starting a business vs. investing in one
DESCRIPTION
Tips for Entrepreneurs and Angel InvestorsTRANSCRIPT
Starting a Businessvs.
Investing in One
Karen LinderNovember 18, 2014
Mind Your Own Business
(literally)Should I?
How?
Invest in OthersHow?
What Should I look for?
Q&A
Entrepreneur
Heartland Pathology
2001 – 2011
Tethon 3D
2014 – present
Investor
Entrepreneurs Are:
Gamblers
Malcontents
Perfectionists
Idealists
Are you satisfied to live
just as you are now, forever?
Where do you want to be
10 years from now?
Should You Start a
Business?
Assess
YourselfAbilities/Skills
Likes/Dislikes
Motives/Values
Why Did I Start a
Business?
Work/Life flexibility
Control
Max’d out at old job
2nd time
1st time
$$ potential
Make a Difference
Excuse #1:I’ll do it later…
“…like saving Sex for old age.”
Warren Buffett
When I know moreWhen I have more experience
When I have a financial cushion
Excuse #2: I don’t have time…
Excuse #3: I am paid well. How can I possibly
leave this terrible job?
"Being the richest man in the cemetery doesn't matter... saying we've done something wonderful.. that's what matters”Steve Jobs
Independence
Control
Life/Work
Responsibilities
Financial Insecurity
Reward
s:
Risks:
The ABCs of Entrepreneurship
Ability
Belief
Courage
How to Start?
Educate Yourself
Manage Your
Fear
Get HelpPrepare, don’t
rush
You Can’t Do
it Alone
Bookkeeping,
Payroll & Tax
Advisory Board
Legal
How?
Bootstrapping
No funding
No salary?
No office?
Sweat equity
gounfunded.com
Mrs. B (Rose Blumkin)
Doris Christopher
Lean Start-
Up
MVP
(Minimally
Viable
Product)
Small Business Admin
sba.gov
grants, loans
counseling, training
tools, resources
patents
tech transfer
connect community - faculty -
industry
But all I really need is some
start-up money!
$ Friends, Family & Fools
$$$ Angel Investors
$$$$$ Venture Capital
Angel Funding/Investing
gust.com, angel.co
Are There Angels Among
Us?
Accredited Investors =
Earned Income of $200K ($300K)
or
Net Worth $1M +
Information to Consider
1. One Line Description
2. Executive Summary
Tip: Well-Designed Company
Website and Pitch Deck
Info, cont…
3. Management Team
Tip: Founder > Idea
Info, cont…
4. The Problem
5. Solution to the Problem
Info, cont…
6. Target Market
7. Current Customers
8. Sales / Marketing Strategy
Production and Sales Timeline
Info, cont…
9. Business Model
10. Competitors
11. Competitive Advantage
12. Current Cap Table
If the investor
assumes all the
risk, they need to
be rewarded with a
higher amount of
equity.
Tip: Founder should have own $$ invested
Info, cont…
13. Business Plan
14. Financials Tip: History >
Projections
Info, cont…
15. The $ Ask
16. Company
Valuation
17. Use of Funds
18. Exit Plan
Acquisition?
IPO?
Share repurchase?
Tip: Invest in Likable
PeopleCoachable
Open to Suggestions
Communicate well
Thinks BIG
Will quit other Jobs
Honesty – doesn’t exaggerate
Professional / Ethical
1-2 Dead in 5 years = 0% return
4-7 limp along= 0% return
1-2 Profitable in 5 years, exit at 2x
return
1 Superstar exits at 20+x return
Reality for 10 Angel deals
Return on investment (ROI)
In Summary…
Do What You Love
Continue Learning
Take Risks
Make a Difference
Dream Big!
