Opinions expressed by Entrepreneur contributors are their own.
It is well-known that women- and minority-owned businesses are terribly far behind in accessing capital to fund their startups and small businesses. According to the American Express State of Women-Owned Businesses, women own 49 percent of the businesses in the U.S., but account for less than 10 percent of the country’s earned revenue. That’s a staggering, painfully frightening statistic as we move well into the twenty-first century. Some point the finger at the male and his privilege; others blame financial institutions. Many equate the lack of social capital possessed by women and minorities with less early-stage friends and family funding. That funding can provide a platform to build a business and provide opportunities for a healthier balance sheet when seeking additional funding. It could be all or none of these reasons. So, let’s start focusing on solutions. If 49 percent of the businesses in the U.S. accessed 49 percent of the capital available, then it stands to reason that 100 percent of our businesses would thrive. Pollyanna-ish thinking? Maybe, but it takes money to make money. The more successful all of our businesses are, the better individual finances and the economic development in our cities, which of course impacts all else for the positive.
Where is the money, anyway?
The earliest stage of funding is, of course, self-financing. Not everyone has a nest egg ready to hatch the funds needed to invest in a new venture. But most owners of nascent businesses do have a circle of (loosely defined) friends and family. Make a list of everyone who might consider providing some of those golden friends and family early-stage dollars. Then, as a business owner, approach these people the same way you would approach a financial institution. Have a basic business plan, financial projections and a log of what you have invested in the business thus far — both time and money. Know what you can afford to give them in return — interest on the money they invest in you or some type of payment in kind of product or services. The key, though, is that no matter who the funder is — parent, sibling, cousin, neighbor — this is a legitimate business transaction. Treat it as such and show the individual the respect you would show to a banker or angel investor. Be prepared, honest and realistic in your projections of time and return. Put everything in writing and have all parties sign documentation. Have a disclaimer for what happens if your business does not see the success you plan for. Be sure all parties fully understand the risks involved. Don’t make promises that you may not be able to keep. A classic opportunity to undersell and overdeliver. Give realistic projections but err on the side of more conservative estimates. When you exceed your projections, your friends and family will be thrilled. But if you promise a lot more and don’t deliver, you lose credibility.
The next stage is debt-backed funding — anything that requires a repayment with interest. This can take many forms — microloans, credit unions, traditional banks, Small Business Administration (SBA) loans or home equity lines of credit (HELOCs). To be successful in this route, you must start cultivating these lender relationships well in advance of submitting a loan application. Start asking other business owners to introduce you to their lenders. Do some research and see what lending institutions in your area have a history of cultivating relationships and doing business with women and minority-owned businesses. Find local support organizations that exist to support the underrepresented founder and ask them to help you network with those lenders. Set up introductory meetings with lenders, even in the very early stages of your business. I am an optimist, and I truly believe that lending institutions want to have a mixed portfolio of business owners as clients — they just don’t know them yet. So, be bold and get to know them first. Once you have cultivated relationships with a few bankers, share your business plan and ask what it will take for you to gain approval for a loan. Lenders will want to see a track record of revenue and proof you can pay the loan back with interest in a set term. You might be pleasantly surprised at how quickly they can help you meet their lending requirements. Along the way lenders will want to share in your success. Lenders are human and desire to help others, especially those who ask for help.
Related: Minority-Owned Small Businesses Aren’t Getting Stimulus Loans …
When it gets even more challenging for women and minorities
The smallest percentage of funding for women and minorities is from the angel and venture funding arenas. These are individual investors who have pooled significant sums of money to invest as a group into qualified businesses. Each investor hopes for a significant payoff down the road, making the betting process intense. That is the bad news. The good news is that you may not need these types of funding. Venture and angel funders are looking for quickly scalable businesses, for the most part. A business where a large (think $250,000 to multi-millions) amount of funding will catapult the business into the high growth category in a short period of time. What is great for the founder is the fast cash. What is not so great is nothing comes without a price. Investors will want a significant amount of cash or control, or in some cases, both. A founder must accept that the investors might even come in and replace you as the leader of the organization. If this is the cash route that is ultimately right for your business, do your homework. Hire a good attorney and a certified public accountant (CPA) to protect you during the negotiation process. Also, know that the percentage of venture funds is even lower for women; only two percent of venture capital is invested in female-founded companies. There is hope on the horizon with more women and minorities becoming investors themselves but keep your options open. Seek out venture capital or angel organizations that vet their applicants blindly. Connetic Ventures in Covington, Kentucky is a great example. Their proprietary product, Wendel, vets applications blindly. Over 50 percent of the applications that make it through their filtering process are women and minorities. Problem solved, right? If the screening process does not indicate race, gender, age, socioeconomics or disabilities, only the idea or concept itself is being vetted. That is terrific news for all entrepreneurs and supports the notion that a diverse team is a winning team.
Related: 3 Ways to Support Minority-Owned Businesses
Steps to ensure funding
- Create a solid business plan and start showing progress on that plan.
- Build a wide and deep network of people who can help you financially.
- Create an advisory board of seasoned and trusted professionals.
- Maintain excellent and thorough financial records.
- Check your credit score and improve it as much as possible.
- Effectively market your business in your community.
- Write a friends and family funding plan and start making the asks.
- Begin building relationships with bankers, microloan organizations and local small business and entrepreneurial support entities. Research angel and venture capital funders who have businesses in your industry as part of their portfolio.
What can the funders do to solve this problem?
Asking funders to solve this problem is where it gets more challenging. Federal banking regulations have very strict truth in lending guidelines. They can’t just make it easier for women and minority groups to receive loans. We all still have to qualify and have the means to repay the loans. However, lending organizations can create more incentives and opportunities around building relationships with women and minorities as potential lending customers. Many banks have women’s networks, programs for minority-owned businesses and are hiring more people to help cultivate those relationships. A strategic focus on diversity in their consumer base is a critical piece of the overall solution that the lenders can bring to the table. The solution to the funding crisis faced by women and minority-owned businesses is a two-way street. Those with the money, bankers and other lenders, need to seek out and cultivate relationships; entrepreneurs in need of funding must be prepared and confident. Getting both sides of the equation working together will create an environment where all business owners can equally access funding. That funding will help in creating more sustainable businesses, offering more jobs to the community and growing our economy. A win-win-win outcome for all.
Related: This VC Went From Representing Huge Artists to Funding Women …
Opinions expressed by Entrepreneur contributors are their own.
Do you want to be the Queen or do you want to be the Bank? In other words, as a business owner, do you want to have control or do you want cash? This is the question that all entrepreneurs must answer at some point. Running a business is a series of decisions, small and large, with each decision varying in its overall impact. Being an entrepreneur comes with its own set of unique decisions. And being a woman entrepreneur further complicates the choices that you make, as your decisions tend to receive more scrutiny.
