The Entrepreneur Forum | Startups | Entrepreneurship | Starting a Business | Motivation | Success
  • Self-Promotion Saturday Now Live!

    Have something to sell? Want to promote your design service or a YouTube channel? SELL-ME SATURDAY is your opportunity to self-promote anything within the sphere of entrepreneurship on one thread... and at no cost. Go There
    Note: Indiscriminate SEO backlinking to questionable material is not allowed.
  • Join 50,000+ entrepreneurs who are earning their freedom and living their dream.

    "Fastlane" is an entrepreneur discussion forum based on The C.E.N.T.S Framework outlined in the two best-selling books by MJ DeMarco (The Millionaire Fastlane and UNSCRIPTED®). From multimillionaires to digital nomads to side hustlers who are grinding a job, the Fastlane Forum features real entrepreneurs creating real businesses with one goal in mind: Freedom— both financial and temporal.

    Download (Unscripted) Download (Millionaire Fastlane) Register
    Registering for the forum removes this block.

Questions about Venture Capital

Remove ads while supporting the Unscripted philosophy...become an INSIDER.

TheDillon__

Silver Contributor
Read Millionaire Fastlane
Speedway Pass
Apr 11, 2016
421
624
254
23
DFW
Hey all!

I notice that I'm on this forum in waves - and every time I come back I feel like I miss you all haha.

My question today pertains to venture capital.

A lot of the advice and material I see on entrepreneurship today subscribes to the Barebones school of thought. These are the hungry entrepreneurs who start with nothing. They hustle their way up to the $5000 they need to start their business. They teach themselves how to program in order to build their app. They learn Paid Search in order to better market their ideas. A lot of material out there exists to support these entrepreneurs.

On the flip side - you have entrepreneurs like @Kak. Entrepreneurs who, having made their name and success, look back and wish they would've dreamed bigger from the start. Instead of taking a barebones approach, they invest their blood, sweat, and time into finding investing partners. Their first huddle, instead of laboring to learn programming and build the functioning framework of an app, make it their first duty to flesh out a plan and find investors.

The questions I have pertain to the second group.

Success can come in all forms, and both schools of thought will undoubtedly see a number of successes (and a thousand times that number of failures.) This is simply an open call to those entrepreneurs who sought outside capital first, in order to explore this approach.

(MODS: If you feel this thread is inappropriate, beaten to death, etc. Feel free to move to #landfill.)

---- Questions ----

1. What do the early days of the capital-acquisition process look like? We're all familiar with the story of the entrepreneur hitting the books to build an MVP, or spending months laboring in the shop to build a prototype. What does this process look like in this approach?

2. What are some aspects of capital-acquisition that most people either misconstrue, or don't even think about? What do you think most people are doing wrong in their approach or their mindset in this space?

3. A small investment can range anywhere from a few thousand dollars, all the way up to half of a million. On either end of the spectrum - this is no amount of money to blink an eye at, and investors will surely want a return on any amount of money they lend. What steps do you take to build credibility and show that you have more than just an idea?

4. How do you identify how much you seek to earn in a seed round? Where do you draw the line of `absolute necessity`?

5. I'm of the thought process that it's much better to give away equity to have a stronger base to build your business on. I don't think it matters whether you have 10% or 100% of a successful business, it's better to have a small piece of a big pie in this case. Does the cost of a share make any influence in how much you seek to raise? (Regarding the question above.)

6. With a "barebones" approach, the workflow can be laid out as such:
a. Get an idea
b. Define the core of the idea
c. Build an MVP
d. Launch the product
e. Gain initial users.

What does the workflow look like of your approach?

7. Books such as The Lean Startup and Four Hour Work Week represent the barebones approach. (Not to say that there aren't lessons to be shared between schools of thought.) What books best represent the capital-acquisition approach?

Thanks!
 

Don't like ads? Remove them while supporting the forum. Subscribe.

smark

Bronze Contributor
Speedway Pass
Oct 25, 2017
94
209
152
Limassol, Cyprus
Venture Capital is something that also interests me as I was advised by an experienced entrepreneur to find investors for my current business venture.

I noticed that this is a topic which does not get much attention on this forum and for good reason; because most businesses will never trult need it to flourish.

Although the questions above are also of interest to me, I think every step of the process after one has found VCs genuinely interested to invest is not as important as actually finding those people in the first place.

Therefore, how does one go on to find investors for their business venture? Anyone have any experiences related to this that they can share?
 

Scot

Salad Dressing Empire
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Jul 10, 2016
2,975
13,784
2,796
Florida
I’ve just started hitting the investor circuit. More so dabbling in it.

Start easy and make profiles on gust.com and angel.co Then, make a pitch deck. Most investors will want to see a quick pitch to determine if they’re interested in talking further.

The best way to meet investors is to network. Just keep asking for introductions from connections.

I started looking at venture because I want to find an investor that has a value add in addition to capital. There are a lot of big good corporations spinning off venture arms so they can help budding businesses grow (and eventually buy them). In my industry, there’s a lot I don’t know. And having an investor(s) that can help me navigate the confusing world of grocery and make introductions can be just as valuable as their money.

I sent off emails to Kellogg’s and Campbell Soup’s venture arms today. Going to tackle a few more tomorrow.
 

Rich Wood

Contributor
Jun 17, 2018
31
77
107
Salt Lake City, UT
I'm not an expert in VC, but have been a limited partner in a few funds. I've also stayed very close to some of the investments our funds have made over the years and been an adviser to a couple of funds.

