15 Smart Ways to Vet a Potential Investor Before Partnering

Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

What’s one smart way to vet a potential investor before sealing the deal?

1. Talk to Other Companies They Have Invested In

Diana GoodwinBy reaching out to Founders and executives at other companies that your potential investor has invested in, you’ll be able to get a sense of how hands on they will be, what type of advice or value-add they provide (aside from cash), and overall whether or not it was a good experience. This type of information will help you decide whether that particular investor will match what you are looking for.

– Diana GoodwinAquaMobile Swim School

2. Find Out What Value They Provide Beyond Money

Andrew ThomasAsk your investor to articulate exactly what value they will provide beyond writing a check.  If they can’t confidently and clearly articulate their value, you should not move forward in working toward terms. Ask them to explain how they delivered this value to other investments and how they can do the same specifically for your startup.

– Andrew ThomasSkyBell Video Doorbell

3. See How They Handle Negative News

Sean KellyThe only way to truly know a potential investor’s character is to go through tough times with him or her. To simulate that, strategically surface negative news and gauge their reaction. How they handle it will speak volumes.

– Sean KellySnackNation

 

4. Research the Investor Online

Shawn SchulzeIt’s amazing what you can find out about a person or entity by doing some thorough searches online. Research their background, prior investments, LinkedIn, business websites, online articles, press mentions, etc. Look for any red flags and validate any statements made. With social media and the amount of content published online, you can verify and uncover a lot about most individuals or entities.

– Shawn SchulzeSeniorCare.com

5. Break Bread Together

Nick BraunAlways meet in person before taking on a new investor. I recommend dinner or drinks to allow enough time for a thoughtful conversation. Too many entrepreneurs rely solely on email, social media and conference calls, but that will only tell you part of the story and can get you burned. I know it’s old school and a bit inconvenient, but all the research in the world can’t replace a handshake.

– Nick BraunPetInsuranceQuotes.com

6. Consider a Lawyer

Elle KaplanWhat many fail to realize is that you usually aren’t your own boss after getting funding. Investors can say that they’re on board with your company’s vision and core values, but might be singing a completely different tune after you sign the papers. That’s why I’m a huge fan of bootstrapping. If you really must get funding, do the research and consider a lawyer to make sure you retain control.

– Elle KaplanLexION Capital

7. Ask for References

Jordan FliegelIt’s important to ask for references of entrepreneurs the investor has previously backed. Set up calls with the founders to get the inside scoop on their experiences with the investor. A good investor will open up their Rolodex of contacts and offer to make an email introduction. If they are not willing to do so, it is a huge red flag.

– Jordan FliegelCoachUp, Inc.

8. Back Channel References

Joseph WallaAsk a lot of questions. If you really want to do a full vet, find out who they’ve invested in and do back channel references on them. You’d be surprised, not all VCs have sterling reputations within the community. Conversely, there are a lot of less well-known VCs who are both extremely helpful and have amazing reputations. The only way to find out is by doing back channel references.

– Joseph WallaHelloSign

9. Find Out if They Want to Learn From You

Julien PhamThere should be an obvious pattern. Look at their portfolio and the relationships they’ve maintained with the people they’ve invested in. A good investor is first and foremost a people person — someone with broad knowledge or experience and a thirst to learn through you. A good investor will trade their money and experience in exchange for an opportunity to grow and learn from you.

– Julien PhamRubiconMD

10. Discover if They Have a Willingness to Participate in Follow-on Rounds

Vishal ShahUnless your startup is witnessing hockey-stick growth, expect to raise multiple ‘bridge’ and/or ‘seed’ rounds before you raise Series A. If existing investors decide not to join a follow-on round, it sends a negative signal to other investors. Dig into the investor’s past track record and measure how often they have participated and/or led subsequent bridge rounds. Stay away from the one-timers.

– Vishal ShahNoPaperForms

11. Know Whether They Can Take on a Lead Role for You

Andy KaruzaInvestors typically know and work with other investors. Should you have to raise more money, they should be willing to take the lead on helping you raise. This type of investor is very important to have early on in your company as it will dictate success in future rounds.

– Andy Karuzabrandbuddee

12. Flip the Script

Aron SusmanAsk them how they view your company, what they see your company accomplishing, and their ultimate growth goal with your company. It’s ideal to find an active investor, instead of one who plans to put in some money and leave it at that.

– Aron SusmanTheSquareFoot

 

13. Talk to a Previous Company That Had A Period of Failure

Trevor SummersThe true test of a great investor is how they react when times are tough. Do they disengage? Provide helpful guidance and introductions? Do they redouble their efforts? Every investor has had struggling investments. Find out who in their portfolio went through tough times and getthe skinny about what it’s going to be like for you when you face your most important challenges.

– Trevor SumnerLocalVox

14. Focus on Investors Who Grasp Your Business Quickly

David CiccarelliHaving raised around $5,000,000 from a variety of investors, I’ve learned that those who grasp the business quickly will be the bestinvestors. Don’t waste time explaining your business model, including your value proposition, profit model, key resources and core processes to an uninformed investor. Instead, focus your time and energy with those who intuitively appreciate the opportunity.

– David CiccarelliVoices.com

15. Share Your Vision

Shilpi SharmaDo you share your vision with the VCs you are looking to get money from? Two things you would get to know: 1) Whether the VC would be a partner in your vision and help you refine it as you progress, and 2) If there is disagreement regarding the vision of the company, how would you two sort it out? It is very important for you to be open and transparent with VCs since you are looking for a partner for next three or four years with them.

– Shilpi SharmaKvantum Inc.

11 Instances When You Should Ignore Advice From an Investor or Advisor

Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

When should you ignore advice from an investor or advisor?

1. It Isn’t True to Your Mission

Michael SpinosaIgnoring advice is never easy, but it is necessary when people blindly apply detailed actions or tasks to a situation/model you know they haven’t fully comprehended. Large scale recommendations that go against the very principles of why you embarked on this journey should be disregarded. Stay true to your mission. Keep external advice focused around common occurrences.

