1. Can you handle some straight talk about the great American venture or angel capital pursuit?

2. Would you buy a cheap entrepreneurial "insurance policy" to protect yourself against wasting the next 6 to 12 months in a futile capital raising campaign, if you could?

If you answered yes to both or either, read on about The Smart Startup Guide^TM.




Part 1: The Bad News

Before Embarking on a Campaign to Raise Venture Capital Funding, You Should Look at Yourself Objectively and Honestly to Determine if You Even Qualify.  Most People Don't Stop to Do This.

If as with the vast majority of venture capital hunters you don't qualify, you will in most cases end up wasting 6 to 12 months of your life writing a business plan which is never read and doing "dog & pony" shows for audiences who are at best only mildly curious or at worst engaged in "brainsucking" you for ideas.

Who Qualifies for Venture Capital Today?

Venture capitalists, like winning horse track gamblers,
bet on the jockey not on the horse.

Industry "stars" qualify for venture capital. This means someone who has taken a start-up from zero to 100 million in sales. So if you're counted amongst the stars in your industry, you stand a good chance of attracting venture capital provided your current deal has the following elements:

    * at least 2 other senior executives with experience in building wildly successful companies,
    * a proprietary technology in a sector currently considered hot by the venture capital industry,
    * a top-notch technical team,
    * a target market at least one billion dollars in size,
    * a minimum of two years of rising sales to blue chip customers.

It you don't meet the above criteria venture capital funding won't happen. Yes, the venture capital profession is now overcompensating for the really dumb investments it made funding green MBAs during the dotcom insanity.

Yet most first time capital raisers waste 6 to 12 months polishing and presenting business plans which in most cases are never even read let alone seriously considered. Their mistaken belief is that somehow a "great" business plan will make up for all the other missing elements required by investors.

Let me repeat this important point. If your name is not synonymous in the minds of financiers with huge, almost obscene, profits, your plan will be accepted politely but never actually read beyond the "team" section.

If you haven't made big money for investors and don't have any close relatives running venture capital firms, you should read on.

The Three Dirty Little Secrets About Raising Outside Capital

Let me share with you three secrets about raising capital which almost no one else will.

    * First, chasing outside capital is by far the most unpleasant and drawn-out ordeal experienced by entrepreneurs. It always seems to take "forever". (For this reason, veteran entrepreneurs try to avoid raising outside capital at all costs.)

    * Second, based on the fact that your typical early stage venture capital firm invests in only one company out of every 500 business plans it reviews, your odds of succeeding are only 1:500. (If you are pursuing angel investors your odds improve to maybe 1:200, although no one knows this number for certain.)

    * Third, in about 50% of instances where an early stage company actually succeeds in raising venture capital, the founder is fired within the first year and kisses his or her stock good-bye. Even the Wall Street Journal pointed this out in a article by Barnaby Federer from 09/30/02:

  "If you ask a VC what value they add, and you get
them after a few drinks, they'll say, 'We replace the CEO' ",
he said. And that, he indicated, does not vary
with the economic climate.

So your odds of being a successful venture capital-backed  founder/CEO are actually only 1:1000.

    * Realist: "With those long odds I need to have a Plan B for launching my company."

    * Dreamer: "Yes, those are very long odds but they apply to the other 499 guys, not to me."

The Smart Startup Guide covers two dozen other reasons why no sane entrepreneur accepts venture capital other than as a last resort doomsday response.


The Funding Problem

Here's what typically happens when a company needs to chase outside capital in order to commence or expand operations. After about 6 months one of three things occurs:

1. The lucky few (i.e., the 1 in 500) find investors to fund them.

2. Most are not successful in raising it and die on the vine as a result. In most cases, the wannabe entrepreneur simply abandons the project and moves on to something else. (As the joke goes, "That's why God created 'jobs' ".)

3. A savvy and tenacious tiny minority of entrepreneurs finally gets mad at having wasted so much time. Then it begins to figure out a creative way around the funding problem by focusing on creating cashflow with the resources and opportunities at hand instead of continuing the futile quest for outside capital.