I am now in the heat of running my third startup. My journey is like others’; the first startup was a disaster. The product was interesting, but without relevant experience, I had no credibility. I spent all of the money, learned a ton about what not to do and swore I would never start another business.
The next time around, I started a company with a mission that was squarely in my wheelhouse. Be Bold Now is a non-profit dedicated to promoting gender parity by showcasing women’s stories and hosting an International Women’s Day event. This time, we were wildly successful with rapid attendance and revenue growth. But five years into this venture, and just four days ahead of our annual event, the first Covid-19 death was reported in our home state of Washington. Needless to say, our business came to a crashing halt. By spring of 2020, it was clear that we needed to pivot.
Related: What You Gain With a Growth Team
I started reading the news about the devastating effect that the pandemic was having on women and the immediate loss of economic ground. This, coupled with the increase in online shopping, led me to my next startup: TheWMarketplace. TheWMarketplace is an ecommerce marketplace for women-owned businesses on a mission to be the economic engine for women. I took the lessons I learned from both previous ventures and the passion I have around creating gender parity and started a mission-driven for-profit business.
Growth raises the important question: Queen or Bank?
My cofounder and I launched TheWMarketplace to shoppers in September 2020, and we now have over 500 brands offering more than 3,000 products and services. It was clear early on that we would need to raise money to support the growth that we were experiencing. We opened a pre-seed round of funding five months after launch and closed it with one investor in three days. The Queen(s) and the Bank were thrilled!
We put the money into enhancing our business on Shopify, hiring a few similarly mission-driven staff at greatly reduced rates and building awareness for a viable shopping alternative to the leading online retailer. We created a place where people could support women-owned businesses and the communities they care about.
Our revenue has grown over 580% and we have big plans for the future. We are now faced with the original question: Queen or Bank?
Queen means that we own the majority share of the business. We make the decisions without having to consult anyone else and can grow at the rate that our revenue enables us to: presumably slow and steady. As founders, we often are advised to bootstrap as long as possible in order to retain control of the business. And as everyone knows, “Early money is expensive.”
Bank means that we take on other equity partners in exchange for money to accelerate our growth. We may need to share the decision-making about how the business grows, but would also have the cash infusion to accelerate our growth and meet the market opportunity. Being a mission-driven business potentially makes shifting the decision-making to a larger group more complicated. What if our investors don’t align with or want to dilute the mission in pursuit of revenue?
With all of these considerations in mind, what it comes down to for us is: Do we own a large piece of a small business? Or do we own a small piece of a big business?
Related: You Cannot Cut Your Way to Growth
You can’t change the world if you’re satisfied with slow growth
The majority of the roughly 14 million women-owned business in the U.S. today are considered small. They employ fewer than 3 people and typically are considered “lifestyle” businesses. They are either self-funded or operate with small loans or grants. They grow slowly and generally stay in the small-business category.
On the other end of the size spectrum, in 2021, a record-breaking 1,057 U.S.-based companies raised capital through Initial Public Offerings (IPO). Of those 1,057, a grand total of four companies (Bumble, NextDoor, 23andMe and Rent the Runway) were founded by women. And of the thousands of companies that have gone public over the years, there only have been 31 that were founded by women.
The mission of my company is to be the economic engine for women. You cannot change the world and fuel growth for women by planning to be small or being satisfied with slow growth. So my answer to the question of Queen or Bank is clear: Bank. It is critical for us to have capital to grow this business and the 500-plus women-owned businesses that are using our platform. It simply is our mission. But in choosing Bank, we are also prioritizing the right fit in an equity partner. Anyone who shares in our decisions will also have to be fully committed to our vision and mission.
Related: Balance Growth vs. Profitability With These 4 Tips
We know that when we align our vision with partners who can fuel the economic engine for women, we will be on our way to becoming the 32nd women-owned business to IPO. When we ring that bell on the NYSE, we will be Queen for a day — but we would rather be the Bank for life.
Franchises come in all shapes, sizes and levels of financial commitment. Finding a franchise ownership opportunity that’s just right for you is the most important factor — followed closely by paying for it. How will you secure the necessary funds to cover the initial franchise fee, startup costs and the ensuing royalty payments? Thankfully, there is more than one way to get funding for the franchise of your dreams so that you can finally become your own boss.
anilakkus | Getty Images To provide you with an array of funding choices, here are five ways to finance a franchise.
1. Ask for a 7(a) with the SBA
The U.S. Small Business Administration offers one of the most popular funding options for purchasing a franchise: the SBA 7(a). You should understand that the SBA doesn’t generate the loan itself, rather they partner with banks and other lending institutions to guarantee one. SBA 7(a) loans can go up to $5 million and repayment terms are typically 10 years. If you intend to go this route, make sure you explore an SBA lender that understands the industry of your franchise. The application process for SBA 7(a) loans is notoriously in-depth, so make sure you have all your paperwork in good order.
Related: Starting a Franchise But Need Financing? Here’s What to Do.
2. Your personal bank
Banks and credit unions are always open to loan applications for franchisees and hopefully you’re on a first-name basis at your lending institution. Depending on your banking (and repayment) history, you might be able to receive favorable terms on the amount and interest rate. Banks tend to like the nature of franchises, especially noting their proven business models. To give yourself the best shot, do your homework. Have your business plan and pro forma ready to roll, then see where the chips fall.
3. Your franchisor
Many franchises offer their own financing options when welcoming a new member to the family. If you decide to go this route, at least you know how well your lender understands the business model and its income-producing capability. If nothing else, the loan amount should be quite accurate. If your particular franchise does offer its own financing, you’ll read about it in the franchise disclosure document (FDD). Skip ahead to Item 10 to find out.
Related: Franchisors Offer Their Own Financing Programs
4. Alternative lenders
Banks and credit unions aren’t the only game in town when it comes to securing the funding necessary to buy the franchise of your dreams. There are quite a few alternative lending options for you to consider, with some that specialize in franchise funding. Guidant Financial and ApplePie Capital are two examples that work with a lot of franchisors. Get your credit score up to date and find out what they’re offering. Then you can compare their terms with your own alternative lenders.
5. ROBS
Seems a bit weird that a financing option would go by the acronym of ROBS, but this method of funding is becoming an increasingly popular option for buying a franchise. It stands for Rollovers for Business Start-Ups and it’s a plan where you can withdraw money from your personal 401K (or similar tax-advantaged retirement account) to fund the purchase of a franchise or small business. Under normal circumstances, a pre-retirement withdrawal from your 401K would cost you a pretty penny in penalties, but the beauty of the ROBS option is that you won’t in this instance. Borrowing from your 401K is always a risk, so it’s best to seek the counsel of a professional CPA or your financial planner before pulling the trigger on this option.
Opinions expressed by Entrepreneur contributors are their own.