– Michael SpinosaUnleashed Technologies

2. The Context It’s Based on Is Outdated

Michael KleinmannSometimes investors/advisors think because they have 30 or more years of experience than you, they know how to handle situations. While many situations are the same as they used to be once you peel back the layers of the onion, many are not. Reframing the advice in the context of modern business and listening to your gut are very important.

– Michael KleinmannThe Underwear Expert, Inc.

3. They Can’t Substantiate It

Andrew ThomasIf you receive advice from an investor or advisor that just doesn’t feel right, ask them to support their position. If they can’t articulate exactly why they advocate for a certain decision or can’t substantiate their position with past experiences, then you should consider passing on the advice. When asking, politely state that you want additional insight so you can better understand.

– Andrew ThomasSkyBell Video Doorbell

4. Their Background Isn’t Aligned With What You‘re Doing

Brandon StapperI also consider the background of the investor/advisor and take their advice accordingly. Everyone wants to give you advice, and there is such a thing as bad advice. If you are taking business advice, make sure they’ve personally been there and done that.

– Brandon Stapper858 Graphics

 

5. It Doesn’t Resonate

Erica EasleySavvy leaders are good listeners, but that doesn’t mean they take all advice they are given. If advice, even from a key advisor, doesn’t resonate with you, than it isn’t the right move for your business. That said, ignoring advice from respected sources is sloppy. Reflect on what you don’t agree with, and why you are choosing a different path. That reflection will make you and your company stronger.

– Erica EasleyGumball Poodle

6. They Interfere in Day-to-Day Activities

Piyush JainInvestors and advisors are there to support long-term goals and management, not for micromanagement. As a business owner, youshould have full freedom for day-to-day operation. If investors/advisors are meddling with your daily work or tend to advise you on trivial items, you want toignore them or express your displeasure. You can listen to them, but be the final decision maker.

– Piyush JainSIMpalm

7. It’s Hard and Fast

Dan GoldenAdvice, whether paid or free, is just that — advice. It’s never a “must do.” It’s a “Hmm, maybe I should.” When it comes to not taking advice, any that comes hard and fast is usually worth turning down. “Dan, you have to change;” or “Dan, I’ve seen this a million times, you‘re doing it wrong!” I still consider the source, but most often, I won’t implement.

– Dan GoldenBe Found Online

8. It’s Short-Term

Elle KaplanAt LexION Capital, I advise a long-term approach to investing, and the same holds true for entrepreneurship. Chasing short term gains will not ensure long-term success. You should always be looking at how advice will affect you years down the road, because any gains now could be ruined out by potential damage in the future. Any advice that doesn’t follow this should be thrown out the window.

– Elle KaplanLexION Capital

9. They Are a “Check-in Advisor”

Roger BryanThe number one thing to look out for is advisors or mentors that are assigned to you via an incubator or accelerator that seem to jump in, have a bunch of ideas, and then jump out of conversations. These advisors are very easy to spot after about one or two meetings. They want you to make major critical changes but then don’t respond to emails when you have questions. Fire them fast (you can).

– Roger BryanEnfusen Digital Marketing

10. Never Ignore Advice

Mark SamuelNever ignore advice. The real question is whether or not you use that advice or act upon that advice, but you can’t do either if yousimply ignore it. If someone is offering guidance, be happy to receive it, whether or not it’s in line with your own thoughts. It allows you to look at it from another position and evaluate which direction to choose.

– Mark SamuelFitmark

11. It Ignores Customer Data

Adam RootInvestors and advisors provide invaluable expertise, but they can be wrong. If you suffer from the HIPPO complex (i.g., Highest-Paid-Person’s Opinion counts most), remember: that’s not your customer. If investors ignore customer data, ignore them. Following such advice shows your customers, employees and colleagues that you cower when things get tough.

– Adam RootSocialCentiv

15 Ways to Reach Potential Funders on Kickstarter or Indiegogo

Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

What is the best way to reach potential funders when launching a Kickstarter or Indiegogo campaign?

1. Find Influences in Your Niche

Andrew ThomasIn the beginning of the campaign, I recommend reaching out to bloggers and influencers in your niche, either directly or through an early-stage PR firm. Find people who will join your mission and share it with their community. You want to focus on your niche and avoid casting too wide a net. This was a key part of our success — raising almost $600,000 on Indiegogo for our video doorbell.

– Andrew ThomasSkyBell Video Doorbell

2. Snowball Fast with Media Support

Jonathan LongSuccessful crowdfunding campaigns all have one thing in common: They launched with a bang. When sites like Mashable and TechCrunch write a story about a crowdfunding campaign, it creates instant credibility and the campaign snowballs into a funding monster. Establish media contacts well in advance and make sure your campaign has some major press ready to help you get it out there at launch.

– Jonathan LongMarket Domination Media

3. Work With a Strong Marketing and PR Company

Ken CauleyCrowdfunding is the future, no doubt about that. But success in crowdfunding is easier said than done. As this space continues tomature, startups will need to hire a qualified company to help manage the marketing and PR element of successfully raising capital.

Ken CauleyAdvanced Media

 

4. Start Early

Wei-Shin Lai, M.DWe funded in less than two hours, and it was because we did a lot of promotional activities before the campaign launched. We sent press releases to the local media, which put us on air and in the papers. We let our social media fans know, and we sent out emails to tell previous customers the exact hour of the launch. I exported my contacts from Gmail and sent most of them emails using the BCC field.

– Wei-Shin Lai, M.D.AcousticSheep LLC

 

5. Create a Video

Stanley MeytinCreate more content to encourage people to invest in your project. Consider creating videos like behind-the-scenes, inside the technology, or even a simple video that will update funders on the campaign progress. You want to create content that will make people excited about the product or service, leading them to share within their communities.

– Stanley MeytinTrue Film Production

6. Connect With Bloggers Who Reach Your Audience

Andy KaruzaGo after the major PR channels, but don’t count out the smaller, tier-two bloggers who still have a considerable following. It’s pretty easy to identify the audience they cater to based on their profile and the types of articles they write about. Many of them who would be happy to review and share your product with their followers without requiring a large budget to do it.

