10 Critical Points When Seeking Capital

By Kirk Taylor
http://sbenco.com/

Here are 10 critical points when seeking capital. The ideas are based off my experiences. They will ring true for you too, don't doubt them, don't dismiss them and you will find yourself in a considerably stronger negotiating position for whatever comes your way.

1. Investors rarely do what they say they will do. They get cold feet, they try to renegotiate, and they will risk destroying their previous investment for the opportunity to grab even a stronger position.
2. When an investor tells you that you are going to be good friends and they want to hang out, RUN. This is not a good situation. Great investors don't hang out with you, they are focused on making sure the investment performs. It is business and they don't want to mix business with pleasure. Too many strings attached with this type of person. Investors should be business partners, never friends.
3. When a Venture Capitalist or Institutional fund says they will commit to investing, the money always comes 3-6 months after they promised the money. There is always an excuse, a reason for delaying. You only secured the money when the check has been written and the money is in the bank.
4. Never spend investment money that has not been received. Too many times the investor is late or never comes through. You don't want to be stuck figuring out a backup strategy to keep your business from failing. Nothing is for sure, until it happened.
5. Never take an investor in your business if you are debt free, cash flow positive. Grow slower and deliberately. It is not worth giving up your ability to run your company as you wish. When you take on the new investor, you now have to run the company with the best interest of the shareholders, not yourself.
6. Always take an equity investor over debt. Equity does not require it to be paid back, debt does and it causes you to take longer to get to cash-flow Positive. Always be focused on making profit and having positive cash flow as fast as possible.
7. If you think taking money from a particular investor is a bad idea, even if it is just for a split second, don't! That investor will become your worst nightmare when you need them most. You do not need a spoiler on your team.
8. Owning 51% of the business only gives you control when your business has sufficient capital to operate or you are able to raise capital from alternate sources to ensure your business has sufficient capital. Your other investors and potentially creditors can force you to sell them equity in the business as whatever price they want. It does not matter how much of the business you own, the business and the board must act on behalf of the shareholders best interest. (hence, the hostile takeover)
9. When your investor says yes to purchasing stock, don't count on them coming through, but use the momentum to seek other investors until you have secured the investment amount you have been seeking.
10. Currently it is my belief that entrepreneurs should avoid starting businesses that require substantial investment capital from outside sources and/or businesses that will require future investment. The market is to volatile, the laws are unsettling, and businesses that are not self-sustaining are riskier than ever in current market conditions. You are better off reformulating your business plan to a business that require no or minimal capital to launch. You will be happy you did.

So now you have 10 Critical Points When Seeking Investors. Take this to heart and don't be the person that realizes that this was good advice after you got your butt kicked by an investor. Slow is always better, prove your concept, and your business will be much more likely to survive in any economy.

A Few Thoughts on Winter...

By Jim Rohn, The Seasons of Life

"Let winter find you planning for the arrival of spring, not contemplating the errors of commission and omission of last year.  Let winter find you with a joyful countenance and a happy heart... with a good word for all those around you; with confidence in the future, not apprehension; and finally, with gratitude for your achievements, adversities, and uncertainties of life, for each is a form of blessing which removes all limitations from the future possibilities of life.

Winter is a time for examining, pondering, and introspection.  It is a time for re-evaluating both purpose and procedure - for rediscovering an often misplace sense of purpose.  It is a time for finding new ways for solving old dilemmas, and for devising unique plans for contributing to others, less fortunate than ourselves.  It is a time for understanding and controlling anger, that frequent human emotion which causes us to pass judgment without fair deliberation.  It is a time to analyze our fairness and to overcome our tendency to hastily spew forth condemnation without full investigation, for such is the height of ignorance.

Winter is a time for being sincere with ourselves, about ourselves, when the tendency is to fool ourselves.  It is a time for developing skills that allow us to get along with imperfect people, for even a fool can get along with perfect people.  It is also a time for becoming wise enough to know what to say.  The wisdom that comes with the careful use of winter teaches us also that evolution is merely revolution at a slower pace, and that constant gradual change is the order of the universe.  Only those worthy human attributes of honesty, loyalty, love, and trust in God and in our fellow man are meant to remain constant.  Winter is a time for being grateful for our achievements, or for having endured our lack of achievement."

Ready to Move Beyond Mediocrity in 2010?

Goodbye, 2009! Hello, 2010! New year… new decade. New resolutions to be better, work harder and attain more. But how? If it were that easy to change our lives, wouldn’t we have done it already? How do we say farewell to mediocrity in the coming year and learn how to thrive?

