Most blogs and books about startup companies are focused around “How to be a CEO”. The Fundable Startup takes a completely different approach. It argues, “Unless you are a seasoned CEO, you should find a fundable CEO, instead of trying to be the leader yourself.”
The Fundable Startup makes the case that VCs prefer to back CEOs with previous successes and that it is not possible to compress the 15-20 years of experience needed to create a seasoned CEO. So a startup company’s best chance of getting funded is to retain a CEO with a history of success.
The methods outlined in The Fundable Startup have been proven to work. The author has successfully implemented the process successfully in multiple companies over many years. Moreover, the author has observed the experience of hundreds of founders that have tried to lead their own companies without success.
Learn more at www.TheFundableStartup.com
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LIVESAFE WINS PRESTIGIOUS NVTC HOT TICKET AWARD
Mobile safety platform honored by Northern Virginia Technology Council
ARLINGTON, Va. (June 24, 2016) – LiveSafe, the world’s leading mobile safety communications platform, has been honored by the Northern Virginia Technology Council with the prestigious Hot Ticket Award for consumer and enterprise innovation.
The NVTC Hot Ticket Awards, which celebrate the region’s best and brightest entrepreneurial technology companies, were announced Thursday at an awards ceremony at NVTC’s CEO Bobbie Kilberg’s home in McLean.
LiveSafe, a platform that focuses on providing actionable crowdsourced intelligence gathering for security officials, has clients including Hearst and Cox Communications and recently received a $5.25 million investment from an affiliated entity of FedEx Corp. Chairman, President and Chief Executive Officer Frederick W. Smith.
“Our mission at LiveSafe is to make the country safer by empowering people to have a say in their safety and security, so it’s a tremendous honor to have our work recognized by the NVTC,” LiveSafe CEO Carolyn Parent said. “The credit for this award goes to the entire LiveSafe team, who are proud to be a part of the Northern Virginia technology community.”
LiveSafe enables two-way, real-time interaction between individuals and security and facilities teams. The convenience of using a smartphone to ask for help is a game-changing way to open up communication on safety- and security-related concerns. Users can send text, photos, videos and precise location information to report incidents ranging from routine maintenance needs to suspicious activity to safety threats.
Businesses, hospitals, malls, college campuses and large sports and entertainment arenas use LiveSafe’s platform to create a safer environment for employees and customers.
About LiveSafe, Inc.:
LiveSafe is the world’s leading mobile safety communications platform delivering actionable crowdsourced safety and security intelligence, preventing incidents before they occur and connecting people to the help they need. LiveSafe is used by Hearst, Cox Communications, the San Francisco 49ers and many other companies. Follow LiveSafe on Twitter @LiveSafe, and learn more at LiveSafeMobile.com.
The following are examples of speaking topics for Fred M. Haney:
Why Your Startup Needs to Hire an Experienced CEO NOW!
If you’re starting a new company and your vision is to create a blockbuster success like Yahoo, Google, or Facebook, you should probably hire an experienced CEO. There are some very successful “founder-led” companies, but they are the exception. Most venture capital firms will want your CEO to have previous success in a related industry. It is a popular misconception that founders can be taught how to be successful CEOs. Most good CEOs needed 10-20 years to earn their stripes, and that process cannot be compressed into a few months.
What Does it Mean to “Attract Capital” to your Startup Company?
Too many startup company founders make the mistake of cobbling together a business plan and spending months approaching investors, only to discover that they don’t have what investors want. Believe it or not, the best companies “attract” capital like a magnet. Investors know a good deal when they see one. So instead of spending lots of time writing a business plan, spend your time creating a company that will attract capital. Here’s how.
Startup Companies: The Secret(s) to Success
First you need a clear and realistic vision for your product. What is it’s real value? Why will they buy it? Why will it be better than the competition? Then you need a “survival” strategy that defines how far you can take the company without capital — i.e., a “no capital” approach. The farther you can take your company without raising capital, the greater the value and the lesser the risk you will present to investors.
What is “Company Building?”
