The blog is called Startup Spark and is similar to Venture Files but is a broader version on all types of entrepreneurship.

I invite you to check it out and subscribe. This blog will continue but in the coming months I will be focusing this blog more on innovation topics and will be unveiling a new design.

So keep reading Venture Files and add Startup Spark to your feed reader and your daily viewing.

Technorati Tags: Entrepreneurship

Written by Steven Fisher on May 1, 2007

Then I started to look at all my previous business plans and those I have advised on and reviewed for feedback. Most were written for the purpose of presenting to investors with varying degrees of success. The others were operational and an exercise in strategy and vision to ensure that everyone understand where the company is going so there is proper execution.

Now there are many people that are WAY MORE knowledgeable about writing these types of documents and many have written good blog posts on “writing business plans“. What I would like to do is take a look at this document and provide all of my readers out there with some real practical lessons and how it should be written if it is an internal use document or one for investors.

Look for this start next week and I will do about a section a week. For those of you out there with experiences to share, comment away. For those of you who have written them I hope to make you laugh and I look forward to your perspective and anecdotes.

Technorati Tags: business+plan, businessplan

Written by Steven Fisher on March 6, 2007

Here is an entrepreneur’s take on the slideshow:

Think of this as liner notes if an entrepreneur was giving this….

Slide 5 – “How the VC makes money” – This is great. It gives an entrepreneur an understanding on two levels. First, the VC has people they answer to, the Limited Partners, and must make money for them. Second, should an entrepreneur think that their investment should be part of the portfolio, know that they are more likely to be a part of the failure list and that they need to have a big play to help the VC make their numbers based on the failure rate.

Slide 6 – “Stages of Investment” – Many entrepreneur’s ask about what type of investment is right. This is usually when they are going out for the first time and looking at angel vs. series A.

Slide 7 – “What a good VC will add” – This is what so many claim yet so few deliver. This should be a list of requirements and a test against any VC firm. He actually included case studies so they put their money where their mouth is – literally.

Slide 10 – “Typical Deal Terms” – Every entrepreneur that is looking for VC should make no mistake that they are in this to make money. They may like you but they like how much money the company could make even better. This means putting certain terms in place to ensure their investment.

Slide 13 – “When NOT to raise VC” – If you take one slide away this is the one. Everyone looks at VC as the way to get to the finish line but most of the time a company is not a candidate. If you are any of these three or close to it, rethink your plan or find other ways to finance.

Slide 18 – “Sharing relevant information” – You can see from this slide that it is important to have documents but not the 100 page business plan in the beginning. In the end it will be about them checking on you, those interested in buying from you and the who and how of execution.

In the end this presentation has a bottom line – This is a partnership and there must be alignment on all sides in order to make it work. It is about relationships, communication and execution. If any one of those three are missing you will fail.

Technorati Tags: Entrepreneurship, venture capital, venture+capital

Written by Steven Fisher on February 26, 2007

Getting a standing ovation is hard.

Guy Kawasaki writes on how he thinks you should get one.

Most you want to say “well, yeah, of course”, but you don’t really do them.

First, you should get your house in order and fix your pitch with these tips. Documents and writing for non-writers and Tips to Keep your Cool will help you be prepared for higher level sage advice. There are also some great articles on that blog entry.

Then you should practice getting your company mission or even your own job down cold.

In Guy’s blog, he has a few great pieces of advice that I completely support.

The biggest one I think is “Cut the Sales Pitch”.

The purpose of most keynotes is to entertain and inform the audience. It is seldom to provide you with an opportunity to pitch your product, service, or company. For example, if you’re invited to speak about the future of digital music, you shouldn’t talk about the latest MP3 player that your company is selling.

He does follow up with more on his addendum which is even better and has one of my favorite things to do – Conversational Tone of Voice.

People want to feel like you are their friend and are talking to them over a beer. If you can find this relaxed approach in your speaking, even in front of 1000 people, you will be successful.

