “Will Your Customers Pay to Go Green?”Ecommerce blog Get Elastic is another example. The blog shares general strategies for selling on the Internet. Recent posts include: “9 Privacy Policy Usability Tips,” “Cart Abandonment,” and “Dads and Grads: Missed Merchandising Opportunities.”
Motivate/Inspire/Teach:
Two well-known bloggers in this category are Seth Godin and Guy Kawasaki. Mr. Godin was founder of Yoyodyne, an interactive direct-marketing company, which Yahoo Inc. acquired in late 1998. He is an author, blogger and public speaker, and his marketing blog often inspires by giving broader direction in business and life. (Recent posts talk about serial numbers and financial advice for grads.)Mr. Kawasaki is a managing director of Garage Technology Ventures, an early-stage venture-capital firm. He’s an author and public speaker and his blog, How to Change the World, also includes a link to a job board, which is a motivator. Like Godin, he often provides usable lists to readers. One example: “The Top Ten Stupid Ways to Hinder Market Adoption.”
Kevin Kelly’s Lifestream is in this vein. Mr. Kelly, who helped launch Wired magazine in 1993, recently posted about the “Power of Failure” and how to Bribe Your New Employees to Quit. (The ones that aren’t committed.) Malcolm Gladwell, author of the Tipping Point, is another such go-to blogger for entrepreneurs.
Offer Tools:
Most entrepreneur blogs do some of this, though several specialize in it. WorkHappy.net by Carson McComas writes about “killer resources for entrepreneurs,” often calling out new online tools. Anita Campbell pens Smallbiztrends.com with tips and strategies on issues such as business plans, picking domain names and going mobile. So does John Jantsch’s Duct Tape Marketing and Drew McLellan’s Drew’s Marketing Minute.Entertain and Promote:
The best route to self-promotion is through entertainment. Holly Dunlap fuels marketing of her fashion company with a juicy, photo-laden online diary chronicling her dinners, parties and, sometimes, hangovers. Justine Ezarik, a graphic/Web designer and video editor, began transmitting her life via Internet video last year and has transformed that success into multiple avenues, including her blog, tastyblogsnack, where she dissects technology and entertains us.“If You’re Interested in My Company…
…maybe you’re interested in me – or more about my company.” These blogs feed loyal customers’ desire to connect with a brand. The founders of Honest Tea, Seth Goldman and Barry Nalebuff keep such a blog. Craig Newmark of craigslist blogs regularly on anything he finds of interest (finches, politics and “Sex and The City”).One of the most successful examples is billionaire entrepreneur and investor Mark Cuban, owner of the Dallas Mavericks. His Blog Maverick waxes on everything from cutting-edge technology to the NFL and salary caps and gets tremendous response from readers.
A warning: Readers have typically already bought your product, so don’t just flog it; give them something new to enjoy.
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- 1 day
source: (4 entrepreneur)
July 18, 2008
- Greening Business
The world often perceives marketing as a wasteful practice. However, it is still essential in every business. The good news is that companies like ours are manufacturing with greener, more resourceful printing processes and materials now more than ever. Mugs, pens, tote bags, the list continues to grow of items that are both eco-friendly and/or promote eco-friendly lifestyles.
My name is John Simonetta and I want to let businesses know that they really can go green. From packaging to uniforms to promotional items to printing needs, there are cost effective marketing solutions that allow businesses to lower their impact on the planet without sacrificing the quality of their brand.
In this blog I will highlight some of the new promotional and print solutions that are now available to businesses and organizations looking to Go Green with the marketing collateral.
If you have any questions regarding products mentioned on this blog please contact me at green@simonetta.us.
Thank you,
John Simonetta
www.proformagreen.com- 2 days
source: (Ecopreneurist)