Video: An inside look at early-stage equity capital

In my course that teaches the “flavors of capital” we dedicate a large segment to understanding early-stage equity financing: aka angel and venture capital. Below are links to a video that walks you through a quick, inside view of how this flavor of capital operates, what incentives are at work, and how best to optimize your odds of success. Each segment is bite-sized at under 5 minutes :). As always, your input is greatly welcomed!

Flavor V: Equity

Positioning: cheap, convenient, or premium? Pick any two!

Last week students in my Intro to Entrepreneurship course were working through the Startup Marketing lecture. There was a delightful discussion afterwards as the students explored the idea of “positioning.” This is a topic that was very tricky for me until a wise mentor showed me a trick that plays a central role in the lecture: the positioning triangle. This is often summarized as “Good, Fast, or cheap – pick any two :)”. I prefer the more broadly applicable terms of “Premium, Convenient, or cheap,” but they mean the same thing. Below is a graphic meant to help communicate the idea.

The boil down is that, barring revolutionary technology, it is very hard to be all three of these things. Most businesses are lucky if they can pull off one of these, but certainly no more than two is practical for the overwhelming majority of startups.  Lets look at each in a little more detail:

  • Cheap – Saves me money! This does not mean “shoddy.”
    Examples: Dollar stores, the Tata Nano (car), discount retailers, or feature phones.
  • Convenient – Saves me time OR gives me more flexibility.
    Examples: McDonalds, Toyota Corolla, Walgreens, pre-payed phones
  • Premium – Gives me lots of features I can’t get elsewhere, often (but not exclusively) this includes prestige/status
    Examples: Whole Foods, Lamborghini, Nordstrom, iPhone

I asked my students to image three versions of their ventures, each version specialized on one corner of the triangle. To help them along, I gave a silly example… Start with the basic idea of a kabob stand. Now apply the three positioning extremes…

  • Cheap – low quality (but perfectly fine) ingredients, simple menu, low prices, with the Kabob stand migrating between places they are allowed to loiter at for free. People pay with cash only to avoid credit card processing fees and the logistics of accepting credit cards at a mobile venue. The kabob stand is a re-purposed taco kart lacking frills. It only allows for one employee to operate it and who must Do It All.
  • Convenient – Same food, but now the kabob stand is actually a kabob truck. The owner is paying “rent” so he can park at high-traffic locations at the right times of day. He has social media feeds that allow people to find him easily. He takes cash, credit, debit, etc. Multiple people can fit in so they can work multiple windows while a dedicated cook uses nice equipment to crank out the food fast.
  • Premium – This is not your father’s taco cart! This is a STYLING vehicle, it oozes the ambiance of the cultural tradition of the food they serve. The employees are dressed up in costume. The skewers are high quality. Ingredients are top notch. The spices and sauces are amazing, and all “secret.” This truck arrives only at the coolest parties, unannounced, and serves out its food along with crazy ethnic music blasting out of a killer sound system. People pay through the nose… but they walk away not only full, having enjoyed a great experience, but with a special kabob stick you can only get from them. Sometimes those sticks are collectors items with crazy promotions written on them.

Video: Best practices in written documents for funders

Funders are overwhelmed with applications. So overwhelmed they often allocate only 15-30 seconds to the initial review of each applicant… and based on that brief review they disqualify 50-75% of them! Those of you who have followed my blog and twitter feed see my own examples of this – simple mistakes people make that get them tossed out right away. DON’T BE THAT GUY!

Here is a brief video that shows you some simple rules to dramatically increase your odds of getting through the first level of filtration:
http://screencast.com/t/FsqbvoTDZGIf

Video: From Zero to $$

When I attended my first entrepreneurship education event, my question was the same as most of the students I have now… "What is the step-by-step process for raising money?" Of course there is no one exact answer, but I hate it when people cop out like that! So I have found a high-level pattern that seems to work, and can provide a basic framework that a new entrepreneur can work within. I describe this framework in this video: http://www.screencast.com/t/NTczYzZjZGIt.

Video: Fundraising Communications

Most of us are under the belief that the way to get money is to fill out lots of applications, send them to lots of places, pitch like crazy, play the numbers game, and eventually win. I could not disagree more.

Likewise many of us (myself included when I started) use techniques that make no sense what-so-ever when viewed from the outside.

Here is a brief video describing some of the common mistakes, better approaches, and standard ways to communicate with funders:
http://www.screencast.com/t/MmY2MzU2

Video: “Sustainable” vs conventional ventures

What is the difference between a "sustainable" and a "conventional" venture? If one cares about people and the planet, can you be for-profit? If you want to make a profit, can you still care about making the world a better place? How much should you care about securing capital to help you reach your mission?

These are questions I try to explore in this brief video that is a part of one of the summer courses I am teaching.

Lecture Video: Executive Summary, Good, Bad, & Ugly

I am recording videos for my summer courses. One of the most important lectures I give is a set-by-step explanation of the Executive Summary. The lecture also includes Good and Bad examples of how to do most sections (thanks to Bob Hyers for that suggestion years ago!).

  • Lecture: The Executive Summary