Webster’s defines mediocrity as “moderate or low quality, value, ability, or performance.” Ugh.

I don’t know about the rest of you, but I intend to make 2010 a great year. In order to fulfill that promise to myself, it is necessary to put some concrete plans in place today to facilitate success in the future. We all possess internal tools that can help take us beyond blasé and make our lives an affront to mediocrity.

There are three key elements to keep in mind when embarking on any new life trend:

1. Attitude
You can’t excel if you don’t believe you can, so you have to find creative ways to stay encouraged and inspired.

2. Action
Thinking happy thoughts and setting aggressive intentions isn’t ever enough. You have to change your behaviors.

3. Accountability
Follow through and commitment will help you transform a short term resolution into a new lifelong habit.

Six months… are you ready to kick your life up to the next level? In this upcoming series we’ll explore:

Courage. We all tend to be a little timid and fearful about change – no matter how passionately we give lip service to our dreams. Courage gives you the strength to take risks and move beyond historically dependable behaviors and conventional approaches to discover a whole vigorous new you underneath.

Fresh Perspective. Before you tackle any great task, you have to make peace with the possibility of both triumph or failure. You are neither as fabulous as your latest achievement nor as pathetic as your most recent defeat. Get ruthless about stretching your intellect and finding the path of least resistance to your destiny.

Inaction. I know, I know… I just talked about action. But all action is not physical. There is the crucial element of quiet reflection that also bears remembering. As the yin to action’s yang, give yourself space to relax, quit trying harder and experience a personal revolution. Slow down and shift gears so that you can hit your maximum velocity.

Uncommon sense. Logic is important. But so are intuition and elegant solutions that come to us in daydreams. While you don’t want to blithely leap off a cliff to your doom, sometimes we have to take a step of faith before the true path becomes clear before us. Your heart always knows the way forward before your head figures it out, so trust your gut and stand back as amazing things unfold in your world.

Suspended disbelief. Disbelief is the enemy of innovation and progress. If you truly want to manifest greatness, you must believe that success is possible - that you have all the tools you need to reach your goal – and, most importantly, that you have infinite worth and truly deserve the fulfillment of all your secret hopes and desires.

Encouragement. Any long-term life shift that you sustain is powered by a vivid picture of the dazzling impact you can make on the world, and that vision breeds endurance to drive relentlessly toward your target. The gift of encouragement can certainly come from others, but you must find within yourself the strength and fortitude to weather storms and to ignore the disapproval of others. A few trusted supporters combined with your own confidence will give you the power to build a firm foundation with the bricks that are thrown at you.

Right now, in this moment, you are capable of exponential improvement in your performance. You truly do have the ability to reach new highs, shatter old records and attain amazing achievements. You don’t have to be content with the status quo or improve things incrementally. Let’s take the next six months and move beyond mediocrity together!

If I Were Tiger's Agent

I've been asked frequently over the past week, "What would you do if you were advising Tiger Woods? How would you fix this?"

Well, you can't really 'fix' the PR nightmare that has become Tiger Woods life, but if I were trying to mitigate the damage and get him back on track, these would be my simple suggestions:

1. As we say in the South - 'Fess up'. Tiger has yet to really acknowledge and apologize for his atrocious behavior. I know there was that vague, hokey statement about 'trangressions', but PLEASE! Apparently he's had sexual relationships with every woman in his path who is not legally a relative, so he seriously needs to come out with a heart-felt apology that addresses the depth of this breach of trust. Hiding might seem safe, but right now he needs to look his fans in the eye and talk straight.

(For those of you who are sitting there thinking that Tiger should have privacy and shouldn't have to answer to the adoring public who has financed his billion dollar lifestyle, I say that celebrities choose their career and happily earn their cash off of public adoration. Granted adoration by millions is fun, and this situation is anything but; however, you can't just turn it all off when something bad happens. If you don't like the public watching your every move go be a fireman or accountant!)

2. Align the public persona with the real Tiger. These issues only arise when the public is led to believe one thing about a celebrity and then sees behavior that conflicts with that carefully crafted image. Tiger has been spouting for years about 'family' and 'loyalty' and a 'quiet, normal life'. Public anger is not about affairs with multiple women (most celeb males have those!). The anger is about hypocrisy. I respect George Clooney. He doesn't want to have a wife and children and he's been very candid about enjoying the company of beautiful ladies, so he simply has not gotten married. What a novel thought? His image is aligned with his true identity and the public adores him because of it. As an added bonus, he doesn't have to skulk around and pay people off and hide his girlfriends.