– Andy Karuzabrandbuddee

7. Launch An Event

RahulAn event already has a captive audience, press, influencers, bloggers and the potential for your product to go viral. The Pebble Watch, for instance, launched at SXSW. It surely helped Pebble get the word out there. They went on to have the most successful (potentially second highest grossing campaign) Kickstarter launch. You can even run an event-specific promotion for your campaign.

– Rahul VarshneyaArkenea LLC

8. Find Social Media Influencers

Marcela DeVivoUnless you are a social media rockstar already, leveraging your social circles won’t yield much visibility. An ideal way to gain massive exposure is to reach out to existing influencers on Youtube, Instagram and other channels and tell them about your campaign. Additionally, write for sites like Buzzfeed, Medium.com and Linkedin Voices to get instant visibility.

– Marcela DeVivoHomeselfe

9. Give Back

Miles JenningsAs an incentive for funders to put money into your Kickstarter campaign, give them something back for their donation and contribution toward your idea. You could give them anything from a branded T-shirt to a coupon to your products and/or services. You could even make them a part of your company in some way. This will push funders to get involved and even stay involved in the future.

– Miles JenningsRecruiter.com

10. Get Feedback

Andrew SchrageElicit feedback from potential donors and use this to improve your pitch and overall campaign. Folks will be more willing to invest when they’re engaged and involved.

– Andrew SchrageMoney Crashers Personal Finance

 

11. Spend to Get Started

Blair ThomasAlthough you‘re already looking for funding to help launch your business, spend some of that all important starting capital on hiring contractors to make your campaign a worthwhile endeavor. A well-designed, well-written page, with focused content and clear messaging, can go a long way — and it’s going to take a team of (part-time) professionals to ensure a win!

– Blair ThomasEMerchantBroker

 

12. Learn from Others

Clayton DeanCrowdfunding is a challenge and there’s no exact science to it, but you can start on the right foot by researching what other successful Kickstarter or Indigegogo campaigners have done to generate visibility. Better yet, find and connect with them on Twitter or Facebook and ask them. From my experience, most are more than happy to share their strategies and fundraising secrets.

– Clayton DeanCirca Interactive

13. Facebook Ads

Andrew TorbaFacebook advertising is something you should consider experimenting with for crowdfunding campaigns. Set up a few small budget experiments to test out different target markets and see how well they convert. Start small and scale as you learn what works best. Facebook’s video ads are also great for creating awareness and driving traffic back to your campaign page itself.

– Andrew TorbaAutomate Ads

14. Build an Email List in Advance

Mattan GriffelBefore running a Kickstarter or Indiegogo campaign, it’s very important to build a potential audience to promote your launch to; ,otherwise. you‘re starting at zero. One of the best ways to do this is to set up a blog-style site using Weebly, Squarespace or WordPress, and start writing regularly. You should shoot to get to at least 1000 emails before launching any sort of crowdfunding campaign.

– Mattan GriffelOne Month

15. Ask Mom and Dad to “Kick Start” Your Campaign

Obinna EkezieSuccessful Kickstarter campaigns generate social proof by getting backers right out of the gate. The most tried and true way to get early backers is to start with first level connections. Family (mom and dad), friends, co-workers, whatever it takes. Kickstarter investors invest in companies with traction. Don’t launch a Kickstarter campaign without having early friends and family backers.

– Obinna EkezieWakanow.com

12 Things You Should Do After a Promising Meeting With a Potential Investor

Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

What’s one thing I should do AFTER a promising meeting with a potential investor?

1. Check In

Alec BowersShow initiative after the meeting and proactively address your follow-up points (at the end of the meeting you should have set some items to follow up with). Don’t wait longer than 8 to 12 hours. Investors want to see your initiative, your attention to detail and how good you are at executing follow up. Many a startup has lost investors due to poor/incomplete follow up.

– Alec BowersAbraxas Biosystems

2. Act on Their Feedback

Jason LaIt’s essential to be a prudent entrepreneur and address potential investors’ feedback before scheduling another meeting with them. Investors believe in the adage “actions speak louder than words,” so demonstrate that you have taken action to address their concerns. Some entrepreneurs are so enthusiastic about their venture that they ignore valuable feedback and continue to solicit financing.

– Jason Thanh La, Merchant Service Group, LLC & K5 Ventures

3. Ask Questions

Bhavin ParikhA common mistake that founders make is coming across as too desperate. You want to show investors that they need to prove themselves to you as well — you are a scarce resource. In your follow up, you‘ll want to thank them for their time, but you also want to ask them to sell themselves to you with questions like, “Can you give me an intro to a founder you‘ve invested in?” You need to play the game!

– Bhavin ParikhMagoosh Inc

4. Keep Them Updated

Sohin ShahEven if a meeting goes well, it doesn’t guarantee closing. The best way to work towards converting interest into commitment is by keeping the investor in the loop on progress and new initiatives. This helps build their confidence in you, in your product/company and allows them to feel like a part of the team.

– Sohin ShahIFunding

5. Improve Your Fundraising Deck

Aaron SchwartzAfter you thank the investor, suggest next steps and take three minutes to celebrate, you must re-focus on your fundraise. Take all of the feedback from the meeting and use it to improve your deck. First, reflect on which insights impressed the investor, and emphasize them in the future. And just as importantly, take the questions they had and make sure you‘re better prepared for the next meeting.

– Aaron SchwartzModify Watches

6. Re-engage With Them

Blair ThomasIt’s important to keep your deck up to date and find constructive and effective ways to re-engage with your potential investor. Keep communication high by providing news of new milestones, new opportunities and goals won, and by creating a general feedback loop. This can go a longway in keeping your investor interested. Show them you‘re a highly proactive owner.

– Blair ThomasEMerchantBroker

7. Track Everything

john ramptonRight after a promising meeting (or sometimes before) you‘re going to be sending them a pitch deck. Make sure you‘re tracking everything. I personally use PandaDoc for this. It will show you what pages they are looking at, not looking at and how long they are looking at each page. Next, follow up with them accordingly.