Remember this third scenario. We'll come back to it shortly. Necessity truly is the Mother of Invention.


The Entrepreneurial Learning Curve

Here's why so much time is wasted in a futile quest for outside funding by so many entrepreneurs. It's the Entrepreneurial Learning Curve. Picture a curve rising from left to right on a graph. The horizontal axis represents time and the vertical axis represents entrepreneurial savvy.


 

Everyone starts at bottom left where they naively believe that a well polished business plan will magically compensate for a verifiable track record of making previous investors rich as well as a lack of strong personal relationships with venture capitalists and other investors. So they waste months writing it and then begging strangers for money.

At top right the emphasis is not on sitting around agonizing over the wording and punctuation in the business plan but rather on taking action in the present. This is where real entrepreneurship starts after people get mad at having wasted so much time chasing financing dead ends. This is where the survivors finally begin to emerge and achieve traction.

Unfortunately, it takes the average entrepreneur about 6 to 12 months of endless business plan editing and dog & pony shows to polite but ultimately uninterested investors to finally figure out the reality about trying to raise capital.

So why all this emphasis on writing a business plan? Simple answer: everyone wants to be helpful but they haven't a clue as to what's really involved in being an entrepreneur.  So they rely on the safe old cliché: "First write a good business!" This advice is as helpful as telling someone planning a climb up Mount Everest to, "Be sure to wear your mittens!"

[Fully understanding your business model is another issue...one of critical importance for success. But that's a topic for another page of this site.]


America's Fastest Growing Industry?

This problem of capital scarcity for early stage companies is so prevalent that you may have begun to notice that there are literally thousands of people in the business of "helping" entrepreneurs raise money. At least that's what they lead you to believe.  They have taken their cue from the Gold Rush when the truly crafty business-people made money not through prospecting but by selling shovels to the prospectors.  Likewise, today's money-raising services have found a low risk means to separate the cash-starved entrepreneur from any money he or she may have left. They do so in many ways:

    * Matching Services: We'll match your project with one of our many accredited angel investors. Call now! Operators are standing by! Just $199 to register.

    * Business Plan Services: We'll write a business plan for you which will attract funding. Only $999.

    * Finders: I can help you raise money for a fee…and, by the way, I require a retainer up-front.

    * Money Raising Bootcamps: Attend our weekend bootcamp for $1,195, and you'll discover that it's not what you know but who you know that counts when it comes to raising money.

My two personal favorites are:

    * Online Business Plan Repositories: Post your b-plan on our site for 6 months. Only $59.

    * Venture Capital Directories: VC's are waiting to fund you! For just $49 you can buy our CD directory with 12,952,734 venture capital firms listed on it. (How these can sell in the age of Internet search engines is beyond me. PT Barnum was correct about a sucker being "born every minute".)


In a nutshell, most of these middle-man services don't work in 99% of instances. This is also why they won't tell you the Three Dirty Little Secrets of Raising Capital.

Lesson: put very little faith in these services and never pay up-front fees.


The Rodney Dangerfields of Entrepreneurship

Pretend for a moment that you are a venture capitalist or angel investor. Two founders visit you about separate deals. You ask them each what progress they have made in the 3 or 6 months that they have been working on their respective projects.

    * One entrepreneur answers that he has been able to finish his business plan as well as find a means to generate cashflow in his industry which is being used to move the main project further along. Now he needs more money to fully capitalize on this developing opportunity.

    * The other entrepreneur can only point to the "great" business plan he's polished to perfection over the past 6 months and the "great" opportunity lying before him.

Which entrepreneur would you be more impressed by if you were the investor?  Back in the 1990s I took a 4 year sabbatical from entrepreneurship to run a small business investment fund, so let me share my opinion. The former has shown that he is a doer; the latter has provided nothing in the way of evidence that he can create cashflow--any cashflow.

If you are not a recognized star when knocking on investor's doors, you'll quickly start to feel as if you "can't get no respect".

