The Smart Startup.

The Smart Startup.

Last updated: 8/2008

The New Improved and Expanded Edition
of the Smart Startup Guide
is Finally Out

This is definitely not your father's startup manual.
210 pages!

How I Learned to Stop Waiting for Investors and Start Building Companies

Are you starting to get frustrated by the
Venture Capital Catch 22TM?

What is the venture capital catch-22? Well, startups need venture capital to start, but venture capitalists and angel investors only fund companies which already have traction (i.e., sales). This is one big reason why no one is funding you.

Part 1: The Bad News

Before Embarking on a Campaign to Raise Venture Capital Funding, You Should Look at Yourself Objectively and Honestly to Determine if You Even Qualify. Most People Don't Stop to Do This.

Since the vast majority of venture capital hunters don't qualify, you will, in most cases, end up wasting 6 to 12 months of your life writing a business plan which will never be read and doing "dog & pony" shows for audiences who are at best only mildly curious or at worst engaged in "brainsucking" you for ideas.

Who Qualifies for Venture Capital Today?

Venture capitalists, like winning horse track gamblers,
bet on the jockey not on the horse.

Industry "stars" qualify for venture capital. This means someone who has already taken a start-up from zero to 50 million in sales or better. So if you're counted amongst the stars in your industry, you stand a good chance of attracting venture capital provided your current deal has the following elements:

* at least 2 other senior executives with experience in building wildly successful companies,
* a proprietary technology in a sector currently considered hot by the venture capital industry,
* a top-notch technical team,
* a target market at least one billion dollars in size,
* a minimum of one year of rising sales to blue chip customers.

It you don't meet the above criteria venture capital funding won't happen.

If your name is not synonymous in the minds of financiers with huge, almost obscene, profits, your plan will be accepted politely but never actually read beyond the "team" section.

If you haven't made big money for investors and don't have any close relatives running venture capital firms, you should read on.

The Three Dirty Little Secrets About Raising Outside Capital

Let me share with you three secrets about raising capital which almost no one else will.

* First, chasing outside capital is by far the most unpleasant and drawn-out ordeal experienced by entrepreneurs. It always seems to take forever. (For this reason, veteran entrepreneurs try to avoid raising outside capital at all costs.)

* Second, based on the fact that your typical early stage venture capital firm invests in only one company out of every 500 business plans ...

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