– John RamptonDue

8. Send a Memorable Gift

Drew GurleyYou have a small time frame to make a big impression. A great way to follow up is to use a memorable and unique gift. I actually learned this in a boot camp a couple years ago from a corporate gifting guru. A thoughtful gift doesn’t need to be expensive; it needs to show you paid attention and care about the relationship. Send it quickly and stay top of mind.

– Drew GurleyRedbird Advisors

9. Do What You Say You Are Going to Do

Shawn SchulzeSo many investor meetings are full of discussion, ideas and intentions. If you propose all of the things you are working on and thatyou intend to do, then show the investor that you are doing them. Talk is just talk. Follow up with the investor to give them a concise list of progress being made. Show them you are progressing and committed to doing what you say you are going to do.

– Shawn SchulzeSeniorCare.com

10. Say Thank You

Nicole MunozThanking someone for their time and consideration shows that you are thoughtful and appreciative. Be sure to mention that you truly appreciate their attention. Try to slip in any loose ends you feel weren’t addressed. Let them know you‘ll follow up in a few days/weeks to touch base again in case they have any more questions. Lay the groundwork to ask for referrals at the next meeting.

– Nicole MunozStart Ranking Now

11. Send Favorable Market Research

David CiccarelliInvestors want to know that others have quantified the size of the market opportunity. It’s one thing for you to give your assessment, but it’s much stronger for the investor to learn about the industry and current trends in a third-party report. If you don’t have access to the full PDF report, consider linking to an article on eMarketer, Forrester, or Gartner in your follow up note.

– David CiccarelliVoices.com

12. Call Another Potential Investor

Justin BoggsDon’t stop until that money hits the bank account. So, calling the next investor increases your odds of getting a check, plus you will carry that positive energy into the call. Additionally, telling the next investor how good the previous investor meeting went puts the pressure on them to get in the game.

– Justin BoggsZeeBerry.com

Learn more about Monthly Investor Updates:

Watch the interview with Justin Miller and learn how his monthly updates helped land his startup with $10 million in funding: http://vergehq.com/2015/08/24/how-monthly-investor-updates-scored-10-million/

13 of the Smartest Questions Investors Ask Entrepreneurs

Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

What is the smartest question an investor has ever asked you?

1. What’s the Biggest Threat to Your Success?

Andrew ThomasThis question forces you to demonstrate your ability to realistically evaluate your market potential and the maturity to acknowledge that threats exists. The investor is also testing your composure — as this question can cause defensiveness. If asked, take a deep breath and be honest about your threats and how you will address them. This builds confidence and trust instead of a red flag.

– Andrew ThomasSkyBell Video Doorbell

2. What Happens if You Get Hit by a Bus?

John RoodOf course the founder is critical to the enterprise, but especially for small businesses, I’ve found that smart investors want to make sure you have a clear pathway to generating enterprise value that isn’t just you personally working 80 hours for the rest of your life. Luckily, this can help you prioritize delegation, which you should be thinking about anyway.

– John RoodNext Step Test Preparation

3. Why Is This Opportunity Any Different Than Going to Vegas and Throwing It All on Red?

Jonathan LongI’m currently consulting for a new app and they have one investor who is funding the entire program. He jokingly asked me, “Why is this opportunity any different than going to Vegas and throwing it all on red?” While it was more of a joke, it was a legitimate question. You need to be able to sell and defend your concept. If you can’t, why should an investor feel comfortable writing a check?

– Jonathan LongMarket Domination Media

4. What Happens if Facebook Goes Out of Business?

Piyush JainWe were starting out an app idea completely based on Facebook. Investors asked what happens if they go out of business. We went blank. We ended up reshaping the model, though, so it would not be fully dependent on Facebook, and it ended up being a better app. Sometimes we tend to over-rely on big systems which can be more susceptible to failures than we are.

– Piyush JainSIMpalm

5. Why You?

Blair ThomasHaving to answer that very simple question can often stymie even the best stakeholders. Are you different? What do you have to offer that your competitors do not? Why am I investing in you when there are 12 other companies competing for my dollar? It can be a difficult question to answer, and one that you should have an answer for. Be prepared to argue your case as a differentiator.

– Blair ThomasEMerchantBroker

6. Why Now?

Charlie GrahamGreat market timing — more than even team or idea — has traditionally been the best predictor of a company‘s success. Chances are someone else has tried an idea similar to the one you are pitching. What fundamental change has occurred in the market that makes right now (versus 3-6 months ago) the best time to start this company?

– Charlie GrahamShop It To Me, Inc.

7. How Can I Help?

Zoe BarryThis question is a litmus test. Keep in mind not all money is equal shades of green. I’ve found the best investors want to know what my challenges are and where they can add value. Once an investor puts money into your company, their role is to help the management team build a great business. If an investor doesn’t ask you how they can help, don’t take their money.

– Zoe BarryZappRx

8. Why Can’t You Just Bootstrap This Business?

Ross ResnickUntil an investor asked me this question, I was convinced that outside investment was the only way to start a company. Answering his question forced me to analyze my initial product development road map and reimagine it to be immediately cash flow positive and self-sufficiently scalable. This fundamental shift enabled rapid, responsible growth.

– Ross ResnickRoaming Hunger

9. Who Is This For?

Vik PatelWe often develop business ideas by looking at successful models and applying them to a different domain — the Uber-for-X approach. It’s easy to miss the most important point: Who is this for? Being asked that forced me to think concretely about the people for whom I would be solving a problem and make the appropriate changes to the execution of business ideas.

– Vik PatelFuture Hosting

10. What Excites You?

Ty MorseAn investor asked me this to find out what motivated me, and I think that’s what investors need to know. Are you going to pursue this idea until it succeeds? Do you have the drive, the energy, the passion to make this work? This question gets to the core of who you are and lets investors learn a little about who they’re investing in.

– Ty MorseSongwhale

11. How Long Do You Think the Money Will Last?

Vishal ShahThis question forces you to demonstrate your understanding of the revenue streams, cost structure, cash burn and runway. VCs want to know how you plan to spend the money and if what your ask is realistic enough to get you to your next milestone. If you seek to raise too little or expect an unrealistic runway, it indicates that you haven’t thought through how you will scale your business well enough.