Lesson: cashflow wins far more respect from investors than the "great" business plan.  If you are not an industry star you can begin to build your credibility up by finding a means of creating cashflow in your industry.

    * Realist: "I need to prove myself first as an entrepreneur, then people will give me money."

    * Dreamer: "People need to give me money first, then I'll prove myself as an entrepreneur."

Dreamers as usual have it backwards.


Real Entrepreneurship is About Cashflow Creation

It's all about positive cashflow. If you can make it happen, you get respect and investors to fund you so that you can make even more.

At some point in the mid-1990s real entrepreneurship became subverted into merely writing a business plan, developing a Powerpoint presentation, scripting an "elevator pitch", and then pestering skeptical strangers for money. With the entrepreneurial bar thus lowered almost to the ground, seemingly everyone declared themselves an "entrepreneur" and tried to hop aboard the dotcom express.  However, real entrepreneurship is not about these things at all. It's about making cashflow happen now.

Never forget that.

Repeat three times daily until the delusion goes away:

    With cashflow I'm a somebody; without it I'm a nobody.
    With cashflow I'm a somebody; without it I'm a nobody.
    With cashflow I'm a somebody; without it I'm a nobody.

Fact: Successful entrepreneurs invest the same level of time and energy into creating cashflow during the first year that wannabes invest in polishing their business plans and offering them to complete strangers.


Let's Summarize the First Half

Lesson 1: Money goes to entrepreneurs with proven track records as money makers for their backers.

Lesson 2: The other 499 capital chasers typically end up just wasting 6 to 12 months of time and effort on a capital raising campaign doomed from the very start.

What's the range of reaction to this harsh reality?

Proven Industry Star: "Who cares?! Vinod just left a v-mail saying Kleiner is pumping $10 million into our "A" Round. I'm outta here!"

Dreamer: "I know the odds are against us. But wait till you see our business plan. It's gonna be grrrreat!"

Future Industry Star: "We need to by-pass this chump's game altogether for now and get some traction first. "

Ask yourself if that entrepreneurial insurance policy is starting to sound like a good investment.



Part 2: The Good  News

The Solution

To be honest, there is no one guaranteed solution to the funding problem which all entrepreneurs face.  However, a clue lies in the third point from above. Recall that it read:

[At the 6 month mark]: “A savvy and tenacious tiny minority of entrepreneurs finally gets mad at having wasted so much time. Then it begins to figure out a creative way around the funding problem by focusing on creating cashflow with the resources and opportunities at hand instead of continuing the futile quest outside capital.”

Yes, the big break-throughs usually come after about 6 months of banging your head against the funding wall. That's when a few entrepreneurs finally awake to the fact that outside money is highly unlikely to come and that they have been wasting precious time futilely chasing it. Most of us need to get mad first about a problem before our creative juices really start flowing.

Ask yourself this: What if we had a time machine right now which enabled us to fast forward to a future point where we too finally figured out what the successful entrepreneurs know about creating and building companies? This is precisely what The Guide does for you. It transports you at least 6 months up the Entrepreneurial Learning Curve to a point where you begin to think and act like the savvy entrepreneurs who succeeded because they figured how how to do it without outside capital.

If we look at the companies which qualify for those annual lists of the fastest growing companies, we see that over 95% were unfunded at start-up beyond a nominal injection of the entrepreneur's own money (in most cases, less than $10k). Most didn't even have a business plan. Why did this minority of unfunded entrepreneurs succeed while most start-ups seeking capital die on the vine or morph into something completely different—that is, something more do-able after 6 months?

To answer this question, let me use an analogy. Think of entrepreneurs as being a bit like chefs. Some chefs are very rigid in their style requiring that a specific list of ingredients be delivered to them before they can start cooking. This rigidity is fine as long as you are not too hungry and can wait for the required ingredients to arrive. However, if you are hungry now and lack the cash to buy more groceries, you will need to be flexible and work with what you have.