The first half of 2021 witnessed a mega-flow of investments by U.S. venture capitalists, breaking previous records. Experts identified that the total amount of funds generated in the first six months alone was up to $288 billion, reaching an all-time high.
It’s safe to say that VCs are pouring more cash than ever into promising startups, and the ecommerce industry is no exception. Raising funds online is a trend that is here to stay for 2022. Here are some insights that our company (3DLOOK) learned along the way. These lessons can apply to any business that’s looking to fundraise in today’s competitive, digitally-savvy market.
Leveraging the benefits of online communication
The pandemic has virtualized all of the fundraising processes, and this is not necessarily a bad thing. When fundraising, you typically have to spend a great deal of time planning and setting up important meetings – continuously traveling back and forth to meet and greet investors. As the lockdown shifted all communications to virtual mediums, companies can take advantage of the flexibility and opportunity to meet investors faster since there is no traveling to meetings involved.
This saves valuable time for both the company and the VCs. Leverage your outreach strategy to attract investors from anywhere in the world via virtual platforms. In addition, this will help cut costs and cater to the potential partners without physically being there in person. The company can often times close important deals completely virtually, with the exception of perhaps one meeting with the lead investor, before signing the term sheet.
Related: You Can’t Get VC Funding for Your Startup. Now, What?
Preparing for the round in advance
Series A is different from earlier stages since this is where the complete focus is on the company. In earlier stages, investors primarily focus on the team and the founders behind the company. They evaluate whether the founders have a broad vision and if they can indeed successfully implement their plans.
However, Series A is different as it focuses more holistically on the company. You must be ready to answer any and all questions about the company’s present and future plans, its milestones, goals, hiring projection, client portfolios, etc.
Before initiating the fundraising process, we at 3DLOOK created a multifaceted team from marketing, finance and production. We spent countless hours brainstorming on the pitch deck and ran various iterations every week. We also consulted with our advisors and early investors, asking them to review the pre-final version of the deck. Unsurprisingly, we reviewed and updated our initial deck up to 40 times.
For example, we focused on the following factors:
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Our growth rate: We emphasized this achievement in our decks and communication.
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Two five-year contracts with large enterprise clients.
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Long-term, loyal clients who were willing to share positive feedback.
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Our successful case studies with some of our earliest clients.
It is important to regroup and meticulously evaluate the feedback that is received from advisors and consult VCs on the steps that can be taken to improve proposals.
It’s all about gathering the right materials beforehand and making sure you’re prepared to answer any questions that come your way. Solid preparation is the key to successful fundraising. For example, you will need the following:
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All key information the VCs require, such as the deck, cap table pro forma financial model, kept in the data room.
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All documentation pertaining to your teams (such as CVs, employment agreements, consulting agreements, stock options, grants, etc.).
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Relevant and up to date financial data.
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Additional information such as client contracts, case studies, etc.
You should develop a clever strategy to reach out to the investors. In our case, we categorized a list of primary VCs we wanted to approach based on our level of connection with them. Here’s what our categories looked like:
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The VCs in category A are companies that we have already met and have frequently been in touch with for years.
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Category B VCs involve people we’ve met or had a call with once — not exactly a cold segment, but at the same time, not our warm acquaintances.
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Category C VCs are people who have been referred to us, some of them we met once, and some of these individuals we’ve never met.
Then, create a set of blurbs designed for different VC categories and scenarios. You can think of them as unique templates to use in different situations, being able to repurpose them quickly with minimal personalization.
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For Category A, we created a blurb that contained all the best data and statistics of our company with relevant updates to our traction and achievements since our last call.
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For Category B, we created a short introduction about 3DLOOK, following it up with some rich traction data.
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For Category C, we created a lengthy blurb that contained broad information about the company, the benefits it can offer and the traction.
The blurbs for all categories were sent in personally by the company’s founders. This detail is immensely important to emphasize your validity and help increase conversion.
Sure, there are multiple ways and methodologies you can use for VC segmentation. For instance, some company founders may think it’s best to start with VCs that are less likely to invest in their company, get their feedback, update the pitch and the deck, and then reach out to more relevant investors. However, at 3DLOOK, we focused on the VCs we had a connection with. We figured that if one of them jumps in, we’ll be able to close in the round faster and without a hitch.
Additionally, we received precious feedback which enabled us to optimize our deck and pitch, quickly and accurately, answering all the questions in the best manner possible. The first investor that jumped in was from the top priority group.
It may also be helpful to develop a FAQ document. This allows investors to hop forward to more specific and focused questions. This will grow investor interest in the company and, in turn, help to fast-track things. The entire process could take a lot longer than anticipated without one. This preparation helps you look even more competent and well-versed, giving you a strategic position with the investor community.
Related: Smashing the Glass Ceiling in VC Funding and the Workplace
Use analytics and be proactive
Another vital pillar in successful fundraising, especially when it’s virtual, is analytics. When all of your communication shifts online, you can easily track and analyze the efficacy of your pitches. Our company monitors our outreach campaigns using DocSend, but you can choose any solution that would fit your needs and budget.
With access to streamlined analytics, it becomes easy to track the VCs that are eyeing your materials. You know what they were looking for and where they spend the most time. Develop a follow-up strategy and ask the VCs if they want to know more about the company or if they have any questions regarding your materials. You can be in a more proactive state instead of being reactive and waiting for a VC’s reply.
You will collect a large amount of relevant data and need to set up data rooms to organize every piece of information, which will help optimize the entire process. This didn’t just help us to organize all of our documents, but it also allowed for smart permission management.
We set up two data rooms. You may choose to use this model.
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The first data room gave access to initial due diligence. It was all about information pertaining to client contracts, patents, trademarks, IP rights, financial models, sales deck, sales pipelines, cap table, etc.
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The second data room was meant for detailed due diligence and provided access to more information. This includes employee contracts, CVs, stock options, corporate documents, etc. We provided access to this room right after we received the term sheets.
We also thought of a new tactic of customized links. Every VC segment (we had three segments as mentioned above) received a different link, and we could also track the activity of every VC in the list. Once we came to an agreement with the primary investor, we simply disabled the links for every other potential investor without needing to delete the files.
All in all, fundraising is by no means easy, especially now as checks get higher and so does the competition, but with the right approach, you have all the chances of sealing the deal and getting one step closer to building your unicorn company.
Opinions expressed by Entrepreneur contributors are their own.
Rarely do I come across inspiring quotes from mathematicians, but this one, from the late Morris Kline, has been echoing in my brain for weeks: “The most fertile source of insight is hindsight.”
Startups are often urged to keep driving forward; to hit new targets, build more and grow faster, bigger, better. As Jotform recently turned 15 and unveiled our first new brand in over a decade, I’ve been inspired to pause and look back in the rearview mirror.
