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Tag: Fundraising

  • How To Grow Your Startup With Rapid Experimentation | Entrepreneur

    How To Grow Your Startup With Rapid Experimentation | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Many concepts get pounded into us from well before we’re entrepreneur cubs. One example is: “Money doesn’t grow on trees, so be careful with it.”

    Later in life, we learn about the wonders of leverage. In business school or elsewhere, we’re introduced to the seductive benefits of bringing on lenders and private equity partners to accelerate our dreams.

    If we need to be careful with our own money, we learn that we better be doubly careful with others’ money. We’re continuously answerable to them, and they can sink our business.

    When building Warrior Trading, I instead chose the self-funded route. I had been subject to anxiety attacks since I was young, and the last thing I needed was to skyrocket my anxiety by worrying about investors.

    There are two sides to having investors: their money does offer the potential to grow faster. But it also creates drag. Startups funded by investors can find it difficult to pivot and change course when needed. To me, self-funding has equaled freedom. Working within the constraints of my limited funds gave way to resourcefulness, creativity and innovation.

    Related: How Entrepreneurial Creativity Leads to Innovation

    Creating a culture of rapid experimentation

    In my startup, I created an engine of rapid experimentation to find products that matched demand in the active trading community. I had to be smart about where I invested my time and money, but I knew that quick experiments and quick decisions could lead to quick progress.

    The SaaS world has the concept of a minimum viable product. That implies a deliverable, an “alpha” or “beta” test that’s at least semi-packaged for others’ consumption. I take the concept further: When I start to develop a product, I want to see the most primitive product that performs at least one new function. You might call it “most primitive improvement.”

    I’ll caution that rapid prototyping is not for everyone. You need a team accustomed to bootstrapping and thrives under that pressure. Of course, there is no other option for the self-funded startup. So, it comes down to assembling the right team for your company.

    Related: What I Wish I Knew Before Bootstrapping My Startup

    How rapid experimentation gives way to product iteration

    My team engages with developing new products by testing a thesis. We have a belief based on consumer behavior and looking at the marketplace that there is demand for a specific product. We begin the development of that product, but instead of keeping it hidden until it’s perfect, we put customers into beta testing as soon as it meets the standard of “most primitive improvement”.

    Here’s something really interesting. Every single time we’ve done this, we get feedback from beta testers that we didn’t expect. Whether it’s a common request for a feature we overlooked or an element we thought would be highly valued but is not being utilized at all, we can quickly take this feedback and roll it into the next release.

    I find this process especially exciting. One might even say, thrilling.

    The final product will often look and feel much different from our initial mockup, but that’s a good thing. We will have created a product that is an exact match for our target customer.

    Throughout my years in the investing space, I’ve seen companies backed by investors spend incredible sums of money building platforms that sadly completely missed the mark in terms of delivering what traders are really looking for. I believe this happens when development occurs in isolation from the intended users.

    But truth be told, rapid experimentation does not always lead to a success story.

    Rapid experimentation helped me pull the plug on a doomed project

    A few years ago, I wanted to see if it was worth starting a free service for traders similar to Twitch; in other words, a platform where people can easily stream their trading activity but where they’re in a tighter community of active traders. We got a few dozen people streaming at first, and they, in turn, had modest followings. But it didn’t take long for me to come to a difficult conclusion. Twitch and YouTube are successful because they attract a massive audience, attracting advertisers.

    My new platform was too niche. Even though it was free, our total available market was too small to bring in the advertising revenue we needed to keep that platform running. No amount of product iteration was going to change these dynamics, but the good news is that I was able to pull the plug while we were still in the early stages of development.

    I wrote off that project as a loss. But every loss is a lesson. There’s a saying in Silicon Valley: You don’t learn until you ship. I would expand on that to say: Ship fast. Fail fast. Ship again. Just like in trading, in business, we must be willing to take risks, but we must also cut losses quickly.

    A few takeaways:

    1. Think hard before seeking external funds for your venture. Self-funding doesn’t earn commissions for anyone, so you hear less about it, but it can potentially take substantial pressure off you.
    2. Focus on ROI, but also focus on ROT: Return on Time. Rapid experimentation, along with rapid decision-making, can not only save money but can gain you a first-mover advantage. You can be on version 4.0 — or be done with an unworkable experiment — before the competition has finished suiting up.
    3. Be proud of the money you raise and even prouder of what you rapidly ship. Many fortunes have been made with external capital, but even more great, young businesses have been snuffed out by the constraints and risk-aversion that the capital brought. By all means, do a round of high fives if you close a round of financing. But save your biggest celebrations for when you rapidly confirm your failed experiments and ship your newest winner.

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    Ross Cameron

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  • The 3 P’s of Selling, According to Andrew Sullivan | Entrepreneur

    The 3 P’s of Selling, According to Andrew Sullivan | Entrepreneur

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    “If an entrepreneur can’t pitch their business, they can’t succeed.”

    So says legendary pitchman Anthony Sullivan, who you probably know from his iconic OxiClean commercials. “It’s something we see happen all the time on Entrepreneur’s show, Elevator Pitch, where entrepreneurs have 60 seconds to pitch. If they don’t get an investor’s attention, they’re done for.”

    To help entrepreneurs who didn’t succeed on the show (and to offer all entrepreneurs the tricks of the pitching trade) Sullivan teamed up with business coach Tina Frey to host our new show Fix My Pitch. Over the course of this season, four failed Elevator Pitch contestants will receive training from world-class pitching and startup experts. Their ultimate goal? Scoring a second chance in the elevator to win a life-changing investment from our board.

    On this episode, Anthony and Tina meet two contestants with science-based companies and break down some of the basics of a winning pitch. Anthony says it comes down to the three P’s all lining up perfectly: “The pitch, the person and the product.”

    Here are some of the big areas Tina and Anthony drill down on with the entrepreneurs:

    • Exuding confidence with your words and body language
    • Finding that inner salesperson even if you are an introvert
    • Keeping your message simple and digestible
    • Selling by telling a great story

    See how the contestants respond to their first round of blunt criticism, and see if any of Anthony and Tina’s tips can be applied to you and your business. (Spoiler alert: 100% of these tips can be applied to you and your business!)

    Fix My Pitch contestants

    Ashley Rosulek, founder of Osweetfitness, affordable, high-quality luxury athletic wear

    Brandon Storms, founder and CEO of Retavo, a platform to launch and maintain a state-of-the-art enterprise-grade marketplace at an affordable price

    William Colton, MS, CEO of Paldara, a company harnessing the power of natural bacteriophage to fight and prevent disease.

    Arvin Bhangu, founder of Superintelligence, a research lab that aims to create a system that allows for the co-existence of humans and Artificial General Intelligence (AGI)

    Fix My Pitch experts

    Anthony Sullivan, celebrity pitchman and entrepreneur

    Tina Frey, keynote speaker, coach, communications expert, and author of The ART of Facilitation

    Fix My Pitch is sponsored by State Farm. New episodes stream Wednesdays now through October 4, 2023 on Entrepreneur.com. Season 10 of Entrepreneur Elevator Pitch premieres on October 18, 2023.

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    Entrepreneur Staff

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  • 7 Questions Every Founder Should Ask Potential Investors | Entrepreneur

    7 Questions Every Founder Should Ask Potential Investors | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    When I’ve pitched investors in the past, I prepare for the questions they’ll likely ask me, from market opportunity and size to financial metrics and timeline. From my own experiences and having consulted for multiple founders, I’ve learned that it’s just as important to interview your investors as it is for them to be convinced by your pitch.

    Choosing a partner goes beyond securing funds; it’s about finding a partner who believes in your vision and can contribute to the growth and success of it. Similar to a marriage, the investor-founder relationship should be built on trust, transparency and shared values. Take the time to make an informed decision, as it will significantly impact your company’s trajectory.

    Below are seven questions, alongside specific case studies, that founders should ask investors to help ensure a mutually beneficial partnership.

    1. How do you define your role as an investor?

    I’ve heard many responses to this, ranging from an investor wanting to be a resource to a decision-maker, which is why it’s crucial to ask this. Elle Lanning, Managing Director at Camino Partners and also a key member in the growth of KIND Snacks (currently valued at about $5B), always asks this question because both the investors and founders will have strong points of view. Lanning explains how “passion can be mistaken as direction,” and she’s persistent about reminding prospect and current investors that “while the Camino Partners team has their own point of views, it is up to the entrepreneurs and day-to-day leaders of a given company to run the business and make the best decisions for them.” The investor role is very diverse, particularly as some investors will see themselves in a governance capacity.

    KIND Snacks is a great case study for this question, as the founder, Daniel Lubetzky, bought back the stake owned by private equity firm VMG Partners for $220M in cash and notes. Lanning explains, “VMG was a solid partner for the time we worked together, but we reached a place where our objectives were different. We were fortunate to have run KIND in a healthy and sustainable way, so we had a lot of options when we decided that Daniel and the KIND team were best suited to continue to lead the brand’s growth.” It was a risk, but the result paid off, as the start-up is now valued at about $5 billion.

    Related: 5 Questions Every Entrepreneur Should Ask Potential Investors

    2. What is your exit strategy?

    Having an understanding of the timeline expectation and eventual exit strategy for the investor will help you determine if your future plans are mutually aligned.

    Related: When Should Business Owners Start Developing an Exit Plan? Here’s What You Need to Know.

    3. Can you provide references from other companies you have invested in?

    In line with the saying, “If you don’t know the horse, you check the track record,” it’s crucial to gather insights about the investors’ style, reliability and how they work with partner companies. By speaking with other founders to get references about investors, you’ll get a candid opinion of the personalities, best skills and added value that the investors may be able to provide. Again, aligning values and personalities will set you up for the best partnerships.

    4. What value are you able to bring beyond capital?

    Alongside funding, investors can offer valuable advice, connections and industry expertise. Have they invested in similar companies before? At times, great advice or case studies can support your company even more than their investment. Understanding the additional support and value an investor can provide is paramount.

    Related: Investors Are Overlooking the Gig Economy. Here’s How to Unlock Its Untapped Value.