“Company-Building” can be thought of as different from entrepreneur-ship or “Building a Business.” What’s the difference and why is it important? Many successful businesses are managed by a small number of entrepreneurial people. Not all businesses require the building of a company. But if your vision is to raise venture capital and build a “blockbuster” company, you will need a management team with extensive “company-building” skills. These skills involve creating and managing a multi-level organization, a team of C-level executives, and strategies for raising capital and sustaining a competitive position in your markets. Most executives with the necessary “company-building” skills, obtained their talents from 10-20 years of hands-on management experience.
Lessons from both sides of the table: A Venture Capitalist Turns Entrepreneur
Having been a venture capitalist and angel investor for thirty years, I have a pretty good idea what investors are looking for in a startup company. When I am on the “company” side of the table, I try to create companies that meet the needs of investors. The trick is to build a strategy, a management team, and an operating plan that will show investors how they can make an attractive investment return within their risk tolerance. Most entrepreneurs are not able to think like investors, and they end up making the same mistakes. Think like an investor and avoid the common errors.
Venture capitalists see hundreds of business plane, and every year they hear dozens of business plan presentations. Venture Capitalists’ dirty little secret is that a business plan presentation contains many “subliminal” clues that belie the sophistication and experience of a company’s management team. The most common error is, “We only need 1% of the market. To be successful.” This “clue” and others can be fatal mistakes. Why? And how can a company avoid this mistake?
Top Ten Strategic Killers of Startup Companies and How to Avoid Them
Why do so many startup companies fail? Founders often assume that “business is intuitive and easy.” Nothing could be farther from the truth. Startup businesses are fragile. Sometimes a single miscalculation can be fatal. Common errors? Not raising enough capital. Over-spending. Hiring errors. Errors in corporate structure. A poorly written shareholders’ agreement. Over-estimating market demand. Under-estimating competition. Taking advice from people with limited company- building experience. Failures to consult a CPA or lawyer on critical issues. What’s the best way to survive these “potholes?”
The Karma model of career paths.
Haney Karma Career Model. Experience sticks to you in unexpected ways. Don’t over-think your career. Do things you are good at and enjoy; and keep learning. Learn from my journey from mathematician and computer scientist to spinout expert and biotech entrepreneur — without ever “jumping tracks.”
The Many Hats a Venture Capitalist Wears
Fred uses about a dozen props (hats) to illustrate that a venture capitalist plays many roles, including financier, executive, demolition expert, bull fighter, soothsayer, technologist, networker, detective, fireman, cowboy, vulture, and magician.
Radio Talk Show. In 2006, Fred wrote “My Doggie Says… Messages from Jamie,” a collection of color photographs and stories about his Golden Retriever Jamie’s behavioral communications. In 2007, Fred started broadcasting the “My Doggie Says…” Radio Talk Show on KFNX, in Phoenix. The show continued until 2012, when Fred’s Venture Management workload demanded more of his time. He continues to record an occasional podcast on topics related to dog communication, dog intelligence, dog training, and dog rescue. During the four years of the show, Fred interviewed many of the top dog trainers, authors of dog books, and personalities in the dog business. Guests included authors Dean Koontz, Ted Kerasote, Garth Stein, TV personality David Frei, Numerologist Glynis McCants, President of the American Society of Dog Trainers, and President of the American Humane Society, animal psychic Val Heart.
Monday Club is a group of over 500 High Tech Executives and Business Professionals in Southern California who meet once a month to help start-up companies raise their first investment capital. Members have extensive experience in working with high tech companies. They know what it takes to make a good presentation, and they know what investors are looking for.
Chapters. Monday Club was founded in Orange County in 1984. A second chapter was formed in the “South Bay” of Los Angeles in 2010. The Silicon Beach Monday Club began holding monthly meetings in Santa Monica in October, 2013.