– Vishal ShahNoPaperForms

12. Does Your Business Align With Your Experience?

Erik SeveringhausLon Chow asked me why my experience didn’t match the market I was entering, as I left a successful career at IBM to start a B2Ccompany. There’s a lot written about product-market fit, but not enough on founder-market fit. Does the founder truly understand nuances of the industry? What makes it tick? Lon zeroed in on the misalignment in our first meeting and I realized just how right he was.

– Erik SeveringhausSimple Relevance

13. Why Are Other Investors Passing?

Fan BiDon’t take it as a passive-aggressive question and get defensive. You should have a good answer. The best answer you can hope to provide is that they didn’t believe in the market or where it’s going. Different investors have different theses on macro trends and will understand other investors not believing in yours.

– Fan BiBlank Label

11 Tips for Starting a Conversation With a Potential Investor

Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

I landed a short meeting with a potential investor thanks to a warm introduction. Where do I start the conversation?

1. Get to Know Them

Diana GoodwinBefore diving into the details of your business, start with some lighter conversation topics, perhaps by bringing up the person who made the introduction. And let the conversation naturally flow to business talk. The meeting shouldn’t just be about money — it’s important to make sure you get along on a personal level as well.

– Diana GoodwinAquaMobile Swim School

2. Be Clear and Concise

Zachary BurkesLook, we’re all incredibly busy — imagine having people pulling you in every direction to invest in their next great idea. It has to be exhausting. One way to separate yourself from the pack is to be clear, concise and effective in how you communicate your company and product. If you can’t explain your company in 30 seconds, it’s either too complex or you don’t understand it well enough.

– Zachary BurkesGatekeeper Innovation Inc.

3. Start With Background

Mark CenicolaThe first step is getting to know each other. Find out as much about the investor’s background as possible and provide them with your background. Keep in mind that an investment doesn’t happen in a single meeting. Finding common ground can create mutual trust, create a basis for an ongoing relationship and ultimately lead to an investment.

– Mark CenicolaBannerView.com

4. Sell Your Method, Not Your Product

Murray NewlandsTell the investor how big the market is and how much money they are going to make from investing in your company that is inevitably going to succeed. Far to many founders start with demonstrating the product and talking about functionality without selling the problem and the business case first. If there is no problem or business case, it doesn’t matter how great your product is.

– Murray NewlandsDue.com

5. Ask Questions to Build Trust

Joseph WallaYou’re either raising or you’re not raising. And unless you’re having five investor meetings a day for weeks on end, you’re probably not raising. In this case you should use the meeting as an opportunity to build the relationship without indicating that you want money. Ask the investorsquestions to qualify them. Building trust in a genuine way is priceless, so take advantage of the not-raising mindset.

– Joseph WallaHelloSign

6. Discuss the Person Who Made the Introduction

Jason LaYou should start the conversation by talking about how you know the person who made the introduction, including why the person thought you and the investor should meet. You want to demonstrate that you’ve done your homework by displaying knowledge of the investor’s past projects. The next step is to present your pitch. Investors are busy, so don’t waste time.

Jason LaMerchant Service Group, LLC

7. Find Out What Caught Their Eye

David CiccarelliInvestors hear about thousands of ideas each year and sit through hundreds of pitches; they’ve seen it all. The fact that you’ve landed an in-person meeting means that you are doing something new or have a unique approach. Find out what that is. I’d open the meeting with, “Before we get started, can I ask what specifically caught your eye?” That becomes your hook for future meetings.

– David CiccarelliVoices.com

8. Ask Questions About Past Investments

Jayna CookeIt is so important to understand what the potential investor is looking to invest in. Ask them questions about their past investments that have done really well. Find a way to compare yourself and your ideas with them. Take this as a launching point and have your deck ready with information that you know they will want to talk about.

– Jayna CookeEVENTup

9. Build Rapport

Joshua LeeStart by building rapport. They’re already warm to you so let them get to know who you are and what you’re about outside of your company. Investors want to know your character and a big part of that is what you stand for outside the business arena. They’re looking to reduce risk. Knowing the reason you’ll fight so hard for your business and your big “why” signals to them how serious you are.

– Joshua LeeStandOut Authority

10. Find Common Ground

Christopher KellyFind some common ground and keep the conversation lighthearted before diving into business. After you have established a personal connection, the investor is more apt to help you. This help could come in the form of honest feedback, connections, added time or maybe even funding.

– Christopher KellyConvene

11. Be Prepared

Alfredo AtanacioBecause investors have limited time, you need to be prepared with a pitch that explains your business or idea in 30 seconds. You need to show the value you will deliver to the market and how the investor will get his money back. Remember that the meeting is not about you; it’s about the investor and what can you offer them.

– Alfredo AtanacioUassist.ME

8 Universal Qualities of Great Pitch Decks

“Send me your deck.”

Early entrepreneurs hear this a lot. And it’s because a pitch deck is a great way for an investor or potential customer to quickly size up your company. 

So, don’t leave this important communications piece to chance. We interviewed eight experienced entrepreneurs to get their perspective on the important aspects of an effective pitch deck.

Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

What’s one lesser known thing you can include in a pitch deck that will really wow a VC?

1. Revenue

Danny BoiceWe very deliberately set out to have a solid revenue story for investors from day one. I know this sounds like common sense, but it’s unfortunately quite rare. I can’t believe how many investors we’ve pitched to who couldn’t believe that we had revenue our first month in business.

– Danny BoiceTrustify

2. A Personal Connection

Kristopher JonesDo research on the personal background of the person(s) you are sharing a deck with, and find one or more things in common to create a lasting personal connection. Maybe you went to the same college or high school. Maybe you are both Philadelphia Eagles fans (that would make three of us) or both attended Burning Man. A genuine personal connection can impress a VC and set the tone for discussion.

– Kristopher JonesLSEO.com

3. Synergies With Their Current Investments

Daniele GallardoI found that it is really important to understand the portfolio of your VC or strategic partner. Browsing the companies that they funded in the past gives you an understanding of what is important to them. If the companies are in the realm of what you do, it is often very simple to find synergies that the VC would really love to see in your deck. Do the homework for them, and show them!