    5. What are your expectations for growth and performance?

    The response to this question will help you assess if the investor has realistic expectations and if the expectations align with your plans. Adam Harris, Founder and CEO of Cloudbeds, a company founded in 2012 that raised about $250M, prioritizes clarity in outcome alignment. Harris explains, “You need to know if your investors are underwriting your deal to require a 2x, 3x, 4x, or 10x return (or whatever the number is). This answer will dictate the amount of risk they’re willing to pursue and the type of capital investments that follow. Know when enough is good enough for the outcomes you are seeking (future fundraises, liquidity events, etc.).”

    Most investors don’t share their thoughts about underwriting a business, but knowing their outcome requirements will align you with investors at every growth stage.

    Harris suggests that all questions to investors center around the following:

    1. How do you incentivize and keep incentivizing me to build what we both want?
    2. How do you and I stay aligned with risk appetite, enterprise value extraction and what’s right for the business?
    3. How do you underwrite my deal?

    If you can get full transparency on responses for the above, you’ll have a better shot at alignment, allowing you to move faster to focus on the big objectives.

    Related: How PR Can Attract Investors and Add Value to Your Startup

    6. How often do you expect to meet after funding?

    Some investors are going to be far more high-maintenance than others, and communication styles can make or break a partnership. You do want a decent amount of interaction. Investors can help find clarity with high-level decisions, but I suggest they stay out of the details, as this may weigh and slow you down.

    7. We have a challenge with this issue. Do you have any insight into how we may help solve it?

    The response to this can be very telling because it will shed some light on how the investor thinks, works and the type of value they can offer. It also demonstrates to the investor that you are open to their feedback and value their expertise as a potential partner.

    Choosing the right investors goes far beyond getting capital. Through open and honest conversations, look to find partners who believe in your vision, feel good compatibility and offer a funding package that will contribute to the growth of your business. Take some time to make the most informed decision possible and ensure clarity across all questions and expectations. If it doesn’t feel like love at first sight, reassess.

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    Elisette Carlson

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  • Crayola Launches Crayola Flowers Online Florist Business | Entrepreneur

    Crayola Launches Crayola Flowers Online Florist Business | Entrepreneur

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    Those flower bouquets you drew as a kid can finally jump off the page, thanks to Crayola’s latest endeavor.

    On Tuesday, the art supply brand launched an online florist called Crayola Flowers in partnership with Mrs. Bloom’s, a flower distributor, per CNN. The two companies will sell bouquets nationwide, with prices ranging from $49 to $150.

    Mrs. Bloom’s has been distributing flowers for 20 years with fundraising and helping nonprofits at the forefront of its mission, according to the Crayola Flowers website. Crayola Flowers will be a fundraising platform where buyers can select a nonprofit to receive a percentage of their purchase. Nonprofit organizations can also create storefronts for supporters to purchase flowers, with 10% to 50% of the proceeds going to the charity.

    Related: This Flower Company Walked Away From a Major Revenue Driver for a Heartwarming Reason — Now It’s Worth 8 Figures Anyway

    “Instead of just selling flowers when they’re needed, why not unite this idea of color and creativity with spreading kindness?” Warren Schorr, Crayola’s senior vice president of business development, global licensing and experiences, said in an interview with CNN.

    Crayola Flowers will also launch a mobile truck storefront to help with fundraising efforts at various events.

    Crayola has been in operation since 1903. Today, the company is a subsidiary of Hallmark Cards.

    Related: These Flower-Delivery Services Help Take the Stress Out of Valentine’s Day

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    Sam Silverman

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  • 3 Ways to Raise Capital as a Small Business | Entrepreneur

    3 Ways to Raise Capital as a Small Business | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Raising capital can be a challenge for anyone, but particularly for small businesses. Oftentimes, investors are looking to put their money into something with multinational growth potential rather than something more local. In many cases, you may need to raise smaller amounts, possibly in the thousands of dollars or the tens of thousands. Therefore, to raise money as a small business requires a different approach.

    As a multimillionaire real estate investor and trainer, I often teach my students how to raise capital for their first property deal. Many of my students are new to real estate and are looking to purchase a relatively cheap property in the North of England. This is unlikely to be of interest to a seasoned angel investor, but there are lots of people that this type of investment would suit very well. In many ways, this is a similar situation to raising capital as a small businessperson.

    I have found that there are many ways to raise capital for a small enterprise, whether as a joint venture or in the form of debt. Once you have mastered these skills, you will have a world of opportunity in front of you. But first a note of caution: Each jurisdiction has different rules regarding raising capital, so seek independent legal advice to make sure your chosen approach is compliant.

    Related: 3 Ways to Raise Capital and Take Your Business to the Next Level

    1. Talk to people you know

    When I am training my students, they sometimes tell me that they don’t know anyone rich to approach. The reality is, however, that when raising smaller amounts, you don’t actually need to know anyone rich. Many ordinary people have savings in the bank that are sitting there being eaten away by inflation. These people are often willing to lend that money out for a much higher return than they would get from the bank.

    Of course, they will need to know that their money will be safe. In real estate, this often means the debt will be secured against the property. In other areas of business, it might mean securing the debt against product inventory or by other means. Alternatively, depending on the other party’s risk tolerance, you could consider a joint venture partnership where you share the profits.

    Asking people you know for an investment can put both parties in a difficult position, therefore it is important to phrase your request correctly. Rather than asking directly, simply talk about your project and ask if they know anyone who might be interested in investing. If they want to invest, they will let you know. If they don’t want to invest, they can pass on the deal without any awkwardness. In addition, even if they don’t want to invest, there is always the chance that they know someone who might.

    Related: 5 Innovative Ways for Entrepreneurs to Raise Capital in Today’s Market

    2. Connect at business networking events

    The next way to raise capital is to attend business networking events. Business networking events are a great way to get to know people who are potentially interested in investing in new projects. It is important to remember, however, that all the other business people attending the event are also looking to promote their business. You need to listen and learn about what they are doing and find ways for your project to solve their problems.

    There may be people who are looking to deploy capital either to get a fixed return or on the basis of a joint venture partnership. Of course, these people are highly unlikely to want to invest in your project on the basis of a single meeting at a networking event! Your job is to plant a seed.

    Explain what your business is and mention that one way you expand is to raise capital from business owners who want to put their money to work. Explain that they prefer not to keep their money in the bank where its purchasing power is being eaten away by inflation. Don’t suggest that they invest at this stage. Let them think about what you have said and come to you.

    Related: How Entrepreneurs Can Maximize Networking to Increase Funding

    3. Engage on social media

    Another way to get investors’ attention is to document your journey on social media. People invest with people that they know, like and trust — and social media is a great way to get people to know, like and trust you, so long as you’re authentic.

    If you let others see the human being behind the brand, you will find like-minded people who gravitate toward your personality and vision. These people are more likely to want to invest in your business or project. You don’t need millions of subscribers on YouTube or Instagram either, just a few highly targeted followers who care about your brand.

    When raising money from the public on social media, it is especially important to make sure you are following the law. Speak to a lawyer and understand what is and isn’t allowed in your jurisdiction. However, as long as you follow the applicable rules, social media is a great way to connect with investors.

    It’s time to take action

    It can be hard to raise capital for a small local business if you haven’t learned the right strategies. Ultimately, however, raising capital is possible at any level — if you employ the correct approach. If you know how to find and communicate with your target investors correctly, you can easily raise capital for your small business.

    You have just learned everything from how to correctly approach people you know to how to use social media to your advantage. Now that you have read this article, it is time to take action. Those who take little to no action will continue to find raising capital hard. On the other hand, those who apply the lessons above will find that raising capital for their small enterprise is a lot easier than they thought.

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    Samuel Leeds

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  • Bootstrapping vs. Venture Capital — What’s Best for Your Business? | Entrepreneur

    Bootstrapping vs. Venture Capital — What’s Best for Your Business? | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Every person who’s founded a business knows that financing your idea is one of the hardest but most important early steps. In fact, creating a stable financial nest for your new company might be the difference between a company that thrives and one that fizzles out.

    There are two primary methods of financing: looking for venture capital and bootstrapping. Choosing which financing method you go with is a crucial decision that may have long-term impacts on your business.

    So, how should you decide which method to pursue?

    Related: 9 Advantages Of Bootstrapping Your Company

    Bootstrapping

    Bootstrapping is the process of starting a business with no outside funding. This is an achievable way to start your company because you can focus on building your team and product exactly how you want. Further, bootstrapping typically means you’ll reach an initially smaller audience, so you’ll have time to get feedback from early users before launching to a wide audience.

    The advantages of bootstrapping include a bigger focus on customers. Because you don’t have a huge nest egg, pleasing your early customers is your lifeline. So, you’ll focus more on user retention and building long-term customer relationships.

    Disadvantages of this creative financing option include slower growth. Because you’re funding yourself, you’ll have less access to expensive technology that affords fast production processes. Further, you’ll have to rely more on personal savings or debt in order to jumpstart your business.

    Seeking venture capital

    On the other hand, you may opt to seek venture capital. Venture capital is a type of financing through private equity. In other words, investors put money into your business, betting that it will become a successful venture. By going with venture capital, your business will grow faster, resulting in a quick return on investment.

    The benefits of venture capital include less personal risk. You’re not pouring your own money into the business, so you don’t risk losing your own money. Additionally, getting a loan from a credible investor will increase your own credibility.

    However, drawbacks of venture capital include the expectation to grow quickly and the initial reduction of your stakes as an owner of the business.

    Related: 6 Important Factors Venture Capitalists Consider Before Investing

    Choosing the best financing option

    The decision between bootstrapping and looking for venture capital depends largely on the state of growth that you’re in. In fact, many great investors often want to see evidence that you’ve successfully bootstrapped for the first stage of your business.

    But why? Because successful bootstrapping serves as evidence that you’re smart and hardworking — and that you’ve got a good idea.

    However, say your business is in an industry that requires a large amount of upfront research, such as the biomedical or electric car companies. In this case, you’ll need a huge amount of capital, which will likely require raising money from outside investors. But if you can bootstrap the formation of the company and proof of concept, you’ll face less dilution in the venture capital process as the founder. Further, it means you can embrace a lean-and-mean, efficient philosophy toward operations.

    In this case, you prove that you’re efficient when it comes to using capital. It also proves you’re more resourceful than some business owners and entrepreneurs. Further, it shows that you can be innovative out of necessity.

