AdVenture Capital is the art of raising the right amount of capital and administering at the right time. This Advice Blog is specifically designed to provide actionable intelligence for companies raising capital and the investors who seek them. It contains practical, relevant and dynamic solutions to pervasive issues. However, it is not meant to replace your own legal and professional counsel.
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By Marty Aquino
22 MAR 12
The cornerstone building block of all business dealings is your reputation. It will open or close doors for you, but if you don’t have one, borrow one from a well-respected connector via a high-level introduction…
It’s the fundamental reason that people care about “brands.” Certain brands like Nordstrom, Porsche, Louis Vuitton and Apple instantly evoke feelings of white-glove customer service, high-performance, build quality or innovation (respectively) because their reputations are based on following-through with their promises. Your reputation is what keeps your customers satisfied and your profits coming in.
“Who Are You Again?”
However, if you’re part of a startup seeking money, it will be the difference between being taken seriously by an investor and being told “we’ll get back to you” –which is investor-speak for “we’re not interested.” Normally, would-be entrepreneurs have a strong-sense of purpose propelling them to turn their ideas into reality. But, they generally have no idea where to go to find the capital necessary (outside of friends and family) to develop their projects.
Enter the venture capitalists, angels and investor groups. Most of them have made it their profession-of-choice to entertain entrepreneurial ideas and fund the ones that truly resonate with them. They have access to lots of cash and as such they get bombarded with requests to fund projects and companies daily. Contrary to popular belief, though, it is not just a matter of submitting your idea via an executive summary to anyone and everyone calling themselves investors.
An investor’s willingness to take a look at your project is directly related to the reputation of the introducing party. For example, an executive summary sent via the investor’s website will eventually get read, but it will be done so with the same level of caring that a nightclub bouncer looks at the people waiting in line to get in. You’re not getting in until he says you’re getting in –which could be longer than you might care to wait. And, even then it’s likely your executive summary won’t make it past the screeners who are looking for every little fault to dismiss you. On the other hand, if your project is introduced by someone with a strong reputation it will increase your odds-of-success dramatically.
When someone makes a business introduction he takes a risk because he is tacitly vouching for you. Well-connected individuals understand that making an introduction effectively puts their reputation on the line. If they introduce a “tire-kicker” or somebody with a “crap project” then the person whom they introduced will think less of them. And, if it happens continuously, it will adversely affect the relationship -devaluing their "connector-credibility." This is why great connectors jealously guard who they know.
If you’re blessed with well-connected individuals in your life, enlist their help to get you high-level introductions with top-level VCs and investors. If you’re not, make your pitch or opening-email to the VC firm as customized as possible. Include names, why you’d like to specifically work with their firm and, most of all, be authentic. It’s that same authenticity that will build you a sterling reputation.
By Marty Aquino
15 MAR 12
The old adage: “It’s not personal, it’s just business” is bunk.
Gangster movies, courtroom dramas and too many business coaches would have you believing that emotion is the enemy. They’d have you think that to be successful you must scheme, plot and ultimately crush your opponents. That’s not to say warfare has no place in business –because it absolutely does. However, the mentality of command-and-conquer business leadership doesn’t work for most companies –anymore.
The World Has Changed
Today, a Maasai-tribesman on the plains of Kenya has access to more information via his smartphone than a White House top-level official did in the 1980s. With advancements in technology and communication, it has never been easier for “the individual voice of the masses” to be heard. And, guess what… They care. Countless blogs, videos, websites, organizations and grassroots movements have been started because of the shared-beliefs of a few or many individuals –simply because they care.
It’s no longer good enough for a business to just open its doors and hope for customers. Today’s customer wants to know what your business believes in. It’s the reason that companies like Apple have such a loyal customer following. Apple believes in “challenging the status quo” with every single product. Accordingly, Apple customers yearn for those distinctions as well.
Bear Your Flag Proudly
People care what you, as the leader of your company, truly believe in. The business world is still brimming with mediocre companies holding on to the outdated premise of keeping “heart” out of their businesses. This represents an incalculably-huge opportunity for passionate, empowered and driven startups. People desperately want to believe in something authentic. Authenticity cannot be measured, but it is instantly recognized. Ardent shared-passion throughout your company fosters such purity.
If you make your business take a stand for what you believe in, they will come…
By Marty Aquino
08 MAR 12
AdVenture Capital is the art of raising the right amount of capital and administering it at the right time. Sounds easy, right? Isn’t the right capital anything equal to or greater than the amount you specified in your business plan? The answer surprisingly is not exactly.
Ready for some sobering business facts? Here are some surprising facts about startup companies:
Fact One: Small business failure rates have increased by 40% from 2007 to 2010*
Fact Two: The failure rate for startups where all assets are lost and investors lose most or all the money they put into the company is 30 to 40 percent**
Fact Three: If failure refers to failing to see the projected return on investment, then the failure rate is 70 to 80 percent**
Fact Four: The predominant cause of big failures versus small failures is too much funding**
Fact Five: Too much funding for an unstable business model can take what would have been a small failure and turn it into a huge one**
“Most startups fail due to lack of foresight, lack of wiggle room in the business plan, bad timing, or lack of funding,” according to Harvard Business School professor Shikhar Gosh. And, you know what? He’s right. The aforementioned facts are a testament to it.
The phrase “AdVenture Capital” was coined by expert startup consultant Will Watson of Transcendent Advisors Group. The phrase embodies what entrepreneurs and investors alike go through when building a startup company. The act of believing in your idea so much that you think it should be justified with tens of millions of dollars –of other people’s money, is indeed a wild adventure.
Carbonwolf Energy “CWE” has developed a proprietary method of funding well-qualified projects and companies that mitigates much of the risk for investors while preserving ownership control for the project developers. We achieve this effect by orchestrating the proper amounts of funding from varying types of capital. In this way, CWE creates a double “win” situation. In addition to added investment security, associated investors get their preferred type of investment (e.g. wind-energy, all-electric vehicle, waste-to-energy, etc.) and project developers, in turn, get the right amount of capital to become World Changers and deny the all-too-common business failure trends mentioned above.
The Right Amount
Is there are a right amount of capital for your project? The startup and capital data would strongly suggest that the answer is absolutely yes - especially when it comes to using outside funding. How do you know what the right amount is? Carbonwolf Energy and its partners look for a number of key factors within each project and compare them to several benchmarks. For example, one benchmark could be the relationship quality of the project's offtakers or buyers. Results like these allow us to eventually generate an amount-range that is generally higher than what the well-qualified project originally anticipated.
At the Right Time
One of the hardest concepts to understand in the capital-raising-game is timing. Leonardo da Vinci is credited with being the first creator of the robot (mechanical not electronic). His robot, clad in German-Italian medieval armor could sit, stand, raise its visor, maneuver its arms independently and was a "hit" with Italian nobility at parties. However, he invented it in 1495 - way ahead of its time. It would be over 450 years later where robots would find commercially-viable and practical uses. The key then to coupling innovative projects and investment capital is to assess the timing. Is it too early to deploy this project? Conversely, is it too late? Carbonwolf Energy and its partners use available data to forecast the disruption, both good and bad to help make this assessment. This timing component can substantially add to the overall success of your project.
Carbonwolf Energy's AdVenture Capital methodology can get World Changers the right capital at the right time. Do you think your project has what it takes? Visit our Funding Solutions Page. Or, Contact Us.
Alternatively, are you an investor who wants to know more about how we seriously mitigate your risk? Contact Us.
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