Related: The Best Leadership Advice We Heard in 2021
I launched the company in 2006, driven by a vision to create simple web forms (and fueled by gallons of Starbucks coffee). So much has changed since those early days. We’ve added hundreds of staff, opened three offices on two continents and built a product with 10 million users. And we still haven’t taken any outside funding.
I list these milestones not to brag, but to reinforce what’s possible when you take your time and pursue a single, evolving goal. No one would ever call Jotform an overnight success — and that’s the point. We’ve done it our way, and I’ve learned what feels like a thousand lessons over the years. So, I wanted to gather up my very best advice in one place. This is what I would tell myself as I prepared to launch the company. I hope it helps and reassures you, wherever you are on your startup journey.
1. Getting started
Don’t try to brainstorm your way into business
It’s nearly impossible to conjure a great business idea from thin air. The most successful startups spring directly from need, frustration, incomplete experience or the burning desire to do something better. When I worked for a media company, I was constantly coding forms for the editors — and it was boring, tedious work. One day I thought, maybe I should build a product that makes this easy. That’s how Jotform was born.
You (really) don’t need a co-founder
Experts often advise entrepreneurs to pair up, but there’s so much freedom in going it alone. If you’re worried that you don’t have all the necessary skills, read books, attend conferences, listen to podcasts and do everything you can to patch those gaps. And if your business succeeds, you can hire brilliant people to fill in where you struggle.
Harness your loneliness
Starting a company can be isolating, but know that this feeling is temporary. Don’t let loneliness knock you off course. Use quiet times to think and scheme and learn as much as you can. Eventually, you’ll have a team to keep you company — and there’s a good chance you’ll miss those quiet, distraction-free days.
Don’t quit your job cold turkey
It’s infinitely easier to start a business while you’re employed. The trade-off? It takes longer to hit cruising altitude. I created my first product in 1998, while I was a college student. I continued to sell it while finishing my degree, serving in the military and working full-time. By the time I left my job, that product replaced my salary and gave me an infinite runway to build Jotform. If you don’t have another revenue stream, build the free version of your offering while you’re still employed. Don’t quit until you release the paid version and establish a solid subscription base.
Define your own vision of success
No one else can (or should) tell you what success looks like. Don’t waste time worrying about those media-darling founders or what your MBA classmates have done. If you’ve gained even a little traction, that’s success. A handful of customers or a few sales means you’re on the right track. Don’t rush. Get the core product right, and keep going.
Waiting is risky
Get your work in front of real people as early as possible. It’s the best way to see if they’ll use and pay for what you’ve built. The longer you wait, the greater the chance you’re building in the wrong direction — and that can be dangerous. Release fast, ask questions and apply the feedback to keep improving. It sounds simple, but it’s amazing how many founders are afraid to take this critical leap.
Find your best angle
You can’t launch a business and wait for customers to show up like trick-or-treaters on Halloween. They need a reason to care; something that’s unique, intriguing, fresh or surprising. Jotform used drag-and-drop technology before it was a thing. That was our angle, and I applied it to pitch news sites, write blog posts and develop PR plans. Consider what people care about most, and emphasize how your startup supports their busy lives.
Related: To Become a Top Executive, Take Control of Your Personal Brand Today
2. Growing and scaling your startup
Pamper your first 1,000 users
Treat these people like family. After all, they’ve taken a chance on you. Learn as much about them as you can: What do they want? What do they want to avoid? What features do they need? What’s confusing? Enterprise products might have smaller numbers, but the same logic applies. Provide exceptional support and earn their loyalty.
Improve, grow, improve, grow
Building a product means creating something people want and need, and then continually making it better. Growth requires marketing and sales. In the early days, you need to switch back and forth between the two. Improve your work. Then share helpful, valuable content to grow your platform — whether that’s posting on social media, writing a blog, recording a podcast or whatever works for you.
Chase customer-funded growth
Even if you’re backed by VCs, angels, private equity or your grandmother (no shame), every dollar you get from real customers is a dollar you’ve truly earned. Pursuing anything else can be a waste of time when you’re starting out, because it’s more important to get the basics right. Of course, there are exceptions. You might need financial support if you have fast-growing competitors, you’re in a land grab, or you need physical infrastructure. Almost everything else? You can start slowly and fund your growth with profits.
Scaling a business requires constant reorientation
Every new stage brings different challenges — and growing a startup is like cell division. At first, you have a big, amorphous company with overlapping roles and responsibilities. As you add more people, the work becomes increasingly granular. For example, HR splits into HR and recruiting, then recruiting splits to focus on different roles or geographical areas, and so on.
Set and measure the right metrics
We track all kinds of data, but two targets matter more than anything: Are people using our product? Do our employees love (and feel proud of) working here? All the page views and bounce rates mean nothing if people aren’t actively using what you provide, and if your teams are loath to show up for work each day. Focus on what matters.
Related: Are You Really Listening to Your Customers? Probably Not, But You Should.
3. Building a great team
Hire to ease your bottlenecks
Signing your first employee is a big step. You might need an office. This right person should also be well-rounded, so they can handle lots of different tasks. But look for someone who can eliminate the biggest roadblocks in your business. And it has to be someone you actually like, because you’re going to spend a lot of time together. Would you enjoy having lunch with this person? No? It’s probably not going to work out. Choose wisely.
Consider where you want to work
In 2021, do you need an office, or can everyone work remotely? Your initial decision sets a course for the future. If you launch without a physical space, you’ll probably need to continue that way. I feel strongly about working from an office (assuming it’s safe), because startups are a group sport. Otherwise, it’s like assembling a basketball team that plays remotely. So much happens in the margins of a workday to deepen relationships and help people work together more effectively.
Feather your nest
If you do have an office, make it feel like a second home. Don’t skimp. Give people ergonomic chairs, big tables, standing desk options, fresh air, natural light and plants. These details show your employees that you care about their comfort and productivity. And make sure your teams have more than snack machines and stale coffee to stay fueled.
Build a foundation with your first five hires
The first five people on your team are essential. At Jotform, they created the prototype for our entire company. We had a designer, growth specialist, front-end and back-end developers and a UX pro. That combination was so successful that we set the whole company up in similar, cross-functional teams. Watch for what works in your business, and apply that model as you grow.
Strong teams are happy teams
I always tell our new interns, “we’re going to teach you how to work as a team.” In school, team projects are usually terrible, but we ensure our interns have a satisfying, collaborative experience. You can see it’s working when they form bonds. They go to lunch together, share credit for wins and losses and thank each other for their contributions. You can’t fake genuine respect.
Grow slowly to protect your culture
Massive hiring sprees lead to mass confusion. If you hire a whole team of people all at once, you can’t spend time with them or get to know them. Even if your business is already established, adding too many people in one shot prevents current employees from sharing your systems and best practices — both formally and informally. Going slowly is the best way to avoid cultural breakdown.