    So, if you’re creating a good product and your business is successful, you’ll begin to gain traction in your industry. Then, there will inevitably come a time when you start to outgrow the resources that are available to you on your balance sheet. As a result, your own bootstrapping funds will cease to be able to fund your business’s growth as aggressively as necessary.

    When this happens, it’s likely best to raise outside capital. In fact, this is often the best way to take advantage of the opportunity you’ve created for yourself. In this case, you should have an easier time finding funding.

    Why seeking growth capital is easier than seeking startup funding

    Historically, it’s easier to find growth capital than it is to seek startup funding. So, because you’ve bootstrapped for a period of time, you’ve given yourself the opportunity to prove the viability of your idea. As a result, seeking venture capital will be easier as you can approach investors with successful results about your company.

    At the end of the day, how you fund your business is up to you. Your own evaluation of the state of your business, the viability of your product and the potential of your business to generate profit should help you determine which avenue is best for you. Bootstrapping and seeking venture capital both have significant benefits and drawbacks. So, you should evaluate where you are in your business when choosing between the two.

    Most likely, the best option is a combination of the two. Consider the stage that your business is in when deciding whether to choose bootstrapping or seeking venture capital in order to guarantee the highest level of success.

    Related: How I Bootstrapped to $100 Million Without Venture Capital Funding

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    Cyrus Claffey

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  • Anthony Sullivan and Tina Frey Share the Secrets of a Killer Pitch | Entrepreneur

    Anthony Sullivan and Tina Frey Share the Secrets of a Killer Pitch | Entrepreneur

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    Who says there are no second chances in life?

    On our hit show Entrepreneur Elevator Pitch, contestants are challenged to step into an elevator and pitch their business to a camera in 60 seconds or less. On the other side of that camera is our board of investors. If they like what they hear, the elevator doors open and contestants step inside the boardroom where they have the chance to win life-changing funding and mentorship from the smartest minds in business. If the investors don’t like what they hear? The elevator gets sent back down, along with the entrepreneur’s dreams.

    For nine seasons, there have been no do-overs in the elevator — much to the dismay of entrepreneurs who ran out of time, got tongue-tied, or simply froze in the headlights. But that’s all about to change.

    Introducing our new series, Fix My Pitch, where failed contestants have a chance at redemption. Led by pitch masters Anthony Sullivan and Tina Frey, former contestants will workshop their weaknesses and hone their strengths with a team of business experts. By the end of this four-week pitching boot camp, these entrepreneurs will be challenged to once again face their pitching fears. The prize? A never-before second chance on Elevator Pitch. See who is able to rise to the challenge and who gets stuck each week on Fix My Pitch!

    Fix My Pitch contestants

    Ashley Rosulek, founder of Osweetfitness, affordable, high-quality luxury athletic wear

    Brandon Storms, founder and CEO of Retavo, a platform to launch and maintain a state-of-the-art enterprise-grade marketplace at an affordable price

    William Colton, MS, CEO of Paldara, a company harnessing the power of natural bacteriophage to fight and prevent disease.

    Arvin Bhangu, founder of Superintelligence, a research lab that aims to create a system that allows for the co-existence of humans and Artificial General Intelligence (AGI)

    Fix My Pitch experts

    Anthony Sullivan, celebrity pitchman and entrepreneur

    Tina Frey, keynote speaker, coach, communications expert, and author of The ART of Facilitation

    Fix My Pitch is sponsored by State Farm. New episodes stream Wednesdays now through October 4, 2023 on Entrepreneur.com. Season 10 of Entrepreneur Elevator Pitch premieres on October 18, 2023.

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    Entrepreneur Staff

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  • 3 Essential Factors Your Startup Should Consider If You Want It to Bloom | Entrepreneur

    3 Essential Factors Your Startup Should Consider If You Want It to Bloom | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Venture capital funding has always been a complex and highly competitive landscape where startups and established businesses alike vie fiercely for investor attention and financial backing. And in recent times, this state of things has only grown progressively worse.

    Over the past two years, global markets have observed a continuous fall in venture capital funding. In Q1 2023, the figure reached $76 billion, less than half the amount recorded in 2022 ($162 billion). Funding into the fintech sector amounted to just $23 billion in the first half of 2023. At the same time, the number of funding rounds dropped by 64% compared to the same period in 2022.

    The investor sentiment is waning, and to survive in this grim climate, startups must be capable of rapidly adapting to changes and possess a sensible MVP capable of attracting investors and customers alike. These are the foundation upon which a business is built and from which it can improve based on evolving customer needs and emerging market trends.

    Let’s look at how companies can adapt their operations in a challenging environment where investors are becoming more cautious and their funding scarcer.

    Adapt your startup to the realities of the BANI world

    Before we get into the detailed recommendations on what parts of your business you should focus on when seeking investment opportunities, I believe it important to point your attention to a more overarching matter. Namely, the modern-day business landscape in which companies find themselves operating.

    In today’s rapidly changing global environment, any startup founder must know the BANI world and understand its nuances and rules. BANI stands for “Brittle, Anxious, Non-Linear, and Incomprehensible,” representing the key characteristics of the current business environment.

    Today’s world is prone to sudden disruptions and shocks that can significantly impact businesses and their activities. As such, leaders must learn to anticipate potential risks and build resilience within their organizations. To maintain an efficient business in times of uncertainty and volatility, leaders need to monitor market dynamics constantly, understand the ongoing trends and adapt their strategies accordingly.

    In short, understanding the modern realities is essential for heads of startups to successfully steer their companies towards growth and secure investments from stakeholders who value adaptability and foresight. It is particularly important for startup founders, as such businesses already tend to start their journeys in a financially vulnerable position. Failing to acknowledge the aspects of the BANI world may leave them ill-prepared to face disruptions, competition, market shifts and other threats.

    By taking care to keep an eye on these complexities, on the other hand, founders can make more informed decisions and adjust their business strategies accordingly. This can build their organizations more resiliently and attract investments by showcasing their ability to thrive in a rapidly changing and challenging environment.

    Now that we have cleared up the BANI world issue, let’s take a closer look at the actions that startup founders can take when fundraising. Based on personal experience, I recommend focusing on three main aspects of your business when you’re planning to engage with promising investors.

    Related: How to Adapt in a Rapidly Changing Economy

    1. Grow your revenue rather than your turnover

    When the market is going through a boom, investors tend to look at how rapidly a company can grow and capture its share in the market. But in today’s business landscape, it is more important for them to understand that a company can endure and survive in harsh circumstances. And survive for a long time, at that. If you have the capacity to be profitable on top of that, then all the better for you.

    Make sure to demonstrate this fact openly and proudly, as it would make a lot of sense for investors to invest in you to drive this success further and get their share of the profit from it.

    Related: We Can’t Rely on Venture Capital Funding to Build a Just and Thriving Entrepreneurial Economy. Here’s What to Do Instead

    2. Pay attention to your company’s data and analytics

    Showcase figures that would indicate to investors that your business is viable and that they can invest in it safely. In my own company, for example, we demonstrated how much we managed to reduce costs while boosting revenue simultaneously. Things like that give investors the information that you can operate effectively, which worked to great effect for us.

    3. Show that you can make responsible financial decisions

    If investors are to put their money into your startup, it would put their minds at ease to know that you can invest said money competently and precisely. More specifically, under the current market conditions, pouring funds into things that yield a quick result is necessary. You are required to be able to adapt to market trends and make quick decisions that provide quantifiable outcomes.

    Fundamentally, the most important thing is to demonstrate a set of skills and tools that would indicate to investors that your business can maintain itself regardless of the outside conditions in a market filled with uncertainty.

    Related: How to Think Outside the Box and Craft a Values-Aligned Investment Offering

    Data-driven decisions give businesses the power to grow

    By staying updated on industry developments, customer preferences and the competitive landscape, businesses can identify opportunities and adapt their strategies to stay ahead of the curve. This requires strategic thinking, flexible problem-solving skills and a willingness to take calculated risks. It falls to the company leadership to monitor performance and make informed decisions that would enable their business to maintain a level of success attractive to investors.

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    Greg Waisman

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  • Drew Brees: From Football to Franchising | Entrepreneur

    Drew Brees: From Football to Franchising | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    In this captivating podcast episode, hosted by Jeff Fenster, founder and CEO of Everbowl, former NFL quarterback Drew Brees shares his remarkable transition from the football field to the world of entrepreneurship. The conversation between these two accomplished individuals offers a unique blend of insights from both the host and the guest, adding credibility and depth to the discussion.

    Jeff Fenster, a highly successful entrepreneur himself, brings his expertise and experience to the table as the host of the podcast. As the founder and CEO of Everbowl, a fast-casual restaurant chain specializing in superfood bowls, Fenster has demonstrated his ability to identify market opportunities and build a thriving business. His entrepreneurial journey serves as a testament to his knowledge and understanding of the challenges and triumphs that come with building a successful brand.

    Fenster’s entrepreneurial journey began with a vision to create a healthy and delicious dining option that would cater to the growing demand for nutritious food. With a passion for health and wellness, Fenster recognized the need for a fast-casual restaurant that offered nutrient-rich meals without compromising on taste. This realization led to the birth of Everbowl, a concept that has since gained popularity and expanded to multiple locations.

    As the founder and CEO of Everbowl, Fenster has been instrumental in shaping the brand’s identity and driving its growth. His hands-on approach and commitment to quality have earned him a reputation as a respected figure in the restaurant industry. Fenster’s ability to identify market trends, adapt to changing consumer preferences, and build a strong brand presence has been key to Everbowl’s success.

    On the other side of the conversation, Drew Brees, a legendary NFL quarterback, brings his own credibility and expertise to the discussion. With a career spanning two decades, Brees is widely regarded as one of the greatest quarterbacks in NFL history. His accomplishments on the football field, including a Super Bowl victory and numerous records, have solidified his status as a respected and admired figure in the sports world.

    Beyond his football career, Brees has also made a name for himself in the business world. As a franchisee for Jimmy John’s sandwiches and an investor in various other ventures, Brees has demonstrated his entrepreneurial acumen and ability to navigate the complexities of the business landscape. His experiences as a franchise owner and his commitment to authenticity in his business ventures further enhance his credibility as a successful entrepreneur.