As Mike Taibbi with NBC put it, "Whatever faith I had in Tiger Woods is gone. Not because he betrayed his wife: because he betrayed me. I bought his brand. By being one of millions of dedicated fans, in a way, I helped him earn those billion dollars. And I got conned. Turns out he’s just a great golfer but a jerk like so many other men can be. Jeez!"

3. No encores. Going forward, Tiger needs to make sure that this ugly episode does not repeat itself. The public will forgive almost anything, but you can't push the envelope and become a repeat offender - there are limits. Tiger needs to get his game back on the course and get his family life in order. And don't get me wrong, by getting his family life in shape I don't mean saving a fake marriage at all costs by bribing his wife or trying to maintain a stronger facade. I mean taking stock of his life and setting a new course that accurately reflects the man he is. Being fair to Elin, taking care of his children (whether they are in his home or not) and bagging some tournaments.

So there you have it... my 3 steps to revitalize Tiger Wood's brand.

The Definition of Success...

I'll let this stand on it's own.

"To laugh much; to win respect of intelligent persons and the affections of children; to earn the approbation of honest critics and endure the betrayal of false friends; to appreciate beauty; to find the best in others; to give one’s self; to leave the world a little better, whether by a healthy child, a garden patch, or a redeemed social condition; to have played and laughed with enthusiasm, and sung with exultation; to know even one life has breathed easier because you have lived–this is to have succeeded." Ralph Waldo Emerson

Take Your Company Public: Hire A Turnaround Consultant First and Make Your Capital Raise Simple!

By James Scott

We do a lot of turnarounds and often help companies prepare for IPO's, capital bids and buyouts. This really is a critical issue. Know what investors are looking for and get the help you need to whip your company into shape BEFORE seeking funding.

Most companies who are on the venture capital trail are not set up properly to attract investors. When an investor looks at your business plan and private placement memorandum they are looking for certain things. Of course funding sources look for the obvious, a solid business model, positive cash flow, industry genre with solid future growth, recession proof business (if there even is such a thing) and minimal debt.

Countless companies are turned down for funding because they lack the basics such as: an advisory board, board of directors, solid executive staff with a well groomed pedigree, reasonable share price, business plan and PPM that spell out the risks for the investor and an original marketing strategy that covers all the angles. These are just a few of the most common mistakes that companies make out of naivety and by not taking the time to hire an expert to properly structure them to make the entity appeal to investors.

Seasoned expansion and turn-around consultants can step into a company and immediately zone in on the issues that will hinder a client's investment magnetism. Often times it only takes 2 to 3 weeks to completely reorganize a company to make it stand out like a beacon in the turbulent finance industry. If you are seriously considering the idea of raising capital with a private placement memorandum, traditional institutional loans, venture capital or a public offering don't be penny wise and dollar foolish.

Spend some money and hire a consultant who is completely submerged in the finance industry to take control of the elements of your corporation that are seen as 'black eyes' to investors so that you can achieve the capital you're seeking.

The reality is, raising capital for your company is easy and straight forward if you've taken the time to examine your business objectively and sought out the expert analysis of an industry expert consultant who will run your company through a formula and make the necessary changes to increase your ability to raise capital.

Details Matter... 'Thaw the Chicken'

Sometimes you have the big picture, you have the equipment, you know what you're trying to accomplish, and you know how to technically get a task done - but something is missing... some tiny seemingly insignificant piece of information thwarts you in your attempt to accomplish an aim. Details really do matter!  Enjoy this funny story and think about whether there are details that may be holding you back or making a mess of your attempts to reach a goal.

Back in the mid-1990's scientists at NASA developed a gun for the purpose of launching dead chickens. Why, you might ask?  By hurling a chicken at the windshield of a jet or the space shuttle at that vehicle's maximum traveling velocity, the space agency could simulate the frequent incidents of collisions with birds, and therefore determine if the windshields were strong enough to withstand high-speed airborne fowl strikes.

British engineers, upon hearing of the gun, were eager to test it on the windshields of their new high-speed trains. However, upon firing the gun, the engineers watched in horror as the chicken corpse shattered the windshield, smashed the control console, broke the engineer's backrest, and embedded itself in the cabin wall.

Shocked and puzzled, the engineers sent NASA the results of the experiment, along with the designs of the windshield, and begged the US scientists for suggestions and assistance in getting their obviously sub-standard windshields up to snuff.

NASA sent back a brief response: "Thaw the chicken."

Do you have 'unthawed chickens' in your world right now?  Little details that are mucking up the waters and shattering your experiments?  Minor points of logic that you may be missing?

Think about it.