Steer clear of gossips
If someone bad-mouths or divulges inside stories from their previous company, there’s a good chance they’ll eventually do the same to you. Look for people with character; people who don’t enter with their egos and who truly want to collaborate.
Nurture your star employees
Passionate, excited people are worth their weight in gold. Ensure they’re happy, and help them grow. If someone is driven, listen closely to where they want to go and map a plan to help them get there. Check in regularly and track their progress — and don’t force creative people into a box. Stay open and let them change course if necessary. Your whole business will be stronger for it.
Related: Want Customers To Stick Around? Get Their Feedback From Day 1 (and Keep Doing It)
4. Leadership
Take a page from parenting books
If you can lead children, you can manage employees — and I say this without a hint of sarcasm or disrespect. We all need both security and independence. If kids don’t feel secure, they shut down and stop playing. With strong attachments, they’ll begin to thrive. Kids also need space to explore. When I need my kids to do something, like put on their shoes, I describe how they need shoes to go to the park. They choose the shoes they want and put them on independently; I just set the parameters. All these lessons scale to team members and employees.
Culture is encoded behavior
You can’t design company culture. It’s not something you can write down and say, “this is our culture.” Instead, culture is simply a shorthand for how your company functions. For example, junior employees watch how senior team members work, and then follow their lead. If you want something done a certain way, clearly set those standards and expectations. Encode it in daily operations.
Instill a sense of “nationalism” among your team
As a kid, I wasn’t a leader. I was a follower who observed and participated. Stirring people’s emotions doesn’t come naturally to me, but it’s my responsibility. That’s why I give a short speech before each Friday’s Demo Day. Communicating your excitement about the work is contagious. People hear and feel it, and it strengthens your tribe.
You can be a good presenter, even if you’re shy
You don’t have to be an extroverted salesperson to give good speeches. Clarify your thoughts, prepare what you want to say, and use notes instead of reading or memorizing. Every talk will help you improve, and all that practice adds up over time. If you feel a little jittery, remember that the point is to connect with people, not to impress them.
The more you delegate, the more you’ll succeed
It’s an indisputable truth, like the law of gravity: You can be great at some things, but you can’t be great at everything. But if you delegate your less-proficient tasks to others, you can dedicate more time to your best work. Start with small projects. Let people learn and develop confidence, and don’t expect them to improve instantly.
Don’t wait for people to fail
Once you delegate, check back often and provide consistent feedback. That way, the other person (or team) has the information they need to succeed, and you’re free to focus, knowing the task is well underway. And give people time and space to find their rhythm — especially in the beginning.
Superheroes are vastly overrated
Doing everything yourself will inevitably backfire. You might have to cover multiple roles in the early days of your startup, but that’s not sustainable for the long-term. It all comes down to trust: People who refuse to delegate don’t think someone else will do the job as well as they can. The fix lies in communicating vision and context along with the assignment. When someone understands why they’re undertaking a task, there’s a good chance they’ll do a great (and even better) job than you.
5. Staying happy, healthy, creative and motivated
Clarity requires preparation
Whenever you write anything — a document, report, presentation or even an important email — draft it and set it aside. Come back and read it later. Cut extra words, make it shorter, and get to the point faster. Clarity not only eliminates confusion, but it also conveys confidence and momentum. It matters more than we think.
Desire fuels motivation
If you really want something, you’ll put in the necessary time and effort. Struggling to get motivated can indicate that you’re not on the right path – and that’s fine. Just be honest with yourself. If everything checks out, but you’re still struggling, try reading about successful companies in your industry. Work from an office instead of your home. Rest on the weekends to avoid burnout. Create systems and routines that replace the need for motivation.
Get help sooner than later
Filters and automation can only take you so far. If you’re drowning in emails, communication, administrative tasks and everyday details, it’s time to get some help. I just hired a fantastic personal assistant after 15 years in business. I probably should have taken this step 10 years ago. Don’t wait until you’re slipping further underwater.
Believe in something bigger than today
Motivation is about meaning. When you believe in something, you have the drive to pursue that goal. As the French author Antoine de Saint-Exupéry wrote, “If you wish to build a ship, do not divide the men into teams and send them to the forest to cut wood. Instead, teach them to long for the vast and endless sea.”
Progress is inspiring
Research shows that nothing boosts emotion, perception and motivation more than making progress in meaningful work — no matter how small each step may be. If you’re working on five products or projects at once, it’s tough to get people excited about all of them. A singular focus ensures everyone’s on the same team; rowing toward the same destination. Each person can see how their direct contribution moves the whole group forward.
Find solutions on your bookshelves
If you’re stuck in a slump or trying to untangle a head-throbbing problem, turn to books. Find the title that’s most applicable to your situation, and start reading. After a few pages, the fog usually lifts and your head begins to clear. Soon enough, you’ll be reaching for a notepad and feeling excited again.
This mistake is not the end of the world
Errors, slipups, public mistakes and disappointments can feel devastating. Do everything you can to address the problem, and then let it go. Learn from the situation, prepare for next time and create contingency plans to minimize your worries. For example, we just hired our first general counsel. This step alone takes so much weight off my shoulders and helps me sleep better at night.
Know the difference between profile and platform
I don’t care about being a public figure. I never have. The thought of being recognized at the playground while I’m swinging with my kids, seems bizarre. However, I’ve built a platform by writing about entrepreneurship. A platform enables you to authentically share and promote your business, while public notoriety is often quite empty — and it’s almost always temporary.
Take care of your whole self
Hit the gym, play pickup basketball with your team, climb the monkey bars with your kids or do whatever makes you feel alive and joyful. This matters just as much (or more) than the quarterly earnings report. Try not to work after 10 p/m. Wind down before you go to bed, and let go of anything unfinished. Tomorrow’s a new day.
I’ve written previously about how the pandemic has made cooking with my children part of my normal routine. It’s an opportunity to get them to help me in the kitchen and to teach them about healthy eating. It’s also an important opportunity for me to start shattering stereotypes about how certain types of foods aren’t good for them. One particular cuisine that too often gets branded as “unhealthy” is Mexican food.
Tia Lupita Foods “From an American perspective, we think of Mexican food as being fried, filled with cheese and topped with sour cream, and extremely greasy. And that’s just not true, ” says Hector Saldívar, founder of Tia Lupita Foods. “There is so much more to Mexican food than the Americanized burrito. Mexican food has been and continues to be a trendsetter in the food space — and it’s healthy.”
So Saldívar is on a singular mission to change Americans’ relationships with Mexican food. As a Mexican founder, he knows that food is love. His mother, known affectionately as Tia Lupita (“Aunt Lupita” in Spanish), filled the family kitchen with the love, laughs and tasty eats that brought everyone together. “In Mexico, family recipes are valuable heirlooms carefully handed down from generation to generation,” Saldívar says. “Tia perfected her own family hot sauce recipe to create a delightful balance of heat and flavor, coveted by anyone lucky enough to get a taste. I named the brand to honor my mother and our family legacy.”