    Brees’ journey into entrepreneurship began with his foray into the world of franchising. As a franchisee for Jimmy John’s, Brees gained firsthand experience in running a business and managing a team. This experience sparked his interest in franchising and opened his eyes to the possibilities that lay beyond the football field. Brees recognized the value of aligning himself with established brands that shared his values and resonated with his personal brand.

    Brees’ commitment to authenticity has been a guiding principle in his entrepreneurial endeavors. He understands the importance of staying true to oneself and maintaining unwavering integrity in business. This commitment not only ensures a genuine connection with his business ventures but also helps build trust and loyalty among his customers. Brees believes that authenticity is the key to building a successful and sustainable business.

    But what sets Brees apart is his ability to find love in difficult situations. He fearlessly opens up about his personal encounters with failure and adversity, emphasizing the importance of resilience in overcoming challenges. Brees firmly believes that setbacks are not the end of the road but rather stepping stones to success. He encourages aspiring entrepreneurs to embrace failure, learn from it, and use it as fuel to propel themselves forward. By reframing challenges as opportunities for growth, entrepreneurs can approach difficult situations with a positive mindset, unearthing the hidden gems within every setback.

    Brees’ experiences as a franchisee have also highlighted the value of the franchise community. He recognizes the wealth of knowledge and support it offers. Brees cherishes the opportunity to learn from fellow franchise owners, understanding the power of collaboration and shared experiences.

    The franchise community provides a vibrant platform for entrepreneurs to connect, exchange ideas, and gain invaluable insights from others who have walked a similar path. Brees’ experiences underscore the importance of building relationships and leveraging the wisdom of others in the pursuit of success.

    In addition to his franchise ventures, Brees has also found success in expanding his Everbowl locations. Everbowl, a fast-casual restaurant chain specializing in superfood bowls, aligns with Brees’ commitment to health and wellness. Through his involvement with Everbowl, Brees has not only expanded his business portfolio but also contributed to promoting a healthy lifestyle among his customers. This expansion showcases Brees’ ability to identify opportunities that align with his personal values and leverage his platform to make a positive impact.

    Brees’ journey into entrepreneurship is a testament to the power of setting goals and embracing challenges. He emphasizes the importance of having a clear vision and working tirelessly to achieve it. Brees’ relentless pursuit of excellence on the football field has seamlessly translated into his business endeavors. He believes that the same principles of discipline, hard work, and dedication that propelled him to success in football are equally applicable in the world of entrepreneurship.

    As Brees reflects on his journey, he acknowledges the lessons learned from both successes and failures. He understands that failure is not a reflection of one’s worth but rather an opportunity for growth and improvement. Brees encourages entrepreneurs to embrace failure as a stepping stone to success, reminding them that even the greatest achievements are often preceded by numerous setbacks.

    In conclusion, Drew Brees’ journey from the gridiron to the boardroom is a captivating tale that offers invaluable insights for aspiring entrepreneurs. His entrepreneurial mindset, emphasis on authenticity, unwavering resilience, and commitment to personal values serve as a beacon of inspiration. Brees’ unwavering belief in finding love in difficult situations and his deep appreciation for the franchise community further underscore the importance of resilience, collaboration, and continuous learning in the entrepreneurial journey.

    As entrepreneurs navigate their own paths, they can draw inspiration from Brees’ experiences and apply his insights to their own ventures. By embracing challenges, staying true to their values, and seeking support from the vibrant community, entrepreneurs can conquer obstacles and achieve their loftiest goals. So, gear up, embrace the unknown, and let Drew Brees’ entrepreneurial spirit guide you to victory in the game of business.

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    Jeff Fenster

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  • Amazon is Rightsizing, But What Does That Mean for FBA Brands? | Entrepreneur

    Amazon is Rightsizing, But What Does That Mean for FBA Brands? | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    In 2021, Wall Street and private equity firms invested 12 billion dollars in startups consolidating popular brands sold on Amazon. These aggregators of brands seemed like they would be the next big thing. By 2022, that number had risen to 16 billion dollars in capital raised. It was a “cool” time to be in ecommerce.

    The tone around aggregators has begun to shift, though, as it’s difficult to maintain this kind of growth non-stop. These aggregators are now aggregating themselves as rising interest rates and sinking online demand change the mood.

    Thrashio is the largest aggregator in the spotlight, notoriously the first unicorn aggregator. It raised billions and bought hundreds of brands selling on Amazon. This reorganization was an indicator of an industry rightsizing — aggregator growing pains. Amazon seller acquisitions declined in 2022 but didn’t stop completely. Strategic players, such as holding companies and private equity funds, continued to buy, but most Amazon aggregators saw the writing on the wall: the gold rush was over.

    Every aggregator is different, but generally, their funding takes the form of one part equity and three parts debt. The debt was used for acquiring Amazon sellers, while the equity expanded the aggregator’s operations. As the initial loan covenants prevented aggregators from selling assets below a set amount, they have to be revised for these new deals and acquisitions.

    Related: How Amazon Got Americans to Spend $12.7 Billion in 2 Days Without Lifting a Finger

    Aggregator giants like Thrashio, SellerX Group and Razor Group are shoring up for uncertain times. Capital isn’t flowing like it was in 2020; the threat of recession is right around the corner. If you’re wondering why these large mergers are happening now, the key to understanding it all lies in the special recession we’re having— a rolling recession.

    As Loyola Marymount University economics professor Sung Won Sohn identified, we aren’t seeing the economy-wide recession many were expecting. Instead, it affects industries and sectors in waves. According to Sohn, the Federal banks’ transparency in its rate-hike campaign and general access to information online, promote action in advance. The tech sector, including aggregators, has been acting accordingly.

    So, where does this leave all the Fulfillment By Amazon brands looking to get scooped up by an aggregator?

    I’ll start by saying we were very fortunate to have this sort of energy injected into the e-commerce industry and the Amazon marketplace. We shouldn’t be disappointed it’s over, but grateful it happened in the first place. Aggregators, as a whole, aren’t going to disappear. They’re now a cornerstone in e-commerce, and deals will continue.

    Related: Want to Sell Your Amazon FBA Business? Here Are 5 Lessons From Someone Who’s Overseen $100 Million in FBA Acquisitions

    As all the aggregators merge and mix, we’ll continue to see those select few giants establish themselves on the larger stage. Eventually, it will be a clear divide, like Coca-Cola and Pepsi. And just like Coke or Pepsi, they’ll keep acquiring the smaller innovating brands.

    We’ll see this new ecommerce model start solidifying in the coming years: create a brand, build it up, sell it to an aggregator and exit. It’s an option for liquidity in what has traditionally been a non-liquid industry (pun intended).

    Plus, you don’t have to bank on selling to an aggregator. For each Coca-Cola and Pepsi, there’s a Red Bull. Red Bull continues to maintain its autonomy, unbeholden to investors. Its brand is independent, built from its own capital. It’s similar to how Anker built up its brand on Amazon. Most of these aggregators were inspired by Anker’s ability to grow as an Amazon-native brand. It tapped into multiple categories, spun off its own brands like Soundcore and Eufy, and became a household name. It’d be like if Coca-Cola and Pepsi had started by trying to replicate Red Bull’s success. Is that sustainable for aggregators, though? Can they solidify their own brands?

    Related: The New Pandemic and Its Effects on Amazon Aggregators

    I’m curious to see what will happen in the next five years. We know aggregators have reached a limit and won’t be growing like they used to. Investors will eventually want their exits. Will aggregators need to downsize? Will they be focusing exclusively on the brands that they’ve acquired? Will we see dramatic restructuring? We’ll have to wait and see.

    For the Amazon-native brands out there looking to capitalize on the aggregator landscape, I say: aim to be Red Bull. Strengthen your brand, but be open to that potential liquidity. If you’re lucky, you might be aggregated. If you’re even luckier, you’ll inspire another whirlwind movement in e-commerce.

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    Tyler Metcalf

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  • Lacking Trust? Here are 5 Ways to Establish Credibility in Content Marketing | Entrepreneur

    Lacking Trust? Here are 5 Ways to Establish Credibility in Content Marketing | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Over the past few years, content marketing has become both a buzzword and a bonafide strategy for brands to establish credibility with their audiences. However, not every piece of content a brand shares has the same impact.

    Content pieces that make a difference and truly enhance a brand’s credibility provide value and knowledge to the audience. These pieces retain their value beyond their initial publication. They become resources that audiences will draw on for years to come. In this article, we explain how your business can use content marketing to establish credibility.

    Related: Here’s How to Improve Your Business’s Content Marketing

    The power of credibility in content marketing

    In today’s digital media and marketing landscape, audiences are flooded with messages from various sources. The sheer number of those can make it hard to distinguish between trustworthy sources and others. Establishing credibility within a brand’s industry and with its audiences can improve brand perception, increase audiences’ trust and become the cornerstone of long-term success in content marketing.

    Building a high-impact content marketing strategy starts with understanding your audience’s needs and pain points. Researching your audience’s characteristics beyond basic demographics and developing customer personas helps with this process.

    Related: 6 Key Tips to Level Up Your Content Marketing Strategy

    Valuable and educational content

    Ask what your brand can offer the audience that no one else can. The answer to this question will help the brand team define what constitutes valuable and educational content. This type of content does more than recite product features. It solves problems and removes pain points for the audience.

    Valuable and educational content can take different forms. Blogs and articles work well for some brands and their audiences, while complex topics are often better explained via infographics or videos. Podcasts and webinars can also be effective in building credibility with the audience.

    Naturally, what constitutes this type of content will vary greatly between brands. However, there are several best practices that many great pieces have in common:

    1. Based on in-depth research

    Outstanding content requires in-depth research. Aside from understanding their brand and the products and services the business offers, content marketers may need to draw on independent, external sources, including data-driven insights, expert opinions and overall industry trends. Developing quality content takes time, but it will pay dividends in the future.

    2. Complete with actionable and practical advice

    High-value content would not be complete without actionable advice. Content that audiences will return to repeatedly needs to be practical and applicable. It also needs to be relevant to the audience and offer solutions readers can implement immediately.