– Daniele Gallardo, Actasys

4. Lessons Learned

jared-brownTelling VCs that you’ve made mistakes and sharing what you’ve learned from them will definitely make you stand out from the other startups that might be pretending to be perfect. You’ll show them that you’re adaptable, resilient and perceptive — all qualities they’re looking for in a potential investment. Then show how the lessons added to the value of your product or expanded your market reach.

– Jared BrownHubstaff

5. People Who Believe in You and How to Contact Them

dave-nevogtIf you already have influencers and advisors on board, show VCs who the three or four most important ones are and how to best get in contact with them. Having established entrepreneurs and businesspeople who will sing your praises to potential investors is an important signal of credibility, and in some cases, it can sway a VC that’s potentially interested but still needs some reassurance.

– Dave NevogtHubstaff.com

6. Video

Miles JenningsVideo and imagery are what attracts attention most from any audience you are trying to speak to, even an audience of VCs. Include a short video in your pitch that shows who you really are as a company, what you have accomplished and what your goals are. The video will make your story more tangible and will give a VC an inside look at your company and what you have to offer.

– Miles JenningsRecruiter.com

7. Thorough Financials

Jason LaAs an active investor in early stage companies, I review pitch decks every week, and I would be impressed by a thorough discussion of key metrics beyond mere sales projections. This should include compound annual growth rate, customer acquisition cost and return on equity as well as a timeline of the cost to achieve specific milestones. Thorough financials demonstrate solid business acumen.

– Jason La, Merchant Service Group, LLC

8. Future Vision of the Industry

Mike SeimanInclude the vision of the future of your industry. Too many people get caught up in the numbers and forget to tell a story. VCs want to know the bigger picture – where your company and your industry is going. In the end, marketing and finance decks aren’t that different. Both tell VCs a story and focus on getting them to invest in that vision.

– Mike SeimanCPXi

16 Things Recent Grads Who Want to Work at Startups Should Know

Tons of fresh grads want to live the startup life, but what should you know before you jump into your first post-grad startup? 16 entrepreneurs offer their best tips.

What’s one piece of advice you’d give recent grads hoping to work for a startup?

Rebecca Zorowitz1. Be Nimble and Ready to Work Hard

At a startup, you will be required to wear many hats and to make order out of chaos. Startups typically don’t have a concrete infrastructure already in place. Working for a startup is not for people who need a distinctive job description. It is for people who are nimble, ready to roll with the punches and ready to work their hearts out. Every day will be different, and that is part of the thrill.
Rebecca Zorowitz, Ooh La La Brands

 

Travis Steffen2. Don’t Scour Job Boards

If I were a recent grad, I’d think about the organization I’d kill to be a part of. I’d then make it my life’s mission to get a meeting with an executive at that company to let them know that I’m the perfect person to work for them — even if a position doesn’t exist — and I’d work for free until a position opened up. This shows a passion that most employers never see. I’d hire you on the spot.
Travis Steffen, Cyber Superpowers

 

jeff epstein3. Be Useful and Overdeliver

You’ll have the opportunity to wear many hats. Make an impact and learn as much as you can — embrace it! Earn a reputation for being a tireless worker and exceed their expectations.
Jeff Epstein, Ambassador

 

 

Ashley Mady4. Seize Opportunities

Be prepared to do anything and everything! The more you do, the more valuable you’ll become. Ease the life of everyone around you, seize every opportunity and always do more than you are asked.
Ashley Mady, Brandberry

 

 

Doug Bend5. Show Your Startup Passion

Startups want to hire someone who loves the product and is a great fit for their team and culture. Do your homework on the startup and the founders before your interview, and discuss why you would be great fit and why you believe in their product. Most importantly, you’ll likely be working longer hours for a smaller salary, so be honest with yourself about whether that belief is genuine.
Doug Bend, Bend Law Group, PC

 

brewster6. Immerse Yourself

It’s quite easy these days to expose yourself to entrepreneurship as a student. With resources like Startup Weekend, Hackathons and online courses, you can fully immerse yourself in startup culture, thinking and product development before working at one. As a hiring manager, I look for recent grads who’ve demonstrated interest and understanding by immersing themselves in entrepreneurship.
Brewster Stanislaw, Inside Social

 

John Rood7. Learn Technical Skills

Even if you plan to work in marketing or business development, you’ll be taken more seriously and will have more opportunities if you understand basic coding. There are lots of opportunities to learn, either for free or for a small investment. If you aren’t willing/able to commit to learning hard skills, the startup life might not be for you.
John Rood, Next Step Test Preparation

 

Caitlin McCabe8. Don’t Be Afraid to Jump Around

Startup cultures can range from corporate to frat house, so don’t be afraid to look into another startup if the culture isn’t a fit. Teams at startups tend to spend a lot of time together so it’s important that the organization structure is a fit.
Caitlin McCabe, Real Bullets Branding

 

Tracy Foster9. Concentrate on Your Cover Letter

Make sure you have a strong cover letter. Resumes are great, but a strong cover letter does so much more to communicate who you are, what your level of interest is in the startup and why you’d be a great fit for the team. Be sure to have someone you trust proofread for you.
Tracy Foster, ONA

 

Maren Hogan10. Get Social

Startups are all over social; it’s one of their biggest marketing tools. Follow and connect with them on every social platform they have. This gets your name, face and personality in front of them before you apply.
Maren Hogan, Red Branch Media

 

 

Santiago Halty11. Embrace Diversification

In a startup, you do not have the luxury of specializing in one specific task. For example, if you are doing sales you may end up doing sales, marketing, outreach and social media. Embrace this diversification as it provides a wealth of opportunities for experience that would not be possible in a well-established company.
Santiago Halty, Senda Athletics

 

Erica Bell12. Follow Your Passion

Working for a startup takes a tremendous amount of drive and endurance — you’ll need passion to survive! Working alongside a team of people dedicated to a shared passion is extremely rewarding, so do your research and apply for jobs at companies that really excite you. Excitement is crucial to your success!
Erica Bell, Hukkster

