Part 4 from my first “CEOs Dinner…”

There was an angel investor at this dinner who seemed to be FULL of yummy stats, every now and then he would shout some out. Here was one of my favorites…

Last year, in 2007, the average Venture Capital investment into a company was $7 Million…

So, you can tell, if you’re thinking about starting an internet company and think that it’s a GOOD thing that you only need a few hundred thousand dollars…think again.

Many times, VCs (venture capitalists) don’t even want to get involved unless they can put in a few million (it’s not big enough fish for them otherwise). In a case like that, you likely want an ANGEL investor - but there are down sides there too.

I’ll talk more about the difference between an angel investor and a venture capitalist soon…

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Part 2 from my first “CEOs Dinner…”

After the banker spoke, they had a local Venture Capitalist come spend 20-30 minutes giving some tips for anyone looking to raise money through VCs. He gave one tip that I’ve actually heard before as well and that makes a TON of sense.

Anyone who’s getting ready to go raise a “VC round” whether it be round A, B or even later will first develop a list of the firms you are going to prospect. By nature, you probably have a list of VCs that are your “top list” or the ones you really hope you’ll find.

Do yourself a favor - put those ones away for a bit, contrary to what your gutt may say - DON’T pitch them first.

Find the ones on your list that you are “OK” - nothing special and you wouldn’t be too heart-broken if they turned you down. Pitch THEM first.

Basically, it’s batting practice. You’ll need to refine your pitch, you’ll see what the common objections are and you’ll get much better at it.

Save the real goods for the VCs you really want. If you pitch the good ones first, you’ll screw it up (potentially). Also, it can’t hurt you to walk into the good ones with other VCs already interested - just knowing that gives you a TON of credibility.

So, think of pitching VCs in reverse order - save the best for last.

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Part 2 from my first “CEOs Dinner…”

One of the active angel investors there shared MANY stats with us, one of the stats he shared was the following:

“80% of venture capitalists invest within 100 miles of where they are…”

This does not surprise me and it can a major impact on you. If you’re sitting in Wyoming, trying to build a “web savy” business and need to raise money…you’re likely going to find investors in the Silicon Valley area.

So, start thinking - are you willing to MOVE to get the money? Venture capitalists know a certain area, they also feel they can have better hands-on control - convincing them to invest far away is an un-likely task.

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I was recently nominated to join a local, fairly exclusive, “CEOs Club” where we meet once a month for dinner and have guest speakers from all around the “business building” spectrum.

Late last week was their second meeting (the first I attended) this year, I had no idea what to expect but was pleasently surprised.

The structure is that we all get there about an hour before dinner and stand around networking. After that we grab dinner and sit down to eat. As we’re eating, the guest speakers start presenting on the topic of the day - the presentations are about 1 - 1.5 hours.

The networking was obviously one of my favorite parts of the meeting - I got a chance to hear about some amazing companies and great ideas.

The actual “training” session was OK, I’d give it a 6 on a 1-10 scale, but I did learn a few things that I will blog over the next couple of days.

Here’s something I learned - Part 1 of a series I’ll do over the next few posts…

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Getting Bank Loans - Displaying TANGIBLE Value In The Intangible…

There was a veteran banker presenting and she mentioned something that I think is important for everyone to know. She said that many times banks prefer to back companies that have a lot of “physical” assets like equipment, etc…

This is because that equipment serves as “collateral” to the loan. However, this is a big issue for “internet” and many “technology” companies who’s biggest physical assets are a few computers.

In a situation like that, it truly is hard to get a bank line of credit. A tip she gave…

1. If you’re profitable - TELL THEM THAT. She said to make it very clear if you’re cash flow positive, they like that.

2. If you own “digital” assets - For example if you have a customer list, lead list, etc… These are still valuable things that the bank could sell if need be.

So if you have an internet business, don’t despair - you CAN still get a line of credit from a bank. It’ll just be harder and you’ll have to apply to more banks to find the right “understanding” banker.

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Just a fun and useless post, between Thursday and Friday night, I ended up staying up straight a total of 44 hours without any sleep (maybe 30 minutes in a plane, but that was not really sleep).

During this time, I spoke for 90 minutes at a conference and I traveled across the country, I also wrote my entire 90 minute presentation from scratch…

I’m writing this after having had a great 8 hours of sleep, but honestly, last night had I wanted, I could have kept on going.

My record is 56 hours - I did that last September when our company launched a major product and we had a “melt down” to say the least.

I’ve heard before that when you stay up very long, you go through phases and that after a certain time you’re not actually tired any more - you get “focused” but maybe a bit slow. I think I can agree with that…

What about you? What’s the longest you’ve stayed up without any sleep?

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Sorry I missed Friday for a post but I’ll make it up the next week, I have a TON to talk about (really, I have no idea how I’m going to get it all out - I’ll try mulitple smaller/quicker posts).

The reason I missed Friday is because I was flying around all day. I had to make 1 stop to speak at a conference and then immediately leave to fly across to country to another conference that I’m just attending.

To do all this, I used Northwest Airlines and I found a perfect picture to describe I feel about this airline so far (to the left)…

Thanks to my Delta miles, I was able to get upgraded to First Class all the way around for free (if I had paid for this, I’d be even more mad). Overall, the planes were old and dirty. The seats were not leather. There was no entertainment center (even for a 5 hour flight).