    These might be examples of content created by other brands or case studies of brands that used content marketing successfully to build the businesses they represent. The collaboration platform Intuit is one of those brands. The company targets entrepreneurs and asks them to solve product challenges. The winners receive cash. Intuit’s content marketing strategy has kept audiences engaged as well as fostered innovation.

    Related: 5 Steps to Creating a Content Marketing Strategy That Actually Works

    3. Help establish thought leadership

    Educational content that offers value to its audience can help brands establish thought leadership in their niche. As audiences continue to benefit from a brand’s content regularly, content authors become sought-after. In many cases, they can extend their reach through engagements like public presentations and speaking opportunities.

    4. Incorporate social proof

    If customers or peers have already reviewed your brand, it is worth including this proof in your content marketing. Social proof, especially from independent sources, strengthens your brand’s content marketing messages and raises its credibility.

    Related: 4 Ways to Leverage Social Proof to Grow Your Business Online

    5. Publish consistently and frequently

    Audiences value content that they receive consistently and frequently. What that means in terms of days, weeks or months may vary from brand to brand. What matters most is that your brand keeps its promises to potential customers and other audiences.

    Amplifying your content while measuring success and iterating

    High-quality content pieces stand the test of time. For that reason, they deserve promotion and amplification. If your brand publishes long-form blogs or holds webinars, consider using shorter versions or snippets as part of your social media content. This allows you to drive traffic to the original blog post and create interest in others.

    Despite the most detailed strategic planning and content development, content marketing may not always work. That is why it is important to measure the performance of each piece and understand which pieces connect best with your audience.

    Measure impressions, conversions and engagements to understand what works best and adjust your strategy to maximize those opportunities.

    Content marketing has the greatest impact when it offers valuable and educational insights to its audiences. Spending the time to develop and research great content will take more time initially, but it will build brand credibility and lead to greater long-term returns.

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    Jessica Wong

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  • How I Bootstrapped to $100 Million Without VC Funding | Entrepreneur

    How I Bootstrapped to $100 Million Without VC Funding | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Venture capital (VC) funding has plummeted in 2023 due to high interest rates and less enthusiasm from investors. Research shows that VC funding almost halved globally in the first six months of this year, ushering in what some have called a VC winter.

    Despite this, entrepreneurs shouldn’t give up hope of making their dreams a reality. Even though VC funding has slowed to a trickle, good ideas to launch a successful business have not.

    You don’t have to immediately go into debt to start a business — I didn’t. All I had when I started was a phone, a computer and my own personal credit cards. I took my idea, ran with it, and now we’re bringing in over $100 million in annual revenue.

    Of course, it’s always more ideal when you have the help, but there are ways to jump-start your business without VC funding, and I’ll give you some pointers.

    Related: How This Entrepreneur Went Global Without VC Funding

    Hit the reset button on all of your expectations

    You don’t need a pile of cash to get started. In truth, there is some benefit to going at it alone. Without investors at your side pumping influence into your company, you have full control and less pressure from outside forces.

    But the consequence of this is adjusting your expectations in the beginning to get things moving. After all, Steve Jobs lived in his parents’ garage for years while developing his computers.

    Starting a business is a difficult undertaking and greatly affects your work-life balance and day-to-day comforts. When I started PostcardMania in 1998, I drove an old Nissan Pathfinder that was paid for (so I didn’t have a car payment), didn’t have a weekly salary, and I didn’t go on vacation. I worked very long days, seven days a week.

    At times, it was difficult to pay for living expenses, so I negotiated repayment terms to cover bills and maxed out a credit card or two to get by. I even bartered a room in my home to get free childcare because I had two young children at the time.

    I was funneling as much money as I could into PostcardMania, and once we had enough clients to get a building, I took money out of my own home to help pay for it. After about five years — once we finally reached eight figures in annual revenue — I finally decided to reward myself with a little luxury: a Mercedes convertible.

    Everyone wants to skip the hardship and get to the part where they become a millionaire. Overnight success stories hardly ever happen though, so strap in and get ready for some challenges. The hard work will be worth it to reach your destination.

    Related: You Don’t Need VC Funding to Grow Your Startup. Here’s How to Turn Customers Into Investors.

    Market your business more than most people think is sane

    Oftentimes, people look at large companies with huge ad budgets and think, “Well of course they spend a ton on advertising — they have the money to!”

    What most people (even entrepreneurs) don’t realize is that those companies are spending big chunks of their revenue on marketing out of necessity, not luxury.

    Another hard truth: Investing hard-won money in marketing doesn’t always result in huge returns. Any marketing strategy you use to generate leads, like Facebook advertising, podcast sponsorships or direct mail, is not 100% guaranteed to deliver results. It’s a constant, ever-evolving game of figuring out what is working and what isn’t.

    That is one reason why many business owners are so reluctant to spend money on marketing services. It’s not a straightforward purchase like buying work boots or supplies.

    You’re going to win some, and you’re going to lose some.

    It takes time and effort to find that special marketing formula for your business that works and brings in revenue. This is also why it’s so important to invest in quality marketing services, stay consistent with it over long periods of time and test multiple methods all at once to see what works best.

    The Chamber of Commerce, a research company for entrepreneurs, states poor marketing initiatives as the #1 reason for small business failure. I can confirm this throughout my 25 years of experience serving small business owners. The ones that thrive don’t give up on marketing. In fact, they spend insane amounts of their resources on it.

    Related: Can You Scale a Startup Without Venture Investment?

    Cultivate and maintain the best talent with a meaningful business purpose

    Promoting my right-hand woman, Melissa Bradshaw, to president of PostcardMania was a huge moment for me. I remember when I first started my business — with her right there by my side from day one — she helped drive my kids to school and answer phones. Today, she’s buying large digital printing presses and establishing entire new departments in my company.

    She’s the perfect example of why you need to focus on finding the right people and then allow them to grow into the roles they were meant to hold. Not only was Melissa a key person in helping me make my dream into a reality, she also paved the way for finding more people to join us and turn PostcardMania into the thriving business it is today.

    Melissa has two key qualities that I look for in every employee at PostcardMania: willingness and ownership. Willingness to do whatever is necessary to get the job done and the desire to take full ownership of any task she took on. When you are building a business, you need to find people who not only have the right skills for the job but also passion for your purpose.

    If you want your staff to take ownership, you have to offer them more than just a J-O-B, and you have to allow them the autonomy to make decisions necessary to get their job done. In addition to that, establish a purpose for your business that goes beyond offering the “the best” products or services. At my business, we sell marketing services, but our purpose is to help small businesses grow, because a strong small business class is a better economy for all of us. And we feel it! We love when our clients succeed!

    We’ve focused on hiring people who believe in this purpose for years, and we recently reached an all-time high for retention.

    Lastly, once you have those people, treat them like gold, and don’t be afraid to give them space for their own successes and failures. I’ve had my share, but they’ve made me into the person I am today.

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    Joy Gendusa

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  • Can Mushrooms Save the World? Tune into This Episode of ‘Elevator Pitch’ to Find Out. | Entrepreneur

    Can Mushrooms Save the World? Tune into This Episode of ‘Elevator Pitch’ to Find Out. | Entrepreneur

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    As an entrepreneur, if you ever encounter the wonderful problem of having multiple investors showing interest in your startup, but you can only choose one, what would you do? That’s the dilemma a pair of co-founders face on this fast-paced episode of Entrepreneur Elevator Pitch. While the financial investment is at the core of what they’re after, the founders wind up evaluating the investors based on the mentoring opportunities that they bring to the table.

    Is your vision to get your product into big box stores? Or do you want to be an e-commerce powerhouse? Are you expanding internationally? Capitalizing on an increasingly popular podcast? Just as our founders on this episode eventually decide, sometimes it’s best to pick an investor who has the contacts and experience that compliment your vision.

    Related: Is It a One-Hit Wonder or Can This Mom’s Business Scale?

    Also on this episode of Entrepreneur Elevator Pitch, our investors get critical about one contestant’s pitch and gauge the business acumen of the founder of a new agri-tech startup.

    Episode 7 Entrepreneur Elevator Pitch board of investors:

    • Marc Randolph, co-founder and first CEO of Netflix, master of scaling
    • Kim Perell, CEO of 100.co, serial entrepreneur and investor
    • Jonathan Hung, angel investor and Managing Partner of Entrepreneur Venture Fund

    Episode 7 Entrepreneur Elevator Pitch contestants:

    Season 9 of Entrepreneur Elevator Pitch is presented by Amazon Business with support from State Farm. New episodes stream Wednesdays on entrepreneur.com. Follow Entrepreneur Elevator Pitch on Facebook, YouTube and Instagram.

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    Entrepreneur Staff

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  • Why Corporate Social Responsibility Matters in Executive Decision-Making | Entrepreneur

    Why Corporate Social Responsibility Matters in Executive Decision-Making | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Here’s a reality that can’t be denied: The notion of corporate success is being radically reshaped. The financial bottom line is no longer seen as the sole measure of a company’s achievement. In today’s connected, hyper-transparent world, there’s a growing call on CEOs and leaders to create sustainable, measurable value for shareholders and society.

    This shift in mindset has led to the emergence of Corporate Social Responsibility (CSR) as a significant factor in executive decision-making. CSR encompasses activities aimed at achieving social, environmental and economic benefits while encouraging ethical behavior. Executives who fail to integrate CSR into their decision-making fabric run the risk of alienating stakeholders, damaging their brands, and eroding their competitive positions.

    Related: 3 Tips for Making Social Responsibility a Priority at Your Startup

    What is corporate social responsibility?

    Here’s a question: Who does your company truly serve, and how?

    The answer to this question is at the core of CSR — and may be a bit eye-opening when you consider your own organization. It’s no longer enough for a company to focus solely on generating profits and shareholder value; they must also consider their actions’ social, environmental, and economic impacts.

    Corporate responsibility encompasses the idea that companies have a duty to their stakeholders — including shareholders, customers, suppliers, employees and society — to operate ethically and transparently.

    CSR encompasses various initiatives, each of which is anchored by four key tenants:

    1. Ethical functioning: Upholding ethical standards across all business operations, ensuring stakeholder fairness, integrity and respect.
    2. Social equity: Fostering social inclusivity and development via diversity programs, support for disadvantaged communities and human rights advocacy.
    3. Environmental stewardship: Adopting sustainable practices to lessen the company’s environmental impact through waste reduction, carbon emission control and investment in green energy
    4. Community engagement: Participating in community betterment through philanthropy, volunteering, and local event sponsorship, contributing to a company’s external social responsibility profile.