I find that the best speakers are more like performance artists than professional speakers. Take Steve Jobs as a perfect example. He knows how to grab the audience’s attention without fancy graphics or other visual aids. I do feel that the air of secrecy around the products is what makes his presentation more dramatic. I wonder what his presentations would be like without them.

The bottom line I found in becoming a great public speaker is finding as many opportunities to speak and practice delivery and find your own style.

Written by Steven Fisher on March 31, 2006

I have three more bullets I would like to add:

11.) Make sure your VC can execute: He mentioned a funny quote in the blog entry: “the good news is you got the money, but the bad news is you got the money”. This is where so many entrepreneurs I have met are so focused on the getting down their perfect pitch and meeting with VC’s that they forget that they have a company to build. Many are good at raising money but when they finally get it, they don’t properly prepare to use it. This was an obvious factor in the dot com bust a few years ago when young entrepreneurs didn’t have any operational experience and brought in adult supervision too late in the game. Adding to that fact, many of their VC board members were smart-ass freshly minted MBA’s that were more “quant-jock” than trusted advisor. These guys can evolve into great VC’s but they needed proper mentorship to learn how to execute themselves. I guess this why in 1999 there were 12,000 VC’s in the industry and now there are 6,000. Natural selection at its finest.

I find that the true measure of a successful entrepreneur is their ability to execute. I don’t know if this is a natural instinct that many have built into their DNA, but for many people who come from smaller organizations where your impact is felt every day you have to deliver or you are out.

I know many venture capitalists and 99% of them are really good people, but many have never run a company so they don’t understand how to mentor those who need to learn to execute better. This is not a generalization because some have a great instinct for it and you are lucky to have them on your board. I find that the best VC’s are those who have lived the life of an Entrepreneur and/or have some operational experience. The next time I raise money I will make sure I work with a VC that has this background.

12.) If you can’t execute, get a co-founder or a core teammate that can: I know that it is tough to find someone that shares your vision and passion to start a company. Especially when you share 50% of the riches but not necessarily 50% of the workload. Believe me, I know. Many people go it alone and found a company because they are the only one they know crazy enough to do it or believe in the thing they are trying to create before anybody else does. Many first time entrepreneurs have all the right intentions and the passion to build something, but they are just vision people and not execution people. The first company I built I learned the hard way that vision will only get you so far and it failed. Second time around I realized I had to make things happen so learned to be more execution focused. I hate most of the internal operational stuff, so found a good part-time person to help me with that stuff. As the company grew I brought on a minority partner who was all execution and it was great. I am lucky I learned from my mistakes and it was a success for everyone.

13.) Remember that “Vision without Execution is just bullsh!t”: Many people talk about “getting things done” or “making it happen”, but this is all just talk unless you do it. I like to say “Vision without execution is just bulls**t”. It is my quote and I am taking ownership of it. If I am remembered and in anyway I want this statement attributed to me in the ‘Book of Quotes’. Sure many people say similar things, but I wanted the raw bottom line to burn onto your brain so you remember it in the days to come. Vision is a fantastic thing and motivates people to do great things. However, if you sit on your ass and don’t look like you are doing anything, people will resent you and think you are just full of it. Even if you are doing things to ensure that your vision is carried out, that is execution. Prosthelitizing that “this is the way of the future” will only get you so far.

Further reading:

For some excellent reading on the topic of execution, read the book with the same name. Execution is written by Larry Bossidy and Ram Charan. It rocks and you will love the way it lays it out for you.

Written by Steven Fisher on March 22, 2006

HOWEVER, crappy financial models and/or management team bios on the other hands can make or break you.

Here are a few Do’s and Don’ts that I tell people to stay Zen in their pursuit of venture capital:

DO TELL A COMPELLING STORY – The goal of business plan is to create interest – not to have an investor write you a check. In creating interest, you don’t need to tell a the full story of your company but you need to engage the investor as to why this business should exist and what value it creates. The plan should include the essential elements regarding why an investor should invest and spend more time examining the business opportunity.