From hot sauces (my favorite is Tia Lupita Chipotle) to cactus tortilla chips, Saldívar is focused on cutting out preservatives, using gluten-free ingredients and adding no sugar and very little salt. The Tia Lupita grain free cactus tortillas are also soft and flavorful, with only six grams of net carbs and 45 calories per serving.
“It’s important for me to introduce these amazing ingredients we have on hand that are so culturally connected to Mexico and my heritage — nopales, or cactus. Cacti are the most sustainable plants in the world and need little water to grow,” Saldívar says. “We are intentional about reducing our carbon footprint and saving water. We are on a mission to help save the world, one taco at a time.”
Here are three lessons Saldívar has learned on his journey to bring the bold flavors of his Mexican home straight into our kitchens:
Over-index on your strengths
As a child, Saldívar always thought he would follow in his father’s footsteps and become a doctor. After struggling during the first two years of medical school, Saldívar’s father sat him down and encouraged him to follow a different career path.
After leaving medical school, Saldívar had a successful career in the food industry working at Nestle and Diamond Snacks. It was an incredible training ground to start Tia Lupita. “I learned how to develop a business plan and to understand the details about how much it was going to cost you to solve the problem, and how much money you would ultimately make,” Saldívar says. He also learned the art of telling a story, with scripts and narratives on how to present and sell. And finally, understanding the basics of sales planning and forecasting was critical in his training.
“I over-index on my strengths now, all of which have helped me ultimately start Tia Lupita,” Saldívar says. “I had built a track record of success and the skills I needed to finally bet on myself.”
Image Credit: Tia Lupita Foods
Understand your market opportunity
In 2017, when Saldívar was working at Diamond Foods, the company was sold. He found himself at a crossroads. Did he work for another food industry titan or finally go off on his own? “I saw so much white space and little-to-no competition,” Saldívar says. “Mexican brands that were in the marketplace had not updated their ingredients and were filled with junk. They had not been innovating and were comfortable offering bland or mild-tasting products.”
Saldívar envisioned creating a brand that wasn’t for his grandparents or his parents, but rather a brand that was authentic, original and connected with the next generation. “I started my career selling nostalgic products to Mexican immigrants,” Saldívar says. “Now, I’m selling to the kids of Mexican immigrants who have grown up and are paying attention to what they put on their kitchen tables.”
Today, Hispanic buying power in the U.S. is $1.9 trillion, which is larger than the GDP of Italy. Hispanics make up 20.8% of the millennial generation, now the most diverse generation in U.S. history. Three out of four Americans agree that Hispanics continue to have a huge impact on mainstream culture and a significant influence on the food industry.
Don’t underestimate the power of one
As a Mexican founder, the road to fundraising hasn’t been easy for Saldívar. Although he initially bootstrapped the business and self-funded, he needed access to more capital and resources to continue to scale. “There are more people eating tacos than pizza and pasta both at restaurants and at home,” he says. “But there’s still a significant underrepresentation of Hispanic-founded startups. I’m raising funds right now, and it’s definitely a struggle.”
Saldívar also shares that because English is his second language, it can make it harder for him to communicate in corporate settings and meetings with investors. He describes having to translate what he’s thinking into English to land his point. Saldívar sees some investors making snap judgements upon meeting him about whether he as a founder is “investable or bankable” or not.
He’s looking forward to the world opening up again, where he and the Tia Lupita team can be in stores, doing field marketing events and attending food trade shows. Meeting people face-to-face and offering them Tia Lupita products to try for the first time are the moments Saldívar appreciates most.
“We need more allies to pay attention to Hispanic founders and support us,” he says. “Don’t underestimate the power of one individual. If you try Tia Lupita and love it, please share the experience. We need all the allies we can get.”
As businesses of all sizes and sectors struggle to find skilled workers, community colleges have an important role to play in replenishing the labor pool. Unfortunately, community colleges across the country saw devastating drops in enrollment over the last two years as the number of students attending fell by half a million. At the same time, states and local governments have been forced to make significant budget cuts to these institutions, which find themselves strapped for cash amid ongoing pandemic-recovery efforts. For businesses and workers alike, it is more pressing than ever that we save these community colleges by finding new ways to help their faculty and students thrive.
Shutterstock During fiscal year 2021, states slashed financial support for two-year colleges by $457 million while funding for four-year institutions fell by only $63 million, according to a recent study by the State Higher Education Executive Officers Association. These cuts, coupled with the sharp decline in student enrollment, have exacerbated a funding shortfall that plagued community colleges long before Covid-19 swept the globe.
Related: Community Colleges and the Creation of Entrepreneurial Ecosystems
Community colleges lack critical resources
Adjunct professors have been hit particularly hard. Even prior to state and local budget cuts, adjunct professors at community colleges typically earned between $20,000 and $25,000 per year, and nearly 25% relied on public assistance. Another 40% had trouble covering basic household expenses, according to the American Federation of Teachers.
On top of low pay, these professors are not afforded the same benefits as full-time faculty. Many aren’t compensated for the time they spend outside of the classroom helping their students succeed. Often, adjunct faculty members at community colleges are forced to hold office hours on their own time and without pay — a practice that disadvantages both teachers and students.
Related: Trade School vs. College: Which Is Right for You? (Infographic)
But it’s not just adjunct faculty who are suffering. Community college professors across the board face funding limitations that professors at four-year institutions simply don’t have to contend with. Take remedial education, for example. Roughly 60% of community college students are required to take at least one remedial course to earn a degree, but many schools do not have the funds to adequately provide this basic skills education.
Additionally, community colleges lack many of the critical resources found at four-year colleges, including support staff, counselors, mental-health services, librarians and tutors.
Online tools can help bridge the gap
One way we can mitigate these strains is through online tools. Inexpensive and time-saving, online-learning platforms like Chegg and Khan Academy provide support not only to students, but also to professors with limited resources and time constraints. These tools can provide those attending community colleges with the guidance that students at adequately funded institutions receive through office hours and on-campus tutors.
Unfortunately, there are some faculty and administrators who view these tools as a means for students to bypass traditional learning, rather than as sources for supplemental support. The reality is, most students use these platforms as a way to get help on their tougher subjects throughout the year when their professors are unable to provide extra assistance. Educators at community colleges are already stretched thin, and limiting tools that can help shift the load off their shoulders only makes their jobs more difficult.
Related: Can the Next Wave of Young Entrepreneurs Even Afford to Attend College?