    While being viewed as a socially responsible business is an excellent growth strategy, there’s more to it than just a good PR move. Here are four reasons why every leader should emphasize corporate social responsibility within their organization:

    1. Attracting and retaining talent

    Potential employees are looking beyond attractive salaries and traditional benefits. They’re interested in their company’s values, seeking employers who share their commitment to positively impacting society.

    Recent studies show that three-quarters of millennials are looking into a potential workplace’s environmental commitments when in the market for a job. And once on board, employees proud of their company’s CSR commitments tend to have higher engagement and loyalty, reducing turnover rates and boosting productivity.

    2. Building a positive corporate culture

    CSR initiatives foster a positive corporate culture. Employees feel valued when companies commit to ethical practices, invest in their wellbeing and engage in initiatives for society.

    When your internal team is united and inspired by the same values, a positive company culture radiates to external stakeholders — customers, suppliers, partners, etc. This can lead to increased trust in your brand and stronger relationships with all those involved.

    3. Strengthening community relations

    Companies don’t exist in a vacuum — they’re part of broader communities. By investing in CSR initiatives, you also invest in the health, welfare and prosperity of the community around you.

    This mutually beneficial relationship with the community builds trust and goodwill between your organization and its stakeholders, inspiring a more potent connection while helping create economic opportunity in the region you serve.

    4. Enhancing investor attraction

    Here’s another reality: CSR is a growing investor concern. Demonstrating a commitment can attract more investment, improve stock performance and increase market value. Rather than viewing CSR as an expense, it’s more effective to think of it as an investment in your organization’s future.

    Related: 5 Steps to Creating Socially Conscious Projects That Matter

    Practical steps to develop and implement CSR strategy from the top

    Developing and implementing a CSR strategy isn’t just a matter of well-intentioned ideas. It requires a structured approach, starting from the very top of the organization:

    1. Align CSR with your company’s vision and values: Before diving into specific CSR initiatives, take a step back and look at your current values. Can you easily align your CSR strategy with your company’s vision, mission and values to create an authentic message?
    2. Conduct a stakeholder analysis: Identify and analyze the needs and expectations of your key stakeholders, including employees, customers, investors and the community. This will help you identify the CSR areas that are most relevant to your business and stakeholders.
    3. Set clear and measurable goals: Set clear, measurable goals for your CSR strategy, just like any other business initiative. Track progress, adjust and aim for targets like environmental impact, employee diversity or community contributions.
    4. Create a CSR team: Appoint a dedicated team or CSR officer to drive your CSR strategy. They’ll coordinate activities, monitor progress and maintain stakeholder dialogue — with the resources and authority to execute effectively.
    5. Communicate and engage: Keeping communication channels open is critical to ace CSR. Keep stakeholders informed about CSR goals, initiatives and how far you’ve come. Engage them by inviting employees to volunteer, consulting customers on sustainability and including investors in ethical business discussions.
    6. Evaluate and adjust: Assess and adjust CSR strategy by soliciting stakeholder feedback and gauging impact. Continuous improvement is key to a successful, long-term commitment.

    Guide your company into a CSR future

    As a leader, developing and maintaining a corporate social responsibility (CSR) strategy is crucial to propel your company’s success. The more you know about the ups and downs of CSR — including the challenges and opportunities — the better equipped you are to spearhead CSR initiatives.

    The goal is to make a sustainable, long-term CSR strategy that lives up to your stakeholders’ expectations and delivers measurable results, now and in the future. Don’t take any risks that could hinder your corporate success – instead, improve your initial strategy, evaluate, and remain flexible.

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    Tim Madden

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  • To Secure VC Funding, Your Pitch Deck Must Include These 5 Things | Entrepreneur

    To Secure VC Funding, Your Pitch Deck Must Include These 5 Things | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Venture capitalists are always on the lookout for the next big thing, and most of them review hundreds of decks monthly. Seasoned VCs need 30 seconds to decide whether the pitch deck is worthy and whether they should proceed and arrange a meeting with the founder.

    If you’re an entrepreneur looking for VC funding, you need to understand what investors are looking for in a company before they decide to invest. Here are five things that should be in your deck, without which Leta Capital won’t invest in your company.

    Related: Seeking Funding? Here Are Five Tips for Creating an Effective Pitch Deck

    1. A clear and compelling problem statement in conjunction with the timing

    First, you sell the problem, not the decision. The market need, not the product. VCs are looking for companies that solve real problems for real people. Your deck should clearly articulate the current state your company is changing, why it matters and then how you do it. The problem statement should be clear, concise and compelling. It should show that you’ve done your research and understand your target market. For example, Airbnb’s problem statement was: “People need affordable, safe, and unique accommodations when they travel.” This statement makes clear that Airbnb is solving a real problem in the travel industry. Moreover, people travel as much as ever before, so the timing was perfect.

    2. Realistic projections and a scalable model

    There is nothing worse than unrealistic and unprovable projections. If you claim that today you have $10k MRR and two customers, but next year you will make millions, and in 5 years, you will have an IPO, no one will believe you. You just don’t have enough data to convince people! Keep in mind that VCs want to invest in companies that can scale and generate significant returns on their investment. Your deck should show that you have a clear and scalable business model that can generate revenue and profit over time. That is why your traction, your business model and your projections should match.

    3. Full focus and commitment from the founders

    VCs want to invest in companies that have a strong team with a track record of success. But even more than that, VCs want to see the absolute commitment of the founders if we are talking about seed/series A stages when entrepreneurs need to work really hard and invest all the energy and time to boost their startup. Of course, the deck should show that you have a team with the skills and experience necessary to execute on your business plan. The red flag here is if you say that you need to raise money to hire a technical co-founder or lead engineer. In that case, VCs will think that you can’t attract and convince technical talent. You should figure out how to convince people to join you on your own — otherwise, how will you create a game-changing company?

    Related: Five Best Pitch Decks of All Time

    4. Competitive advantage and a POD among competitors

    No competition? No market. You should admit that if the problem exists, someone is already solving it somehow. Don’t belittle competitors, and don’t say they are stupid (especially corporations or startups with a proven track record or huge funding). However, VCs want to invest in companies that have a competitive advantage over their competitors.

    Your deck should show that you have a unique product or service that sets you apart from your competition. For example, Tesla disrupted the automotive industry by offering electric vehicles that were more environmentally friendly and had better performance than traditional gas-powered cars. Their competitive advantage and POD were their focus on innovation, sustainability and design.

    5. A clear path to exit

    VCs want to invest in companies that have a clear path to exit. Of course, investors don’t want to fund founders who haven’t built the company already want to sell it, but still, your deck should show that you have a plan for how investors can eventually make a return on their investment. This is an art, but nobody promised this would be easy!

    If you’re looking to secure VC funding, your deck needs to show that you have chosen the perfect timing to solve a real problem, that you have a scalable business model executed by a strong and dedicated team, you have a competitive advantage, and your company will give an investor the desired returns after 5-10 years. By including these five things in your deck, you can increase your chances of securing the funding you need to take your company to the next level.

    Related: How a VC Wants to Be Pitched

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    Alexander Chachava

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  • Smart Investors Evaluate the Founder More Than Their Pitch. Here’s How You Can Persuade Them You’re Investable. | Entrepreneur

    Smart Investors Evaluate the Founder More Than Their Pitch. Here’s How You Can Persuade Them You’re Investable. | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    I’ve invested in more than 25 world-changing, disruptive businesses in the last decade. These innovative companies have made women safer on the streets, children more protected online, people healthier and given us all more fun via some of the world’s most entertaining creators. Here’s the thing: While all the businesses had a completely new concept at their heart, I invested in the founder more than the idea.

    What I’ve learned as a serial entrepreneur and investor is that a business doesn’t need to have the best idea in order to be a worthwhile investment — they need an investable founder. Just think about the world’s most recognizable entrepreneurs today. Do you know Elon Musk for city guides, Jack Dorsey for a podcasting app or Richard Branson for a student magazine? Of course not. Behind every famous entrepreneurial idea is a pivot or evolution from a determined, skillful founder.

    Every investor has a healthy appreciation for the unreliability of ideas — so often at the mercy of external influences out of your control — versus the reliability of people. If you have successfully returned 10 times once or twice, you will have already proved yourself a worthy, reliable investee — but what if you haven’t? Highly experienced investors have developed an instinct and shorthand to find founders worth investing in.

    Many new entrepreneurs misunderstand this, so focus on the wrong things in crucial meetings to raise capital. In the “shark tank,” the founder might think it’s most important to draw attention towards bullet point three on slide five of their deck, but investors only looked at the headline (as they do with every slide) in order that they can instead peer into your soul. They’re more interested in getting a measure of you, not your idea. So what traits are they looking for in you?

    Related: Here’s What’s Brewing in the Minds of Startup Investors

    1. A superhuman determination to succeed

    People have different reasons for wanting or even needing to succeed. Many that I know like to have control over their lives, from making their own lot better to improving the future for millions (or billions) of people. Whatever is feeding your determination to succeed, make sure it’s a deep well.

    To win, entrepreneurs typically endure relentless decision-making, constant risk-taking and strings of failures. The successful ones are more right than wrong, have great ideas to manage risks and turn failures into opportunities.

    Determination must be a lifelong habit, too, as founders should have a strong sense of urgency (procrastination won’t fly) yet also have an unusual amount of patience (as their idea can take years to come to market or generate profit) combined with persistence. No wonder so many entrepreneurs run marathons and ultramarathons, as being a founder is the ultimate endurance test where resilience is the name of the game.

    2. Endless curiosity

    Being able to remain insatiably curious allows entrepreneurs to continuously seek new opportunities. So rather than just settling for what you think you know, show investors that you always ask challenging questions and explore different avenues.

    Incidentally, this curiosity can usefully extend to skepticism, especially about technology. On the one hand, you should be able to pull things apart from a quality point of view, and on the other hand, you should be able to really focus on what problem you are solving. In the words of my business partner, Chris, “Question everything.”