13. Give First

Oisin HanrahanYou may not find their job postings listed on the typical career sites, so you’ll need to get creative and contribute to the community first. Do your research. Discover the startups that interest you and what you can do to help them.
Oisin Hanrahan, Handybook

 

 

Kim Kaupe14. Be Prepared to be Thrifty

One piece of advice I would give to college grads is be ready to take a pay cut compared to your friends headed off into the corporate grind. Startups are usually tight on cash and offer other incentives like flexible hours, profit-sharing, or remote working abilities. Be ready to get thrifty during your first year out of college. You can still “live the dream,” just on a startup budget!
Kim Kaupe, ZinePak

 

doreen-bloch15. Pretend You’re the CEO

Startups are often lean on people, funds and resources, so if you’re working for a startup, chances are you’ll wear many hats. In order for the startup to thrive, everyone needs to be dedicated. If you’re as strong an advocate for the company as the CEO is, if you’re selling as hard as the CEO and if you know the business just as well as the CEO, you’ll see a reward when the startup takes off.
Doreen Bloch, Poshly Inc.

 

Gerard Murphy16. Live at Home

I understand you don’t want to move into your parents’ basement, but having a free or low cost place to rest, a home-cooked meal and the support of family can be a godsend. Working at a startup is wonderful, but the salaries will be less than your friends will make. You won’t be able to afford to work at a startup if you also live in an expensive apartment. Save the money, live with mom.
Gerard Murphy, Mosaic Storage Systems, Inc.

16 Things Recent Grads Who Want to Work at Startups Should Know

Tons of fresh grads want to live the startup life, but what should you know before you jump into your first post-grad startup? 16 entrepreneurs offer their best tips.

What’s one piece of advice you’d give recent grads hoping to work for a startup?

Rebecca Zorowitz1. Be Nimble and Ready to Work Hard

At a startup, you will be required to wear many hats and to make order out of chaos. Startups typically don’t have a concrete infrastructure already in place. Working for a startup is not for people who need a distinctive job description. It is for people who are nimble, ready to roll with the punches and ready to work their hearts out. Every day will be different, and that is part of the thrill.
Rebecca Zorowitz, Ooh La La Brands

 

Travis Steffen2. Don’t Scour Job Boards

If I were a recent grad, I’d think about the organization I’d kill to be a part of. I’d then make it my life’s mission to get a meeting with an executive at that company to let them know that I’m the perfect person to work for them — even if a position doesn’t exist — and I’d work for free until a position opened up. This shows a passion that most employers never see. I’d hire you on the spot.
Travis Steffen, Cyber Superpowers

 

jeff epstein3. Be Useful and Overdeliver

You’ll have the opportunity to wear many hats. Make an impact and learn as much as you can — embrace it! Earn a reputation for being a tireless worker and exceed their expectations.
Jeff Epstein, Ambassador

 

 

Ashley Mady4. Seize Opportunities

Be prepared to do anything and everything! The more you do, the more valuable you’ll become. Ease the life of everyone around you, seize every opportunity and always do more than you are asked.
Ashley Mady, Brandberry

 

 

Doug Bend5. Show Your Startup Passion

Startups want to hire someone who loves the product and is a great fit for their team and culture. Do your homework on the startup and the founders before your interview, and discuss why you would be great fit and why you believe in their product. Most importantly, you’ll likely be working longer hours for a smaller salary, so be honest with yourself about whether that belief is genuine.
Doug Bend, Bend Law Group, PC

 

brewster6. Immerse Yourself

It’s quite easy these days to expose yourself to entrepreneurship as a student. With resources like Startup Weekend, Hackathons and online courses, you can fully immerse yourself in startup culture, thinking and product development before working at one. As a hiring manager, I look for recent grads who’ve demonstrated interest and understanding by immersing themselves in entrepreneurship.
Brewster Stanislaw, Inside Social

 

John Rood7. Learn Technical Skills

Even if you plan to work in marketing or business development, you’ll be taken more seriously and will have more opportunities if you understand basic coding. There are lots of opportunities to learn, either for free or for a small investment. If you aren’t willing/able to commit to learning hard skills, the startup life might not be for you.
John Rood, Next Step Test Preparation

 

Caitlin McCabe8. Don’t Be Afraid to Jump Around

Startup cultures can range from corporate to frat house, so don’t be afraid to look into another startup if the culture isn’t a fit. Teams at startups tend to spend a lot of time together so it’s important that the organization structure is a fit.
Caitlin McCabe, Real Bullets Branding

 

Tracy Foster9. Concentrate on Your Cover Letter

Make sure you have a strong cover letter. Resumes are great, but a strong cover letter does so much more to communicate who you are, what your level of interest is in the startup and why you’d be a great fit for the team. Be sure to have someone you trust proofread for you.
Tracy Foster, ONA

 

Maren Hogan10. Get Social

Startups are all over social; it’s one of their biggest marketing tools. Follow and connect with them on every social platform they have. This gets your name, face and personality in front of them before you apply.
Maren Hogan, Red Branch Media

 

 

Santiago Halty11. Embrace Diversification

In a startup, you do not have the luxury of specializing in one specific task. For example, if you are doing sales you may end up doing sales, marketing, outreach and social media. Embrace this diversification as it provides a wealth of opportunities for experience that would not be possible in a well-established company.
Santiago Halty, Senda Athletics

 

Erica Bell12. Follow Your Passion

Working for a startup takes a tremendous amount of drive and endurance — you’ll need passion to survive! Working alongside a team of people dedicated to a shared passion is extremely rewarding, so do your research and apply for jobs at companies that really excite you. Excitement is crucial to your success!
Erica Bell, Hukkster

13. Give First

Oisin HanrahanYou may not find their job postings listed on the typical career sites, so you’ll need to get creative and contribute to the community first. Do your research. Discover the startups that interest you and what you can do to help them.
Oisin Hanrahan, Handybook

 

 

Kim Kaupe14. Be Prepared to be Thrifty

One piece of advice I would give to college grads is be ready to take a pay cut compared to your friends headed off into the corporate grind. Startups are usually tight on cash and offer other incentives like flexible hours, profit-sharing, or remote working abilities. Be ready to get thrifty during your first year out of college. You can still “live the dream,” just on a startup budget!
Kim Kaupe, ZinePak

 

doreen-bloch15. Pretend You’re the CEO

Startups are often lean on people, funds and resources, so if you’re working for a startup, chances are you’ll wear many hats. In order for the startup to thrive, everyone needs to be dedicated. If you’re as strong an advocate for the company as the CEO is, if you’re selling as hard as the CEO and if you know the business just as well as the CEO, you’ll see a reward when the startup takes off.
Doreen Bloch, Poshly Inc.