Unlike most traditional four-year professors, those teaching at community colleges serve a broad population of students with a wide range of academic levels and needs — and those students will be the future of our workforce. To make this task more difficult, many of these two-year institutions are woefully underfunded, leaving community colleges with limited resources to help their students succeed. Online tools can be a game-changer for our nation’s two-year colleges, and I’m hopeful their use will become more common among both students and faculty, which will help businesses get the workers they need to grow and thrive.
Opinions expressed by Entrepreneur contributors are their own.
The conventional startup story goes something like this: An entrepreneur has an amazing idea, leaves their day job to start the new company and then partners with venture capital firms to develop their idea and fund growth. Many companies follow that arc, with a staggering 10,800 U.S. companies receiving venture funding in 2020 alone, according to The National Venture Capital Association.
To level set, venture funding is simply a form of capital designed for companies early in their life cycle. Venture capital gives startups cash to grow and expect equity — instead of debt repayments — in return, which allows young companies to put more of the cash they generate back into building a defensible, scaling business. In its early years, venture funding was provided by a limited number of venture capital firms, commonly referred to as VCs. Today, the number of VCs providing venture capital has grown tremendously. In the first half of 2021, in fact, more than $288 billion of global venture funding was invested worldwide, a record-setting number.
A growing player within venture funding is existing companies. Whether they are looking to bring in new technologies or enter new markets, venture funding from existing corporations to startups increased by 32 percent between 2013 and 2019, with three-quarters of Fortune 100 companies active in the space.
So are all venture capital sources the same? Is partnering with a VC the only way to see your company grow? I have personally led three startups that were created inside of larger companies and grew these companies to be leaders within their space without ever taking external venture funding. Today, I am leading a startup backed by traditional venture capital. Below, I share some of the most important lessons I’ve learned when seeking funding that can be helpful as you make your own decision.
Related: The 10 Most Reliable Ways to Fund a Startup
1. Know the economics of your business
Startup owners need to be evangelists as well as experts. Their enthusiasm must be matched by an expansive understanding of the young company’s strengths, weaknesses and prospects that lie ahead. Doing so means becoming a master of metrics. As soon as feasible, you have to start estimating and tracking metrics such as gross margin, customer acquisition cost and gross lifetime value. And you need to know how all these numbers will change as you establish economies of scale. Financial literacy is like a language that allows you to translate what’s happening to your business — without it, you’re lost.
Related: Improve Your Financial Literacy to Bulletproof Your Business
When it comes to unit economics, VCs want to understand the general unit economics mentioned above. However, VCs traditionally can be much more forgiving for startups that generate negative margins in the early years, as they find product-market fit and optimize how they will drive scale and leadership in large markets. On the other hand, startups within other companies might be constrained by economics and value propositions that the parent company has put in place, along with the parent company’s willingness to absorb negative margins.
For example, one of the startups I worked with decided to investigate whether we could offer discounted prices to customers that order for longer terms. But we discovered that the accounting system of the parent company couldn’t accommodate those discounts. To an extent, our strategy was limited by their technology. That’s why entrepreneurs must also become financial experts — so they can steer the strategy in a new direction while navigating through the reality of what is possible today.
2. Know your investors’ goals and capabilities
Young companies don’t grow in a straight line; there are ups and downs, zigs and zags. Any entrepreneur who expects otherwise is in for a rude awakening. The key is not to try and straighten this line; it’s to embrace and anticipate the meandering.
How different investors measure success will be different. VCs typically want to see their portfolio companies develop product-market fit and then push to see their investments grow quickly and become the first or second player in a massive market. Established companies, however, might invest with other strategic goals, such as building out a portfolio of IP that supersedes the absolute dollar return on their investment.
Established companies’ existing relationships and processes, from supply chain to HR support, can help mitigate the unexpected and allow startups to stay focused on their key mission. In recent years, though, the venture capital studio model has emerged, bringing resources similar to those offered by established companies.
The key decision point is how you get the startup and investors — whether those investors are traditional VCs or existing companies — to align on the appropriate horizon and risk tolerance and make sure the startup’s goals and any support resources respect that overall risk tolerance.
Related: Risk Literacy: Need of the Hour
IBM is a good example of a company that makes smart bets on startups. It created an Emerging Business Opportunities campaign to foster new initiatives across IBM. After five years, only three of those initiatives failed, whereas the other 22 now account for a healthy $15 billion in annual revenue.
3. Know your team
Regardless of management style or leadership goals, anyone at the helm of a startup needs to be transparent with their workforce. The team must always be informed about how things are going — even if the news is bad. Traditional VC-backed firms tend to be smaller, at least at first, so it is easy to be transparent. Even as the firms scale, teams can still build and maintain a unique, organic culture that can help drive them toward their vision.
This takes on a slightly different dimension in startups funded by existing organizations that operate close to or within that organization. Because these early-stage companies are autonomous yet also integrated into a larger company, they need to be transparent with people inside and outside of the startup. When switching between one audience and the other, it’s important to adjust the lingo, cultural touchstones and processes that are mentioned. In that way, being willing to be transparent takes a backseat to how and what you reveal.
I learned how to walk this fine line while working with a startup that began as a product concept within a larger company. The CEO of the larger company gave the initiative 12 months and a set budget to gain some traction, and we had to prepare the company to stand on its own while continuing to justify its existence to the CEO. That effort worked, as the startup is now a pillar of the larger company’s business — something that stands upright on its own and still manages to prop the larger company up as well.
Running any startup involves an unbelievable amount of pressure, and there is no prescribed road to success. As part of that journey, choosing funding from a traditional VC or an existing company is not a simple decision. Some companies choose to totally fund themselves, called bootstrapping, such as Mailchimp before it was acquired by Intuit for $12 billion. The right decision about fundraising is less about the particular source and more about which source can provide the resources, culture and vision that align with your startup’s goals in five to 10 years.
Opinions expressed by Entrepreneur contributors are their own.
Accepting funds from investors is inevitable for all most startups unless the founder(s) generate enough money to make up for expenses and spend on future developments, which happens rarely. Every startup needs funds to grow and expand its scope.
In normal circumstances, a startup accepts funds and releases equities in return. Compared to 15 or 20 years ago, startups find it easier to raise funds. Investors are more likely to invest their money in innovative ideas, and the number of venture capitalists has increased. Bigger companies pay billions of dollars to buy related startups, and numerous platforms for fundraising are available.
It may seem felicitous that everyone can collect funds for their ideas and start a business. But this is just a part of the issue. In today’s business world, with many opportunities for collecting funds, startups are often killed by excessive fundraising, not merely underfunding.
When the funding target is met, some startups may stop fundraising and return to normal. But the danger is that some recipients may continue to collect funds and release more equities to investors. The influx of large amounts of money into the business tempts many founders to continue the process as long as possible.