    For a killer combination, put curiosity together with a willingness to break the rules that you’re questioning. Asking, “Why has no one done this?” could identify a great opportunity to disruptively innovate.

    Related: Do You Have These 6 Personality Traits? You’re More Likely to Score Investors

    3. Commit to building a great team around you

    It’s true that, as an entrepreneur, at first you are the proverbial “chief cook and bottle washer,” you are doing every role in the business. To grow, you need a team, and to exit (which you will, one way or another) you need a team to run the business after you have moved on. So smart entrepreneurs show interest in building a great team around them.

    That’s not only co-founders but indeed the total management team that’s in (or going to be in) the company. Back to the curiosity point, founders who know what they don’t know are really valuable. More than that, ones who can put their ego to the side and see there are specialists — who are better designers or marketers or whatever — are gold.

    4. Focus on execution more than the idea

    There are new ideas to be discovered, and that’s one reason I’m optimistic about the future. We live in a dynamic world, so new ideas are always needed. That said, a great team can execute a mediocre idea, make it great and make a great company. So investors look for your ability to execute. They want to see an exceptionally talented product and technical leadership with domain expertise.

    So, if you’re building a product for a specific market or an ecosystem, ideally you have brilliant experience in that world. When billionaire investor Peter Thiel’s fund was investing in cleantech entrepreneurs, they quickly realized that the people wearing suits to pitch for capital were salesmen with no real technical expertise, so they instituted a rule to never invest in cleantech founders wearing suits.

    5. Old-school hard work

    We’ve all heard stories about entrepreneurs sleeping in the office at night. I’m not saying that’s optimal; however, you will work harder than you ever have in your life. Ever tried running a startup and running an investment raise at the same time? They’re both full-time jobs, but no one else can do it — it’s all on you. Beyond that, it’s true that the person who works more hours is almost always going to succeed or do better than the person who works fewer hours, and investors will be looking for a solid work ethic.

    Related: Beyond the Basics: 5 Surprising Qualities Investors Seek in a Winning Team

    6. Be a good storyteller

    Being able to articulate a bold vision and your mission, as well as your personal story that brings you to the investment pitch is incredibly helpful. It’s about amazing storytelling. When he took over Tesla, Elon Musk said fossil fuel will run out, so we need electric cars, but because they’re expensive, Tesla will make the most luxurious ones and rich car owners will fund the development of mass-market ones.

    That’s great storytelling that let investors see the opportunity, made rich car owners feel good and mass market owners feel excited about the advent of cheaper electric cars. When you’re captivating, and of course have great control of your commercial numbers, you’re going to be able to raise money.

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    David Newns

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  • Why Investors With an Entrepreneurial Past are Vital to Startup Success | Entrepreneur

    Why Investors With an Entrepreneurial Past are Vital to Startup Success | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    In this article, I would like to focus on one significant trait that some investors possess — an entrepreneurial background that enables them to establish strong connections with startups and better understand the ‘pains’ and challenges new founders face.

    Based on my personal experience as an entrepreneur I would like to highlight key aspects of communication with startups and why your entrepreneurial past makes you a little bit different from others.

    Related: 6 Steps to Finding the Right Investors for Your Business

    Speaking the same entrepreneurial language

    When communicating with founders, having an entrepreneurial background is extremely helpful. Founders can sense it, even from how questions are formulated, and they often highlight they have never been asked such questions before — questions are tailored with a deep understanding of the subject.

    And it’s not just about technology-related topics, but specifically business management, such as sales funnels, marketing strategies, product market fit and customer development. Besides managing businesses, having personal experience in creating acceleration programs and all the leading methodologies of Silicon Valley, which we have integrated into accelerators for many years to make them more effective, can enhance communication between investors and founders.

    With my experience of establishing 42 accelerators and collaborating with 1500 alumni startups, I have encountered familiar patterns, challenges and intricate situations when working with founders. We have found solutions together with startups in the past, and now I bring that experience to my current communication with founders.

    Entrepreneurs then — investors now

    Investors with entrepreneurial backgrounds bring valuable insights and expertise to the table. They have firsthand experience navigating the challenges and uncertainties of building a business, which allows them better to understand the struggles and aspirations of startup founders. Here are some great examples from the venture world.

    Mark Suster is a well-known voice in the investing world, having written extensively about investing in startups and building them on his website, Both Sides of the Table. He possesses the unique ability to discuss both sides of the table due to his experience as a two-time entrepreneur, having sold a company to a French firm and another to Salesforce. Currently, he serves as a partner at Upfront Ventures in Southern California (SoCal).

    Marc Andreesen, viewed as a pioneer in the tech space, founded Netscape, Opsware, Ning, and now his investment firm, Andreessen Horowitz. He’s an expert in tech trends and a frequent speaker in the angel investing space.

    Reid Hoffman is one of the most sought-after opinion makers in Silicon Valley. He is widely recognized for founding the largest business social network in the world, LinkedIn. Moreover, he has successfully translated his entrepreneurial acumen into profitable investments, with key stakes in companies like Facebook, Airbnb, and PayPal.

    Related: 5 Questions to Prepare for Ahead of Your Meeting With Investors

    Benefiting from an entrepreneurial past: from coaching to strategic planning

    An investor with entrepreneurial skills can provide valuable support and guidance to a startup in several ways. Here are some ways in which such an investor can help:

    • Fundraising strategy. The primary role of an investor is to provide funding to the startup and help them with fundraising strategy going forward. This financial support is crucial for the startup to develop its products or services, hire talented employees and scale its operations. With their entrepreneurial experience, the investor can assess the startup’s financial needs and give some strategic advice on funding allocation. Additionally, can guide the founder towards better fundraising strategy and preparation for investor meetings.
    • Strategic planning. An investor with entrepreneurial skills can help the startup create a solid business plan and set strategic goals. They can provide insights and expertise gained from their own entrepreneurial background, helping the startup identify potential challenges and opportunities. Together with the startup’s founders, they can develop a roadmap for growth and devise strategies to overcome possible challenges.
    • Shared perspective. I think this is one of the most important ways of communication, and here is why. An investor with an entrepreneurial background can better understand startups’ challenges and opportunities. They have likely experienced similar struggles, such as fundraising, market-entry, scaling and operational issues. This shared perspective helps establish rapport and empathy with startup founders, fostering better communication and mutual understanding.
    • Mentoring and coaching. Startups often appreciate investors who can go beyond providing capital and act as mentors or coaches. An investor with an entrepreneurial background is well-suited to fulfill this role. They can offer guidance on overcoming challenges, making critical business decisions and navigating the ups and downs of entrepreneurship. Their ability to draw upon personal experiences can be particularly impactful in helping startups succeed.

    I love seeing founders passionate about their startups, and our fund sometimes goes the extra mile to advise startups, even if they didn’t receive investments from us. It’s important to remember that when rejecting a startup, there is always the possibility that it may return in the future after making significant improvements in key metrics. Therefore, it is in our best interest to provide additional advice on what steps they need to take to attract funding.

    I receive requests from founders for personal consultations quite often. We were thinking about how to turn this demand into something beneficial for startups and society and came up with a very good solution. We decided to combine venture and charity by launching a project with the Podari.Life charity fund called “30 min/lunch with VC to save lives.”

    Relationship building

    Investors with an entrepreneurial past can leverage their extensive network and connections to open doors, make introductions and facilitate strategic partnerships for the startups they work with. This network can be instrumental in helping startups access resources, industry expertise and potential customers.

    For example, the CEO of one of our portfolio companies, PicUp, recently embarked on his first visit to the USA. He took the initiative to go on an extensive tour, visiting key states and connecting with potential partners and investors. I understand firsthand how challenging it can be to establish new connections in a foreign country, especially in the USA and particularly in Silicon Valley, which has no analogs in the world. With this in mind, we decided to assist by connecting the company with investors and key players in the Silicon Valley innovation ecosystem in advance.

    Related: The Things Successful Leaders Do and Don’t Do to Build Relationships

    What matters the most

    In summary, it is not solely the investors’ entrepreneurial experience that founders find appealing. Rather, their experience in different roles inside a business allows investors to have a wider view and help early founders avoid common mistakes while building the next big thing. After all, venture investment is a long-term relationship, and you want to build partner-like relationships with people you will most likely work with for the next 8-10 years until your exit.

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    Zamir Shukho

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  • How Founders Can Demonstrate their Founder-Market Fit to Investors | Entrepreneur

    How Founders Can Demonstrate their Founder-Market Fit to Investors | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    In the early stages, startups often lack impressive numbers to showcase their potential. That’s why investors primarily examine the co-founding team to assess how likely they are to build a thriving company.

    In simpler terms, investors are looking for something called founder-market fit when the founders’ skills, experience, and personal qualities align with what the market needs.

    But how can a founder determine if they have this so-called founder-market fit?

    A background check

    Deep industry expertise can indicate a strong match between the founders and their target market. The ability to execute ideas is vital for early-stage founders, and the more bulletproof they are in their domain, the higher the chance they’ll be able to do it.

    It’s also about knowing what to disrupt and how, because, at its core, a founder-market fit means that the person starting the company has personally experienced the problem they’re now trying to solve.

    In some cases, outsiders have disrupted industries they knew little about, but generally, founders have a much better chance of succeeding if they have a sense of how a specific market works. About 35% of startups fail because the founding team doesn’t know enough about the market and what customers actually need.

    The best way to know an entrepreneur has a founder-market fit is to look at their education, previous employment, and projects. How long have the founders been active in this industry? How well do they know its problems? How badly do they want to change the status quo?

    There are many examples of this: Airbnb’s founders hosted people in their apartments before building a marketplace for homestays; Slack began as an internal communication tool for a company owned by one of the founders — he knew what app his team needed.

    Health tech startup Theranos is a well-known case of the opposite when a lack of industry knowledge — among other things — led to a startup’s failure. Investors were swayed by the founder’s grand vision: they collectively invested $1.3 billion. Unfortunately, they overlooked the significance of the founder’s background.

    The founder, Elizabeth Holmes, promised to revolutionize health care while having only two semesters of chemical engineering classes at Stanford.