DON’T USE A BUSINESS PLAN SOFTWARE PROGRAM – These cheesy programs are great if you are starting a small lifestyle business and you might be looking for a loan from your bank. If you are serious about raising money leave these on the self and spend your money on an XBox game.
DON’T OUTSOURCE YOUR BUSINESS PLAN – Who knows your business better than you? That’s right, nobody. But you are an engineer and you suck as a writer, so what do you do? Write it to the best of your ability and find a copy writer who knows how to edit and tune up the structure. If you need a good template, PWC has a great site.

DO USE PLAIN ENGLISH – This is what many people call the “mom test” or the “dinner party test”. If my mom can understand it, then investors will get it. If I can explain it to people over a drink at a dinner party, then investors will get it. Granted, there are probably industry terms that need to be there, but you can explain it in plain terms as a follow on sentence. Otherwise, you will lose people and maybe someone who would have invested in you if they understood it.

DO KEEP IT SHORT – The shorter length does not mean that your business plan should take less time to prepare. Rather, it will take more time. But some people need guidelines.

Remember, page size is a good test but it is not the only measure.

Page size limitations give the entrepreneur additional incentive to focus and provide something of value to the potential investors.

So how long should a business plan be? It varies, but there are some general guidelines I recommend:

• Pre-revenue to first institutional round: Roughly 15-20 pages – VC’s need to see a level of detail beyond the executive summary but this is most important to demonstrate that you can focus. Don’t write an 80 page tome that looks to reengineer the world when you haven’t built a scalable company yet. Investors usually skim certain sections of the plan, even if they are generally interested, which could lead them to miss essential elements. This is why you must get to the point and get to it fast if you have any hope of raising money.
• Emerging Growth and Latter Stage (additional institutional rounds): Roughly 20-30 pages – Here it is all about scale and rapid growth. You are making money, have a good team and are executing your plan. You have put the money where your mouth is but you need more. You will need to demonstrate current operational efficiency and sustained growth. At this point, you can expand more on what the business is doing and what it is planning, but there will be more supporting documents (i.e. operations plan, product development plan, partnership and channel plans) that exist for due diligence. Your job is to let the investor know they exist and make them available when or if they ask for them. At this point in the life of your company you are looking like a speeding train and are going to make a lot of money. So if people want to get on, they need to get on now.��

Business plans, like other marketing communications documents, should be visually appealing and easy-to-read. This can be accomplished by using charts and graphics and by formatting the plan for readability. Effectively using these techniques will enable the investor to more quickly and easily understand the company’s value proposition within fewer pages.

DO USE APPENDICES -While the body of the business plan should be around 15 to 30 pages, appendices can be used for supplemental information. Appendices could include a full set of financial projections, and as appropriate, technical and/or operational drawings, partnership and/or customer agreements, expanded competitor reviews, and lists of key customers among others. If the Appendix is long, a divider should be used to separate it from the body of the plan, or a separate Appendix document should be prepared. These techniques ensure that the investor is not handed a thick business plan, which will make them queasy before even opening it up.

DO BELIEVE IN YOURSELF – If you don’t believe in yourself and your business, all of this is moot.

Written by Steven Fisher on March 6, 2006

DEMO 2006 had a raft of bloggers covering the event.

I really liked TechCrunch’s coverage and Jeff Clavier’s reviews of the companies.

My favorites? Riya, .Zingee, Ugobe, MooBella and Multiverse

Just go to those sites and check them out for yourselves.

Do you think there is room for another conference like DEMO?

It has great companies and lots of press coverage, but it is $3000 to attend.

That is for a reason, but there are many products that don’t make it. Chris Shipley says she sees 700 companies in a year and 10% get chosen. I wonder how many submit and even make it through to the presentation process.

This is truly American Idol for the Web 2.0 crowd.

I believe there exists an opportunity for a event that mixes venture pitches with product demos and localizes the effort.

Have any of you been to DEMO? What would you like to see that isn’t there?

Written by Steven Fisher on February 14, 2006

Brief explanation of Blogging

A weblog or blog is a web-based publication of periodic articles (posts), usually presented in reverse chronological order. It is an online journal with one or many contributors. Besides straight text and hyperlinks, some blogs specialize in incorporating other forms of media such as images, video, or a particular theme.