When I tried to get into the “Club/Lounge” - they said it was only for International First Class passengers (what the hell is that?).

I don’t know if I’m spoiled after my experience with Qatar, but this was just not up to par.

I’ve now flown First Class in United, Delta, US Airways, British Airways, Virgin Atlantic and hands down, Northwest is worse than all of them by a LARGE margin.

If you can avoid Northwest, I would.

The ONLY impressive thing about Northwest is their HUB in Detroit - I’ve never seen a terminal like that, very impressive. But, if your planes suck, what’s the use of a good hub?

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I’ve said it before on this blog that the bigger your company gets and the more hiring you do, you can expect YOUR role as the CEO to move towards more “management.” Management may sound fun, but it can make any “true” entrepreneur want to ram their head into a wall.

As boring as it may seem, I am now convinced that it is a truly vital part of the business - without it, an entrepreneur will simply run the company bankrupt.

Some of the “not so fun” parts of being management include (but are not limited to) the following…

1. Financial modeling (for you, your company, the investors)

2. Financial tracking - One of the main key roles of the CEO and CFO are really “cash flow management” and making sure that the company has money and is not in any hot water. By tracking your actuals vs. your model, you have the ability to predict any cash problems months in advance.

A good CEO will catch these and solve the problem early rather than getting caught by surprise (a pure entrepreneur would probably have no idea until the lights went out).

3. Hiring - This means spending MORE time doing modeling and negotiating for key hires.

4. Management Meetings - “So…what color tissue paper should we get for the bathroom?” This is an on-going joke that the bigger companies get, the more meetings their management has over silly things - the more time they waste, etc…

Meetings are vital and important - but if you plan on using them to discuss “junk” - you’re killing your company.

5. Strategy Development - Yet again, more time with spreadsheets and “data” trying to figure out what products to launch and which direction to go in.

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What sparked this post?

One of our executive team members just recently made an observation that I was lately either spending all my time in spreadsheets and modeling or on the phone. When she said that I had one of those “AH HA” moments where I thought … “it’s begun…there’s no turning back now.”

I’ve learned more about Excel in the last 2 weeks than I ever wanted to know or planned on learning. But, at the same time, this is the first time where I truly feel like I have a good grasp on the “health” of our business. I know EXACTLY when to expect problems and even better, I know exactly when we can raise or need to lower our spending.

For the first time, I feel like I have my fingers on the pulse of the business - all hail Excel!

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I used to be an avid “Business 2.0″ magazine reader, I’d wait at the door like an excited dog, waiving my tail the day it came to my mailbox. The day I found out that it was being discontinued, I think I may have actually shed a tear. Well, long story short, I just now convinced myself to start reading Entrepreneur magazine.

Nope, it’s not the same at all (I’ll do a full review later)…but, it’s not THAT bad either.

The April 2008 issue is the first one I’ve actually sat down to read and I was immediately caught by the Editor’s Note.

She repeats a statement that was made by an entrepreneur and her friend: “Every day I go to work, I’m either excited or I’m afraid…” This sentence really caught my attention because it was the quickest way I’ve ever seen someone else sum up my day!

The more I think about it, I bet LOTS of Entrepreneurs feel this way - if you really think hard, you’ll find that it’s true.

I either have days where I run into work high on my horses, ready to “close the big deal” and take over the world.

The other days, I’m worried about payroll, growth, meeting deadlines, board meetings and god knows what else.

She actually continues to talk about how both excitement and fear are the same emotion (physiologically) and that your environment and how you REACT to it is what either converts the emotion into excitement of fear (that part was a bit over my head).

So, what about you? Do you find yourself either excited or afraid?

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Everyday something about Google continues to surprise/amaze me. Besides the fact that there stock is getting slammed right now because of flat numbers, lack of growth, etc… What really shocked me was the recent salaries the two Google founders, Sergey Brin and Larry Page and the CEO Eric Schmidt just took.

Google’s stock is sitting from a high of above $747 to now only $450, nearly a $300 drop - yet still, Sergey, Larry and Eric have the NERVE to take such outrageous salaries?

What did they take?

$1 flat - that’s right, their salaries were just $1.

But, before you feel bad for them, know this - both the founders are still worth close to $13 Billion EACH and the CEO is worth just over $4.3 Billion…

So, yes, if I was worth that much, I’d take $1 as a salary, but for now - please give me my money! 

Source of content - VentureBeat.com

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BRING IT ON!

I just applied, I was actually just scrolling the site and it showed up so I took about 15 minutes of my time to apply - heck, why not?

Entrepreneur Magazine picks two “Entrepreneurs of The Year…”

1. Entrepreneur of the Year: Must have less than 100 employees in 2007 and more than $3M in revenues.

2. Emerging Entrepreneur of the Year: Must have had less than 5 employees in 2007, more than $500,000 in revenues.

It’s the same application though - I guess they automatically shuffle you one way or the other. Guess which one I’m shooting for?

The application is pretty easy - although they really should offer more insight on how MUCH they want you to write in the short essays. You basically give some general business information, then you fill out a few questions:

1. Have you owned previous businesses? (briefly explain)
2. Briefly explain how have you impacted your industry?
3. Briefly explain how you have impacted your community?
4. Briefly explain how you have impacted your employees?
5. Briefly explain how you have impacted your customers?

I wrote about 200 words or so per question and think I had pretty good answers! Anyways, go apply, even if you make the Top 10, they give you pretty good publicity…

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