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In times of crisis people always look for inspirational leaders. What makes for inspiration is subjective, but there is one common element when speaking about leaders who inspire: they have a strong leadership presence.
By presence we mean "earned authority." That is, people follow your leadership because you are a proven quantity, whose credibility rests on your having gotten things done. Every leader must aspire to demonstrate presence in order to inspire; this is a theme explored in a new book, 12 Steps to Power Presence: How Leaders Assert their Authority to Lead.
With the market for early-stage capital beginning to bounce back, I'm once again fielding calls from entrepreneurs wanting to know how much of their company to give away to investors to raise the money they need to launch their businesses or take them to the next level.
Unfortunately, there's no easy answer to this question. An established business with sales, profits and cash flow may sell for five to 10 times earnings before interest, taxes, depreciation and amortization. But it's a lot harder to put a price tag on an early-stage venture that consists of a business plan, a web site and the founder's hopes and dreams. As a result, negotiations between start-ups and prospective investors often turn into angry arm-wrestling matches that end with both sides walking away empty-handed.
April 23 (Bloomberg) -- Lobbyists for startup investors say they are close to a deal with Senate staff and state regulators to remove curbs on angel investing from the Senate’s financial reform bill.
The possible compromise would require angel investors, who buy stakes in startups in private offerings, to have a net worth of $1 million, instead of $2.3 million as proposed by the Senate bill, said Marianne Hudson, executive director of the Angel Capital Association in Overland Park, Kansas. It would also scale back plans to let states regulate angel deals, she said.
“We’re close to amendments that are good for entrepreneurs,” said Hudson.
Don’t get Randal Charlton wrong. The executive director at the TechTown business incubator in Detroit is thankful for a recent announcement of $5 million coming his way to help graduates of his FastTrac business training program launch their companies. But, he says, look at it this way: The money, granted by the New Economy Initiative, a Detroit-area philanthropic partnership, is not being thrown at comfortable entrepreneurs. This is, essentially, aid to the unemployed. And, as such, $5 million barely scratches the surface.
Many of the entrepreneurs to be helped by the First Step Fund, the entity created by NEI’s $5 million investment, are not launching startups because it seems like a promising thing to do. They have nowhere else to go, Charlton says. Their former jobs in the auto industry are gone, never to return. Their choices are to leave the state or try to create their own jobs in Michigan.
So far this year both the number and size of deals by venture capitalists are down over the final quarter of 2009.
A total of 681 deals for $4.7 billion were completed by VCs in the first quarter of 2010, according to a MoneyTree Report released by the National Venture Capital Association and PricewaterhouseCoopers. That dollar amount is down about 10 percent over Q4 2009, but up nearly 40 percent over the same period last year.
Yahoo! and Egypt-based NGO Nahdet El Mahrousa have launched a campaign called ‘Social Innovation Starts with YOU' that hopes to inspire and motivate young Egyptians to be social entrepreneurs.
The campaign is in line with the U.S. Presidential Summit on Entrepreneurship that will take place on April 26 - 27, 2010 in Washington D.C., where Yahoo! co-founder Jerry Yang will deliver a keynote speech on how the Internet can positively transform lives, societies, and economies in Arab communities.
Candace Fleming’s résumé boasts a double major in industrial engineering and English from Stanford, an M.B.A. from Harvard, a management position at Hewlett-Packard and experience as president of a small software company.
But when she was raising money for Crimson Hexagon, a start-up company she co-founded in 2007, she recalls one venture capitalist telling her that it didn’t matter that she didn’t have business cards, because all they would say was “Mom.”
Another potential backer, reports Claire Cain Miller in The New York Times, invited her for a weekend yachting excursion by showing her a picture of himself on the boat — without clothes. When a third financier discovered that her husband was also a biking enthusiast, she says, he spent more time asking if riding affected her husband’s reproductive capabilities than he did focusing on her business plan. Ultimately, none of the 30 venture firms she pitched financed her company. She finally raised $1.8 million in March 2008 from angel investors including Golden Seeds, a fund that emphasizes investing in start-ups led by women.
Based on 300,000 companies, most with annual sales under $10 million. One takeaway: Specialization pays off.
Spiking sales might make for good cocktail conversation, but if you don't turn a profit--and keep turning one--you won't be in business very long. With the help of Sageworks, a Raleigh, N.C.-based accounting consultancy and private-company data provider, Forbes assembled a list of the 20 most profitable businesses, on a pretax basis, that aspiring entrepreneurs might launch. At No. 1: offices of Certified Public Accountants, with an average pretax margin of 17.1%. Wired communication carriers (transmission-line operators and the like), which clock an average 10.1% margin, brought up the rear.
Two years ago I had an idea for a website. I decided to leave a well paying job, invest all of the money I made post college, and began to start the terrifying journey of building a company. Today, I want to share the ten most powerful things I learned about turning that idea into a business at a time when the economy was at its worst, and capital was scarce. Many of the tips I'm sharing with you were passed down from others who were kind enough to share their experiences and insight with me.
Not so fast, Martha Stewart.
OK, you're special. You are talented and one of the best at what you do. But that doesn't mean that you're equipped to run your own business--even one within a field or industry you've been working in or following for years.
To wit: 627,200 new businesses opened in the U.S. in 2008--the same year 595,600 businesses shuttered and 43,546 filed for bankruptcy, according to the U.S. Small Business Administration (SBA). Likewise, 30% of small businesses fail within the first two years and half close shop within five years, according to the SBA.
The fact of the matter is that far too many people launch their own companies for all the wrong reasons and without the tools it takes to succeed. Before handing in your notice and signing a lease on an office, it's imperative you take a hard look at yourself in the salaried eye and ask yourself a few critical questions that could mean the difference between a fulfilling life as your own boss and speed-dialing a bankruptcy lawyer.
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