Blogs differ from traditional web sites in that, rather than being composed of many individual pages connected by hyperlinks, they are composed of a few templates (usually Main Page, Archive Page, and Individual Article/Item Page), into which content is fed from a database. This provides many advantages over traditional sites because of the easy creation of new pages with new data entered into a simple form (usually with Title, Category, and the body of the article), and then submitted. Templates take care of adding the article to the home page, creating the new full article page, and adding the article to the appropriate date or category-based archive. Also, it allows for easy filtering of content for various presentations, like by date, category, author, or one of many other attributes. Most blogs have an administrator or editor and invite/add other authors to contribute content to the blog adding a level of value that traditional web sites can not accomplish.

Why would a company blog?

According to Investors Business Daily, “45% of the largest 1,000 publicly held companies in North America have blogs or plan to start them sometime this year.” So why would a company want to blog? A blog enables ongoing two-way conversations.

With the rise in popularity of blogs in 2004 senior management caught on to the trend and by January 2005 several types of organizations, small startups and Fortune 500 companies had started using blogs to communicate with their stakeholders. Some believe this corporate takeover of a tool that was used primarily by Internet enthusiasts will lead to a decrease in the popularity of the medium. Others believe that the use of blogs by organizations will add new voices and vitality to the medium. While many think that blogging might be exclusive to technology companies (e.g. Jonathan Schwartz, COO of Sun Microsystems), a prime example of senior management blogging is GM’s Fastlane blog edited, among others, by GM vice chairman Bob Lutz.

So what are some reasons your company would want to blog? There are six categories of corporate blogs:

Internal Blogs

· Knowledge Blogs

· Collaboration Blogs

· Culture Blogs

External Blogs

· Sales Blogs

· Branding Blogs

· Relationship Blogs

Many may argue “that is my PR firm’s job”. However, we don’t see this as a substitution to your normal PR efforts. Much the way web sites and e-mail marketing are accepted channels to reinforce your message, blogs are that and more. Another major advantage is that blogging costs almost no money. What you save by blogging can be put into R&D, or customer support or investor’s pockets.

So how can corporate blogging help increase your chances of venture funding?

The creation of an external sales blog could have a multi-part mission to market or sell products/services, make citizens aware of public services, get donations for charities or political parties etc. It is really depends on your organization and its vision.

The best advice regarding corporate blogs is not to think of them as sales channels, but as disruption channels. This is much more effective because with disruption, it is about creating new and different stories that people want to hear. The best stories have market disruption built in.

Here is another example. Blogs make telling a story easier. When customers can follow your blog, they know what your product is trying to accomplish and they value it might have for them. As a matter of fact, when you meet with them they might be so knowledgeable; they will ask you where to sign on the dotted line.

If you are not familiar with blogs or would like to learn more about how your company could start blogging, contact me to have a 15 minute conversation.

Written by Steven Fisher on February 11, 2006

The only problem is that VC’s are going to be sick of hearing Web 2.0 this and Long Tail that.

Check out the article here.

Written by Steven Fisher on February 10, 2006

This first is on giving good presentations.
Many of you have heard of Guy Kawasaki.

He has a long history as a guru on Entrepreneurship.

I just read Guy’s book “Art of the Start”. I recommend that you all run, not walk to the nearest book store and pick up a copy.

When Guy presents, his presentations almost always follow a “top-10″ format — essentially ten slides and ten major ideas. That’s it. Simple.

One of the things I learned about in the formative stages of my career was public speaking. I learned by watching lots of presentations, and one thing I figured out early on is that most CFO-level speakers — particularly CEOs, particularly male CEOs—really suck as speakers.

To help with this, Guy has come up with the 10-20-30 method for giving venture presentations.

10 Slides
20 Minutes
30 Point Font

Simple? Try it with your VC pitch presentation. It is harder than you think.

Once you do it, your future investors will thank you for it.

Written by Steven Fisher on February 9, 2006