Monday Club Founded in 1984. The original Orange County Monday Club was formed in 1984 by Fred Haney as an informal “Sidecar Fund” for 3i Ventures California, the venture capital fund he founded and managed from 1983 to 1991. Monday Club was a way of bringing seasoned high-tech executives and experts into the 3i Ventures Family. No investment was involved, but Monday Club functioned in much the same way as a “Sidecar Fund” or “Technology Fund” affiliated with a venture capital firm. It was a way of assembling company-building experts to help early stage companies in fundraising, making key decisions, finding advisors, and networking in the high-tech community.
Presentation Model. Monday Club’s goal is to help businesses improve their chances of fundraising success by providing informed feedback and helping them find advisors. Each member fills out a one-page “feedback sheet” that grades the presentation both qualitatively and quantitatively on major criteria.
Meeting Format. Meetings are from 11:45 am to 1:30 pm one day per month. Each presenting company has 35 minutes for its presentation, including feedback and Q&A. Monday Club has helped about 400 companies to improve their presentation and/or identify investors or advisors. Periodically, past presenters provide a “status update” that allows the members to see how companies are progressing.
Sponsors. Orange County Monday Club is sponsored by Knobbe, Martens, Rutan & Tucker, and KPMG. South Bay Monday Club is sponsored by Raimondo Pettit Group Accountants, PDM CPAs, California United Bank, The Law Office of Brandon S. Chabner, Parker Mills, LLP Business Lawyers, Petillon Hiraide LLP Business Lawyers, Los Angeles Biomedical Research Institute. The South Bay Meetings are held at the Toyota America Historical Automobile Museum. Sponsors for The Silicon Beach Monday Club are Bryan Cave, LLC and Cooley, LLC. Sponsors take turns providing lunch for the monthly meetings.
Membership. The three groups have a combined membership of approximately 600 people. Average attendance in Orange County is around 30; in South Bay, about 20 and growing; in Santa Monica, 20 and growing rapidly. Growth is organic; members are encouraged to bring guests and new members are added by referral. The only “criteria” is an ability to provide useful feedback to our presenting companies. Monday Club is not a general “business leads” network; it stays close to its purpose. Nor is it specifically an “investment” organization, although in Orange County, many members are also members of Tech Coast Angels (of which Fred Haney was a co-founder in 1997).
Benefits to members. Members see two early stage business presentations each month. Companies are chosen to present based on “venture capital” investment criteria and their topical and educational nature. As members meet the other members, they expand their own network of professionals who help build new companies. Finally, members may find client companies that they can help as directors, advisors, or investors.
No Fees. No fees are involved in Monday Club. Members are not charged for meetings. Presenters are not charged a fee.
Web site. The web site (www.mondayclub.com) was reconstructed in 2013. It serves as a “brochure” to explain Monday Club to interested parties. It also contains useful resources, including a PowerPoint outline, suggestions for presentations, and the “feedback sheet.”
Meeting Schedule. A meeting schedule is prepared for each of the three groups at the beginning of the year. Meetings with presentations are held from January through November. In December, each group enjoys a no-host social luncheon in a local restaurant. Past venues have been the Wine Cellar at the Ritz Restaurant in Newport Beach, the Palos Verdes Golf Club, and 41 Ocean Club, Santa Monica.
Monthly Invitation. At the beginning of each year, members receive a schedule of meetings. An invitation/reminder is emailed to members about a week in advance of each meeting. The invitation summarizes the two presenting companies and gives detailed location information. Invitations are sent by “bcc” to members.
About the Founder. Fred M. Haney, Ph.D. is a venture capital fund manager, private investor, and entrepreneur. He cofounded NovaDigm Therapeutics, Inc. where he served as Chairman of the Board.
Start up companies turn dreams into reality. The most successful ones start with a truly big, or disruptive, idea; a concept that will significantly change the way something is done.
Successful startups solve a compelling problem; they come up with a way of doing something that does not presently exist. They might solve a problem that has never been solved before. Or they might come up with a better solution than existed before. But “better” can’t mean “just a little bit better.” It has to mean “enough better to compel customers to buy the product.”
The most successful start ups have a protected idea. They have an idea that cannot easily be copied by their competition. This might mean the idea is covered by patents. Sometimes it means that portions of the process are trade secrets and cannot easily be reinvented or reverse engineered. One way, or another, the company should have a sustainable “unfair competitive advantage.”
