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Posts Tagged ‘money’

NorthSharkTank

North was recently quoted dropping some knowledge in the article, Real-Life Lessons From Shark Tank on Entrepreneur.com.

Here’s an excerpt:

Know when to pitch. Entrepreneurs with a well-developed product and proven financial success have the best luck with the “sharks,” says David Brody, a managing partner at the venture analysis firm North. “Nothing builds momentum like demonstrating you know how to make a cash register ring,” Brody says. Krinzman cited the entrepreneurs who failed to net funding for their “fun house” in Times Square as an example, saying they sought capital in the idea phase of their business planning.

READ THE FULL ARTICLE HERE

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One of the most powerful forces for managing people, and determining the direction of a business is compensation. That which can be measured and that upon which people will be paid, are both core drivers of a business. The goal of this element is to seek a healthy balance between keeping the entrepreneur focused and driven vs. comfortable and overly satisfied. Is the Management Team paying themselves an excessive amount of money? Do they have a clear bonus structure or is their comp plan way off base?

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Ideally, we’d like to see a compensation structure that keeps the entrepreneur and his team committed, focused and driven to succeed. There should be strong long-term and short-term equity incentives for all employees as well as below market salaries with detailed strategic bonus structure in place.

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The boys (and girls) on Wall Street have been getting into huge trouble these days because of their absurdly high compensation packages despite taking on TARP funds. In many ways this is analogous to the way we look at new ventures. If the company is making no money, or losing it for that matter, than is it fair that employee salaries be above market value?

This is just one of the key criteria forward-thinking investors use when evaluating the strength of entrepreneurs and their new ventures. How do you measure up? Go to www.venturephenomeproject.com to read all 80 criteria and swap knowledge with other entrepreneurs & investors.

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logjamcanoe

The following excerpt is taken from Breaking Through The Broken: The Transparent Guide To Overcoming The Inefficiencies In Early Stage Venture Capital.

A good presentation with a good PowerPoint given by an individual with a strong personality can easily sway a room full of investors into cutting a check. Investors need to be sure they’re not getting charmed out of their hard earned cash and that the great presentation was great because of what was being offered. Investors need a better mechanism for filtering investments, a standardized venture “combine” if you will. There are simply too many new ventures looking for help and money, and the process for filtering these opportunities is still based on a complex network of personal relationships that will never scale to meet the market needs. As the global economy expands and moves forward, new systems and technologies need to be implemented to accelerate American innovation as well.

As we mentioned, trust is key, so an investor may make a move on a deal because it was given to him or her from a trusted individual (as a favor, for example) even though it may not be the best deal for them. Angel networks provide some buffer between enthusiastic entrepreneurs and investors, but more often than not the Angels are the ones who are doing all the screening work anyway; it’s not as if they can just show up with the confidence that all the pitches they see will be high quality opportunities.

The answer to this problem is pretty simple; look at the entire investing ecosystem and see where there are constraints. Then we need to collectively implement plans that remove those constraints. The systems and technologies are at our fingertips, it’s time we stepped up and innovated ourselves.

Entrepreneurs need to stop jumping in just upstream of a logjam and wondering why they aren’t floating downstream to paradise. Here’s a tip; paddle to shore, load your canoe onto your back, and hike around the blockage, and then put in downstream. Ignore the reams of angry entrepreneurs clamoring on and on about how the market is this or how the market is that, or go ahead and join the masses pushed up against the dam who are wondering what will happen next.

If you’re interested in learning more about how a Venture 360 due diligence engagement can make you a more effective and efficient investor or entrepreneur, please contact us by sending a short email introduction to northventure360@dontgosouth.com and we’ll set up some time to discuss how we can help you avoid the logjam.

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While the management team for the company is the one holding the steering wheel for the business, the strategic advisors can either be a GPS navigator guiding the business turn by turn or a sleeping passenger who is only along for the ride. One must determine the strength of the advisory board based upon several elements; board experience, key strategic relationships, compensation, and other crucial doors that this group of individuals can help open. It’s hard to have overwhelming faith in a board carrying the definitive responsibility for the success or failure of a business, it just doesn’t seem to work out that way in the real world. What one should look for is a strong and sensible advisory team who will represent shareholders with smart insights, impeccable integrity, and overall a strategic vision for where the company needs to go to be successful. The compensation structure of board members should also be taken into consideration, as well as the frequency of involvement. Board members should also serve as references for the management team’s experience and abilities. To truly maximize the helpfulness of strategic advisors, both the entrepreneur and the board should be focused, respectful of each other’s time, and share a similar passion for results.

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How Does Your Advisory Board Measure Up?

When looking at a new venture the Advisory board is certainly a point of interest from an investor’s perspective. Are there advisors for the venture? If so, are they well-connected, and have a personal interest in the venture’s success? How important are advisors to the success of a business? Before one fills up a business plan with high-profile names that look good on paper, they should make sure those advisors bring value in the flesh by functioning as proactive contributors around a conference table.

How does your advisory board  measure up? Go to www.venturephenomeproject.com to read all 80 criteria and swap knowledge with other entrepreneurs & investors.

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MAKING THE REGISTER RING

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Sales and marketing is the knife’s edge for all companies, as these two disciplines can make or break any business. It’s always easier to manage growth when there is top line revenue and some cash flow rolling in. A few key elements to look for in the Sales & Marketing strategy: 1) Leveraged sales; is the sales strategy set up in such a way that the business can gain access to an existing pool of potential customers quickly?; 2) Sampling; while there are many products that can be effectively sold without the consumer getting a hands on experience? Do successful products lend themselves to an extremely low barrier of entry?; 3) Viral marketing and distribution strategies or strategic channel partners; one of the most common problems when launching a new business is finding the budgets for marketing the new product or service. Smart entrepreneurs often find highly leveraged, strong word of mouth, strategic partnerships or other distribution channels; and 4) Clear and compelling brand strategy; a unified brand can provide a powerful springboard for all sales and marketing initiatives.

The only way for a company to make money, and let me emphasize this, the ONLY way to make money is through sales.  Everything else (marketing, customer service, etc) either facilitates or supports your sales efforts.  What and how you sell whatever it is you’re selling is up to you, but if you want to make that register ring then  go SELL, SELL, SELL.

This is just one of the key criteria forward-thinking investors use when evaluating the strength of entrepreneurs and their new ventures. How do you measure up? Go to www.venturephenomeproject.com to read all 80 criteria and swap knowledge with other entrepreneurs & investors.

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