    Related: 6 Lessons Entrepreneurs Can Learn From the Fall of Theranos

    Synergy among co-founders

    When a founder presents me with a startup that heavily relies on sales but struggles to articulate their thoughts, it raises a red flag. In such situations, investors should carefully assess the other co-founders in the team, seeking a partner who brings the required expertise — in this example, in sales.

    Founder of Awesomic, a platform that matches web design talents with businesses, Roman Sevast has a background in software development. He takes full responsibility for Awesomic’s technical aspects and product development, while another founder, Stacy Pavlyshyna, is a former digital marketer who handles operations, communications and marketing.

    This serves as a good illustration of where both co-founders bring their domain expertise to the table, and their collaboration enables them to achieve a solid founder-market fit.

    A prominent global example of a synergistic partnership is the relationship between Steve Wozniak and Steve Jobs.

    Related: 5 Expert Tips on How to Choose a Co-Founder for Your New Business

    How to tell investors about founder-market fit

    To increase the likelihood of securing funding, early-stage founders should make sure they communicate their founder-market fit to investors. My several tips:

    • Share specific examples of the co-founders’ industry challenges and how they resolved them.
    • Emphasize accomplishments relevant to the target market, such as previous startup ventures, industry accolades, significant milestones, or partnerships.
    • Present a compelling narrative about a co-founder that showcases their in-depth industry knowledge. Instead of stating “5 years of IT experience,” highlight achievements by saying, “developed a product used by 300,000 clients”.
    • Demonstrate a scalable business model that aligns with market needs and show how exactly it aligns.

    Problem-solving experience

    This does not suggest that successful startups can only emerge from founders with prior experience. Quite the opposite, according to Sebastian Mallaby’s book “The Power Law,” groundbreaking ideas often originate from individuals who are outsiders to the industry.

    These outsiders, however, must possess certain character traits that enable them to achieve a founder-market fit. I’d like to highlight perseverance and curiosity.

    Outsiders should thoroughly study the market to understand their potential customers, launch effective marketing campaigns, and ultimately develop a product that people will find valuable. Curiosity serves as the driving force behind acquiring the necessary knowledge.

    Perseverance is crucial because the market landscape constantly changes, and founders continuously overcome new challenges. We seek to invest in founders who are prepared to adapt to evolving market conditions, meet customer demands and embrace emerging trends.

    Founders never know which particular problems they will face when starting a business. But if they previously solved problems in a chosen market or if they show they have grit, VCs take it as a good sign.

    Related: Beyond the Basics: 5 Surprising Qualities Investors Seek in a Winning Team

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    Vital Laptenok

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  • How to Evaluate (and Lower) the Interest Rate on Your Small Business Loan | Entrepreneur

    How to Evaluate (and Lower) the Interest Rate on Your Small Business Loan | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Small business financing can help your business get to the next level, and there are multiple factors you should consider when evaluating loan offers. While the interest rate doesn’t tell the whole story, it is a significant factor that can’t be overlooked.

    Your interest rate determines how much you’ll pay over the life of the loan, and a low rate leads to lower monthly payments and increased savings. Alternatively, an interest rate that’s too high can lead to financial instability.

    Whether you’re looking to take out a loan in the near future or later on in the year, it’s a good idea to understand how to evaluate potential interest rates and the steps you can take to lower your rate.

    Related: 8 Things Entrepreneurs Should Look for When Getting a Business Loan

    How to evaluate the interest rate on a small business loan

    Here are some factors you can use to evaluate interest rates:

    • The lender: Your interest rate will vary depending on the type of lender you work with. For example, banks and credit unions tend to offer the lowest interest rates on business loans. Nonbank lenders may offer slightly higher rates, but the application process is more streamlined, and you’ll receive the funds faster.

    • Fixed vs. variable rates: When you take out a business loan, you’ll receive either fixed or variable interest rates. A fixed-rate loan will stay the same over the life of the loan, while variable interest rates will change depending on current market conditions. In the beginning, a variable rate may be lower than a fixed interest rate, but this can quickly change if certain indexes — like the prime rate — go up or down.

    • The loan terms: It’s also important to consider the loan terms you’re offered. For example, let’s say you’re comparing a loan with three-year terms vs. 10-year terms. The 10-year loan terms may come with a slightly higher interest rate but lower monthly payments. In comparison, you’ll pay less interest overall on a three-year loan, but your monthly payments will be higher.

    • The financial health of your business: Finally, you need to consider the overall financial health of your business. Would the interest rate negatively impact your overall cash flow and ability to repay the loan? If the payments put a significant strain on your business finances, the loan may not be worth it.

    The interest isn’t the only factor that affects how much you’ll pay for the loan. Some lenders charge additional fees, like origination fees, application fees or closing costs. The fees will drive up the total cost of the loan, so you should talk to your lender and ask them to outline what fees you’ll have to pay.

    Related: 5 Ways to Avoid Paying Too Much on a Business Loan

    3 ways to lower your interest rate

    The rate you receive on a business loan depends on a variety of factors, including your business finances, credit score and the industry you’re operating within. If the rate you’re offered is higher than you’d like, here are some steps you can take to lower it.

    1. Improve your credit score:

    In addition to checking your business credit score, your lender may look at your personal credit score. If you have poor personal credit, this can affect the rates you receive on a business loan or make it hard for you to get approved.

    To improve your credit score, focus on lowering your credit utilization rate by paying down as much debt as possible. You should also pay your bills on time since late payments can stay on your credit report for up to seven years.

    2. Put down collateral:

    Your lender may be willing to give you a lower interest rate if you put down some type of collateral on the loan. Collateral lowers the risk to your lender since they can seize the collateral if you default on the loan.

    You can use cash or a tangible asset, like equipment or inventory, for collateral on a loan. However, you should make sure you’re confident about your ability to repay the loan before putting down collateral.

    3. Shop around:

    The rates offered by different lenders can vary widely, so the best way to save money on interest is by shopping around. Choose several different lenders, and get prequalified with each one, comparing the rates and terms offered by each.

    Of course, filling out multiple business loan applications can be a little tedious. Another option is to use a lending marketplace — you’ll apply once and receive offers from multiple lenders in one location.

    Related: How to Choose the Best Small Business Loan for Your Needs

    Next steps

    When it comes to small business loans, what’s considered a “good” interest rate will vary. An interest rate that is acceptable for one business owner may be way too high for someone else.

    It’s important to make a decision based on the financial needs of your business. Consider all your options, and work with a lender you trust so you can find the best financing options for your business.

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    Joseph Camberato

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  • 3 Secrets to Scaling Your Startup Effectively | Entrepreneur

    3 Secrets to Scaling Your Startup Effectively | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Having worked as a corporate executive, entrepreneur and now venture capitalist, I’m often asked about the secrets behind scaling a startup. Ideally, every startup starts with innovative ideas resulting in unique products or services that customers are willing to pay for. Founders typically kick off with their funds, later relying on family, friends or angel investors to grow.

    But what’s next? Let’s review some of the secrets I share with entrepreneurs to help them grow their startups effectively.

    1. Start with a strong foundation

    First of all, I recommend that startup founders test their ideas with potential customers. This could be through an interview, survey or by simply asking people what they think. Does it meet a critical need that customers have? Does it offer something unique that competitors do not? Are customers willing to pay for it?

    During this process, entrepreneurs must be flexible in hearing feedback and adjusting their offerings to address it. In my experience, most startups start with fundamentally good ideas, but they need to listen to customers and adjust the product, service or price structure along the way.

    Related: 4 Keys to Grow and Scale Your Startup

    2. Seek out diverse partners

    It’s challenging for startups to grow beyond their initial phase because it requires additional fundraising. Seeking investment forces entrepreneurs to fine-tune their business plans and articulate their startup’s value proposition. What is your unique selling proposition? How does your product or service set itself apart? How much are customers willing to pay? Making a compelling pitch deck is difficult, but ultimately it makes any entrepreneur improve their business plan.

    I believe that diversity is critical in startup fundraising. Different types of investors offer different perspectives. Traditional VCs are proven investors, but in challenging economic times – such as now – they reduce the amount they invest. They don’t always conduct thorough due diligence and sometimes invest based on trends rather than research. Remember Theranos? Some startups aren’t as promising as they sound, and some turn out to be complete frauds. Other examples of poor investments or outright scandals include Ozy Media, Outcome Health, WeWork and Uber.

    Corporate investors are smart for startups to consider. Corporations typically do not reduce investments during challenging macroeconomic times because they invest strategically. They want to make money, yet they also look for startups that align with their business and technology vision. Investing helps corporations become more innovative while offering startups rapid growth.

    Related: 10 Things You Must Do Before Connecting With Investors

    3. Working together results in success

    Corporate investors offer unique benefits to startups and doing so helps improve their results. Let’s look at how this happens.

    • Corporate Innovation: Startups make corporations more innovative. By investing, corporations find the most innovative ideas around the world without having to come up with them internally. It’s hard to drive internal innovation, but investing offers an effective alternative. Companies seek out the best entrepreneurs from around the globe, investing in their innovative ideas.
    • Technology and business alignment: Due to their strategic alignment, corporate investors and startups can work together to develop products together and sell them to the same customers. A startup’s technology drives the corporation’s product or service growth, and vice-versa. I typically find this results in faster revenue growth for both parties.
    • Unique advice: Corporate investors offer individual advice to startups since corporate managers and executives are sharing knowledge from their own first-hand experience. They have failed, succeeded, and discovered ways to grow. By offering this experience to the entrepreneurs they invest in, the startup founders get a shortcut to success.
    • Valuable networking: Another way that corporations accelerate startup growth is to leverage their networks and offer introductions to partners and customers. This is typically more efficient than startups developing their networks. A corporation’s contacts have already proven themselves, so startups can often start working with these contacts immediately.

    Related: How Startups and Investors Can Thrive in the Current Economic Environment

    I anticipate that corporate investors will play a bigger role in startup investment. Traditional VCs may come and go, but corporate investors are in it for long-term, strategic reasons. Corporations increasingly rely on the Venture Capital-as-a-Service model instead of developing their own investment organizations. This outsources investing to an experienced VC partner, allowing the corporation to invest strategically at whatever financial level they choose. Doing so helps increase startup investments worldwide, ultimately benefiting the world through innovation.

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    Anis Uzzaman

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