Successful startups have a product or service that customers will feel compelled to purchase. They also have effective strategies for building a management team, developing the product or service, marketing the product or service, positioning the product or service with respect to competition, sustaining their competitive advantage, and financing all of their capital needs.
The bigger and more disruptive the idea, the better the company’s chances of attracting the necessary investment capital. Investors like ideas that have the potential for supporting large companies with substantial prospects for either an initial public offering or an acquisition by a large corporation. That’s how investors make their “return on investment.”
The best start up companies don’t raise capital; they attract it. They build such a compelling investment opportunity that investors actually seek them out.
You are more likely to hear about an inventor who has a good, idea writes a business plan, and pounds the pavement trying to raise capital from reluctant investors. This is not the best recipe for success.
Investors are smart people. They are constantly looking for good investment opportunities. They don’t just respond to people who knock on their door.
The best way to get the attention of investors is to come up with a really good, disruptive idea, document it well, develop compelling strategies for taking it to market, and build a top quality management team with a blend of entrepreneurial enthusiasm and past success — all managed by a high-quality CEO with a track record of previous success.
Investors are very risk-aware, so you need to do everything you can to reduce the risk of your proposition. Prove the concept. Develop your product. Make a few sales. Create a few happy customers. The farther you take the company without capital, while reducing risk and creating value, the better your chances of raising equity capital and the higher your valuation is likely to be.
When you do write your business plan, make sure that your capital requirements are tied tightly to specific milestones that need to be achieved. Identify major tasks. Put them on a timeline. Figure out how much capital is required to achieve the major milestones and run the company for about 18 months. This way you’ll be achieving your major milestones, creating as much value as possible, and reducing risk as much as possible. This way, you raise enough capital; you don’t raise too much, and, if you achieve your milestones, you increase the value of your company at every capital raise.
The most successful start up company management teams contain a workable mix of entrepreneurial vision and seasoned, successful management experience.
It’s rare that one individual combines both the entrepreneurial vision and the necessary management success. Sometimes the ideal combination is the vision of a founder and the previous success of an experienced CEO.
Build your additional management team around the tasks required to start your company. Often these are technical tasks like product development proof-of-concept or product testing. If you think you can get some early sales of your product or service you might want to recruit an experienced sales person. You can probably save a Chief Financial Officer or VP of Manufacturing for later. These are usually area where a startup need only a modest amount of help.
The excitement of a start up company and the opportunity to create wealth through stock options are often all you need to compensate your initial team. Startup companies often operate for a year or two with a management team whose only compensation is equity. Obviously, your team members expect to receive a salary sometime in the future, but that might not happen until the company is able to raise equity capital.
If you expect to raise capital from venture capitalists or angel investors you will want to build your team with people who have documented success with closely related products or services.
The most important member of your management team will be the CEO. Investors will look to the CEO as the focal point for all activities. They will expect the CEO to manage the company — to provide leadership, develop an effective plan, recruit the necessary team and manage the company’s finances.
Investors prefer to invest in CEOs who have successfully managed companies with related products or services.
We all know the stories about wildly successful entrepreneur/founders who create massive wealth. Steve Jobs. David Packer. Bill Hewlett. Gordon Moore. These are rare exceptions. Most successful startup companies are managed by CEOs with previous experience and success. Sometimes venture capitalists bring CEOs into companies. Some venture capitalist even have “executives in residence” on their staff.
Only rarely do venture capitalists invest in companies whose founder is also the CEO. Successful CEOs are usually the product of 10-20 years of management experience. Venture capitalists generally do not want their funds to be used for on-the-job CEO training
Getting the right CEO for your company is a tricky “chicken and egg” problem. It’s hard to attract a top-quality CEO if you don’t have funds, but it’s even harder to get funding without a top-quality CEO. Sometimes it takes a lot of creativity to entice a top-quality CEO who will work (temporarily) for no salary and who will be able to attract equity capital.