 

Gerard Murphy16. Live at Home

I understand you don’t want to move into your parents’ basement, but having a free or low cost place to rest, a home-cooked meal and the support of family can be a godsend. Working at a startup is wonderful, but the salaries will be less than your friends will make. You won’t be able to afford to work at a startup if you also live in an expensive apartment. Save the money, live with mom.
Gerard Murphy, Mosaic Storage Systems, Inc.

The Top Qualities to Look for in Your Very First Hire

Your company is up and running – or at least crawling – and now you get to hire your first employee. You’ve probably worked with a lot of people, maybe you’ve even hired a few, but this is a whole new ball game. This person is patient zero of your startup. You need to make sure you get it right! So what should your startup look for in a great hire?

What is the no. 1 quality I should look for in my very first hire and why?

Kelly Azevedo1. Amazing Communication Skills

No matter your industry or the position for your very first hire, you absolutely need someone who can communicate well. When instructions are unclear or incomplete, you’ll want an employee who asks for clarification. If there’s an error or you haven’t accounted for something in the business, you need a team member who speaks up with confidence. And if this hire is customer facing in any way, respectful communication is critical.

– Kelly AzevedoShe’s Got Systems

Phil Chen

2. Work Ethic
Your first hire sets the tone for future hires, so it’s important to find someone with a great work ethic. Having such a quality ensures you can depend on this person and he or she will not need constant encouragement to complete tasks and duties. Small organizations don’t allow to much time for continual guidance, so having an employee who works hard and pushes through is key.

– Phil ChenSystems Watch

Oisin Hanrahan

3. Smarts (That Exceed Your Own)

We have the motto at Handybook: “Recruit smarter than you.”  We believe in hiring the best and the brightest and we admit what we don’t know all. That’s crucial for both the first hire and every hire after that.

Oisin HanrahanHandybook

Mike McGee

4. A Growth Mindset

The No. 1 quality I look for when hiring is someone with a growth mindset. A person with a growth mindset understands that learning never stops. They can always get better at their craft and improve in other areas. A person with a fixed mindset believes that they’ve learned everything they need to and is not open to change. This can not only hamper the quality of their work, but can cause team dynamic issues in the long term.

– Mike McGeeThe Starter League

5. Coachable Foresight

Joshua Lee
The No. 1 quality I look for is ‘coachable foresight,’ whether I’m hiring an employee or contractor. I want them to be able to see where they’re going. I will share with them where the company’s going. Then, if they have foresight, they’ll see in their mind’s eye how they fit in. They’ll have an idea what steps they need to take and be coachable enough to achieve the outcome they want.

– Joshua LeeStandOut Authority

Kim Kaupe
6. Humility

Your first hire should be humble and willing to learn along side of you. At a startup where dynamics and work is changing day to day, it is important to have someone who is humble enough to say, “I don’t know the answer but I will spend the next two hours figuring it out.” Having a know-it-all or someone who is bullheaded will cause your growing company to miss out on opportunities to engage in faster, stronger and bigger developments.

– Kim KaupeZinePak

Kevin Xu7. Consistency

One of the most important characteristics for me is consistency. It is important to evaluate a person’s working ethic based on how much he respects and is serious about a job opportunity. Choosing between ability and faith, I will first look into faith and how you can retain the person by giving him faith in you.

– Kevin XuMebo international

john rampton8. A Complementary Skill Set

hire someone just like you because you get along perfectly. Hire someone who is different than you. If you’re an introvert, you will need an extrovert. If you’re a marketing guy, hire a programmer. Hire someone with different skills.

– John RamptonAdogy

Manpreet Singh9. Complete the Puzzle

First, picture the qualities most important to  your business. Then, look for each of those qualities in yourself. If you’re being honest, you won’t find all of them. The missing ones are the qualities you should look for in your first hire. In fact, that same principle can be applied to every other hire after that. The hiring process is like completing the puzzle you envision. Fill openings with what’s missing.

– Manpreet SinghSeva Call

Phil Dumontet

10. Hunger

People can learn your business, but a genuine drive to achieve great things comes from within.

– Phil DumontetDASHED

 

Jeff Mcgregor
11. Experience

My co-founder and I burned a lot of valuable time trying to learn the ropes on our own. Once we started hiring more experienced talent, we realized that we were spending less time shooting in the dark, and more time building a stronger healthier business. If there’s one thing that allows me to sleep better at night, it’s knowing I’ve hired the right people to run their respective divisions within the company.

– Jeff McGregorDash

Andrew Thomas12. Passion

For your first hire, consider hiring someone who has similar levels of passion. This is not just limited to the product or industry. This person should share your same passion for working hard, creating something amazing and delivering the very best experience or benefits to customers. They should share a passion for the process, not just the destination.

– Andrew ThomasSkyBell Technologies, Inc.

David Ehrenberg13. Sales Skills

Look for a rainmaker who can sell your company’s vision when you’re looking to build traction and start generating users. Technical skills will always be available, but sales and relationship-building skills are much tougher to find.

– David EhrenbergEarly Growth Financial Services

Andrew Schrage14. Flexibility

Things often change at a moment’s notice in today’s business world. Plus, the very first hire will probably be asked to complete many different responsibilities and tasks, some of which they might not possess much knowledge about. In order to be productive, workers must be able to adapt to change rapidly and think quickly on their feet.

– Andrew SchrageMoney Crashers Personal Finance