Overfunding kills startups more than underfunding
When a business can receive massive sums of money, it proves that the idea behind it has been fascinating enough to make investors write the check – we don’t want to talk about the operational part and other stuff involved in a business. The idea is what matters here.
Investors use “vitamins” and “painkillers” tags to identify ideas with high growth potential. Vitamins are those generic ideas that don’t seem to be addictive. In contrast, painkillers are ideas that can become part of users’ daily routine. Social media apps like Twitter, Facebook, Instagram and Snapchat are prominent examples of Painkillers.
The more a business can collect funds, the more promising it appears to the general public and other investors. Because of this, many founders continue fundraising in order to disguise their vitamins as painkillers. While they may think they are sly as a fox, this tactic may become a death trap for their startup. Here is how.
Related: Think You Need Venture Capital Backing to Start Your Business? Think Again.
The imbalance between expenses and revenue
The first red flag is when expenses exceed the income or total revenue, and the business has to deal with net operating loss (NOL). During the initial phases of development, expenses are not so high, so a part of the total revenue can be allocated to make up for expenses. In this case, the startup can survive, although the founders do not make much profit.
While accepting funds, the business can accelerate development and expand at double speed. This is absolutely fantastic, but it amounts to more expenses, such as hiring more people and investing more money in marketing. The first warning bell rings when there is no reasonable balance between expenses and revenues in financial statements.
In other words, the business is dealing with negative operating cash flow (OCF). The funds came to the company, skyrocketed development, and caused higher expenses. But revenues couldn’t catch up with fees. A negative OCF is not something that investors like to see, and can mean that you are in a death trap.
To get out of this death trap, founders usually have two options. The first is decreasing costs by doing things like firing employees or selling part of the company’s assets. This can make your business look unstable to investors, and you may lose public trust.
The second option is to find investors who trust you and are ready to inject more money into your business. However, since your company is declining, some malignant investors may take advantage of this opportunity to seize your achievements. In such a situation, you do not have much bargaining power, and you may have to give in to the demands of investors to keep your business alive.
Related: 4 Steps To Help You Manage Your Operating Cash Flow Statement
The danger of adding too many investors
When your idea is innovative enough to convince investors, you will probably be dealing with a lot of these people. Many of them are ready to give you their money to contribute to your business. This is a fixed investment rule all over the world. But it can signal a second red flag if the founder(s) accept too many investors in the business.
When a business has a large number of investors, it becomes challenging to manage them. Sometimes a CEO has to spend all his time keeping investors happy rather than focusing on the company’s development and strategies. Some investors expect the CEO to be available at all times of the day.
Involving more investors is equal to releasing more equities. Due to the excessive releasing of equities, the founders may lose decision-making and bargaining power because investors have a significant share of the business. Remember when Steve Jobs was fired from Apple, the company he founded?
Before going to the fundraising stage, you need to decide on the amount of money your business needs to stay competitive. Never go too far in collecting funds. Next, you must find flexible and sophisticated investors. These investors must know your niche, and they should trust you so much that they do not interfere in your work. Boundaries and red lines must be clear so that investors do not disrupt management.
Related: How Startups Can Attract the Right Type of Investors
Less chance for innovation and risk-taking
When massive sums of money are pumped into the business, the founders will have more courage to expand their market and further development. But having an inexhaustible source of cash may hinder innovation. Sometimes the best innovations happen when founders are in financial trouble, and they have to drive the business forward with limited resources.
Another danger of having unlimited resources is that it doesn’t challenge management skills. The art of driving forward with a specific budget is an essential management skill that few people have. When resources are limited, managers have to be more careful in their decisions and spend every penny for a specific reason.
Opinions expressed by Entrepreneur contributors are their own.
Crowdfunding has taken off in a big way in recent years, creating some successful businesses in the process. However, those that are successful are just a few among many thousands of promising projects looking for backing. How do you create a successful crowdfunding project that brings you the investment you need?
Here are seven surefire tips to help you out.
Create your team
Don’t go into this thinking you can do it solo. It might be your idea or your product, but you’re going to need help. In the first instance, you need help with publicity, and we suggest you bring on board Brand Ambassadors. These could be family or friends –— preferably individuals with excellent social media footprints — who will spread the word and help get your brand exposure. If you know anyone with even minor celebrity status, see if they would come on board.
Related: So, What’s a Brand Ambassador and Why Are They Important?
Build a buzz
Next, you need to start creating a buzz around your brand and product. Don’t go all out and simply launch it, make previews and build it up. Get people knowing that there’s something special coming. A little glimpse via Twitter, some hints on your Facebook page, a sneak peak picture on Instagram — create suspense and thrill around your product launch. This will drive curiosity and build buzz.
Get professionals on board
We began by advising you to not go it alone, and this tip elaborates on that. There are experienced, professional crowdfunding marketing agencies who can help you get things off the ground and build up that initial interest. It’s worth investigating these as they can provide great value for the money and accelerate your brand awareness. If you’re not experienced in online marketing yourself, a bit of expert help is a sensible investment.
Use quality images
We cannot stress the importance of quality when it to images. Don’t get your phone out for those promo pictures. You might have a multi-megapixel camera, but it’s not enough. Put aside some of your marketing budget for professional pictures. It won’t cost as much as you might think, and you’ll find the results far better than a DIY effort. It’s tempting to go the cheap route until you see what you can get from an expert.
Get a video made
Video is the way to promote a product. The younger generation especially has embraced the likes of YouTube as their favored place to be for entertainment, and they will pay attention to a well-made video presentation or Vlog. Once again, if you’re not up to speed, find someone who can produce video content for you — you’ll make much more of an impact. Share videos via your social media feed and across all platforms for greater exposure.
Don’t stoop to begging
Remember that you’re pitching for investors to put money into a fantastic new business or product that is going to result in great returns for them. Go into meetings or online chats with an attitude that says this is a great opportunity for the investor. You don’t want to come off like you are desperate for money. If you can show them that there’s something exciting and rewarding here, that you can make it worth their effort to become involved, you’ll stand a greater chance of landing the big money investors. Talk to your agency about this point as if you’re not used to pitching, they’ll be able to help.
Great customer service
Our final tip might be the most important of all. You’ve got your ambassadors on board, you have some investment, and you’re marketing your brand on all of your social channels. Now is the time to keep the promises you make — not just to your investors, but to your customers. Today’s consumer wants excellent customer service and nothing less. If you promise delivery on a certain day, make sure it happens. It is easy to lose customers who expect what is offered and then have a poor experience.
Related: 6 Tips for Successfully Marketing Your Crowdfunding Campaign
Crowdfunding is a marketplace in of itself. Anyone interesting in backing a business will look at more than one. This is why you have to get everything right if you’re going to land the big fish. We hope the tips above give you inspiration to devise a crowdfunding campaign that brings you success, so start right now by looking for those all important Brand Ambassadors.