Keep in mind there are a lot of different funding sources available to entrepreneurs. Angel, VC, and Institutional Money are all helpful in the cash flow chase. Whereas credit cards, debt loans - don't come with equity strings.

Most VC's will look for proven leadership, a track record of success, a VC sized revenue opportunity/market opportunity, and a clear path to hefty financial returns. Most funds have a deployment window - time to send out the money, and a lifespan of 10 years or less to get it back in higher amounts. The primary goal of most VC's is to achieve the highest returns in the shortest time period possible for themselves and their LP's. The good ones will assist you through the financing tranches and series, and clear your path to acquisition or IPO.

Access to VC's come through startup boot camps, tech stars, your local university entrepreneurial competitions, and through pure connection hustle. If you have something truly worthy of investment, you should get multiple term sheets. However it only takes one term sheet to succeed. Also, most VC's for the first round may want to syndicate the deal, meaning a few different firms will get a piece of the available equity pie. This spreads the risk out for them, and also gives your company more assistance. Have your attorney spend a few hours to review the term sheet (a few hundred dollars could save you a lot down the road)

Also keep in mind VC's invest in certain spaces that they know best (clean tech, AI, Mobile, Health Care), they can be industry and product specific. Check their sites for what they have invested in, and ensure they have a positive track record of moving the company along to IPO or positive acquisition. Do your research prior to starting to engage with them.

Best of luck in your pursuit of financing!
 

Arun Siva

aspiring 大君 of the bourgeoisie
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Aug 31, 2016
1,195
2,021
568
NORD-TRONDELAG
I sent off emails to Kellogg’s and Campbell Soup’s venture arms today. Going to tackle a few more tomorrow.
hope something bites! the work has been done now somebody just has to say yes
 

smark

Bronze Contributor
Speedway Pass
Oct 25, 2017
94
209
152
Limassol, Cyprus
I’ve just started hitting the investor circuit. More so dabbling in it.
Best of luck! Will be in a similar position as you in 6-12 months from now . My only "problem" is finding people or firms with experienced in the luxury goods sector that I'm currently making my way into; mostly because of the unique management that luxury companies need to practice to succeed in the long term. Didn't really think of contacting the venture arms of major luxury groups/companies though. Thanks a lot!

I'm not an expert in VC, but have been a limited partner in a few funds. I've also stayed very close to some of the investments our funds have made over the years and been an adviser to a couple of funds.

Keep in mind there are a lot of different funding sources available to entrepreneurs. Angel, VC, and Institutional Money are all helpful in the cash flow chase. Whereas credit cards, debt loans - don't come with equity strings.

Most VC's will look for proven leadership, a track record of success, a VC sized revenue opportunity/market opportunity, and a clear path to hefty financial returns. Most funds have a deployment window - time to send out the money, and a lifespan of 10 years or less to get it back in higher amounts. The primary goal of most VC's is to achieve the highest returns in the shortest time period possible for themselves and their LP's. The good ones will assist you through the financing tranches and series, and clear your path to acquisition or IPO.

Access to VC's come through startup boot camps, tech stars, your local university entrepreneurial competitions, and through pure connection hustle. If you have something truly worthy of investment, you should get multiple term sheets. However it only takes one term sheet to succeed. Also, most VC's for the first round may want to syndicate the deal, meaning a few different firms will get a piece of the available equity pie. This spreads the risk out for them, and also gives your company more assistance. Have your attorney spend a few hours to review the term sheet (a few hundred dollars could save you a lot down the road)

Also keep in mind VC's invest in certain spaces that they know best (clean tech, AI, Mobile, Health Care), they can be industry and product specific. Check their sites for what they have invested in, and ensure they have a positive track record of moving the company along to IPO or positive acquisition. Do your research prior to starting to engage with them.

Best of luck in your pursuit of financing!
Thanks for putting some clarity into the whole topic! When the time comes I'll make sure to start a progress thread and fill you guys in on everything.
 

Scot

Salad Dressing Empire
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Jul 10, 2016
2,975
13,784
2,796
Florida
Just sent out 8 emails this morning to different VC firms and accelerators. Let's see if anything bites. Gust so far has been the best resource for me, as a lot of the angel firms I've found have the application process through that website.
 

Create an account or login to comment

You must be a member in order to leave a comment

Create account

Create an account on our community. It's easy!

Log in

Already have an account? Log in here.

Sponsored Offers

  • Sticky
MARKETPLACE Lex DeVille's - Advanced Freelance Udemy Courses!
Just bought 5 of your Upwork courses. Thanks for making valuable content Lex!
  • Sticky
MARKETPLACE Kill Bigger Incubator
I've just concluded my program with Kyle. The incubator gave me what I wanted. Now, working on a...
  • Sticky
MARKETPLACE Fox's Web Design Guide: Earn $100K this year (Yes, 2020!) and Go Fastlane
Thanks for the detailed response. I see it similar, in the beginning, you have only a small...
  • Sticky
MARKETPLACE Grow Your Business With a Book (An Unorthodox Marketing Strategy That Built One of the Largest...
Thanks for your offer to look at my book. Here's the link to the squeeze page Buy The Prosperous...
  • Sticky
MARKETPLACE You Are One Call Away From Living Your Dream Life - LightHouse’s Accountability Program ⚡
The day I can afford to pay 800 a month to have someone keep me accountable is the day I've won...



Forum Sponsor

sponsor

New Topics

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Monthly conference calls with doers
Ideas needing execution, more!

Join Fastlane Insiders.

Top Bottom