Other chefs, the more flexible and entrepreneurial ones, will not wait for someone else to deliver a bag of groceries to them, but will instead immediately begin to search the pantry, refrigerator, and vegetable garden for what's available. They then use the items at hand to create a feast.

    * Realist: "I need to come up with at least 3 different ways to get this show off the ground."

    * Dreamer: "It's preposterous to even suggest that this venture can be launched in any other way than the one outlined in my business plan. I scoff at such notions."

It's been said that true entrepreneurs are the artists of the business world. They create new businesses and products seemingly out of nothing. It's awe inspiring to watch a true entrepreneur formulate an idea and then begin making it happen within hours rather than sitting around for months writing business plans and pestering strangers for money.

In a nutshell, the successful cash-strapped entrepreneur designs a transitional business model for the launch which can be described as “Heads I win; tails I lose very little.” Once their concept has some degree of traction, they can then choose to talk to venture capitalists from a bargaining position of true strength.

The Guide introduces a systematic new way of thinking about start-ups called the Smart Start-up Model. The Smart Start-up Model applies the latest in business modeling research conducted at Harvard Business School to help you quickly create positive cashflow.

Once you have cashflow life becomes much simpler. Cashflow not only enables you to pay your bills but it places your company into the “stream of opportunities” that established businesses enjoy. Cashflow also earns you respect and gives you the ability to say, "No thanks!", to those notoriously outrageous offers made by venture capitalists and some private investors.

Why Does It Work?

The Guide's Smart Start-up Model distills the lessons of America's most successful start-up companies for you to use in your venture. You can use the model as a screen to evaluate your current strategy for viability. If it doesn't pass the test, you can use the model to deconstruct it and formulate a stronger new strategy.

The Guide contains hundreds of strategies and tactics used by successful entrepreneurs to both launch without outside capital and retain control of their companies. It shares "war stories" which illustrate how entrepreneurs think and react to circumstances which would force most others to give up and look for a job.

The Guide is the next best thing to sitting down in person with a group of entrepreneurs who succeeded in starting their companies without investor funding and having them share their knowledge with you.

Some people need to learn the hard way, while others don't have the time to do it this way and prefer to learn from the mistakes of others. I belong to the latter group. Why should I make the same rookie mistakes as others when I could instead learn from those who did it the right way before me?

Peter, How Did You Get to Be So Gosh Darn Smart About Startups?

Glad you asked that question!

It all comes down to three things: experience, experience, and more experience. I have personally launched six companies over the past 20 years. In addition, I have acted as an advisor or consultant to hundreds of other entrepreneurs over that time. Finally, although not an academic, I enjoy researching what makes startups successful and then teaching the lessons to others through the Guide or in live classes.

I started researching a "better way" to launch and grow a company over its first year after doing my very first venture capital deal in 1987.  It was akin to being mugged in a dark alley. There truly had to be a better way. So I began paying attention to what other entrepreneurs were doing. Quickly I noticed something peculiar about entrepreneurs in start-up mode. They can be broken down into two distinct groups

    * The vast majority consists of dreamers who take the naive approach to business in that they spend a few months at first writing a business plan. Once it's polished and ready for circulation, they begin to look for investors, and look, and look, and look, ad infinitum. In most cases, the money is never raised and the dreamer has nothing more to show for his or her efforts than 6 to 12 wasted months, a stack of unpaid bills, and a fuming spouse.

    * The tiny minority announces its intentions to go after a given market opportunity, and is seemingly magically, in business a month later without raising a dime of outside money. Sometimes they choose to take VC funding later--on their own terms--and just as often they choose to avoid it completely.

This second group has always fascinated me. Just what was their magic start-up formula? Some of its members end up on the annual lists of America's fastest growing companies. Many turn into far more viable companies than their VC funded competitors according to Jim Collins of Built to Last fame.

How did these companies start without outside capital of any type, whether angel or venture?  Since the mid 1980s, I have been an entrepreneur, consultant to high technology companies, and mentor to rookie entrepreneurs. As a result I have either personally tested scores of different start-up strategies or observed their use by others. In 1995 I began to put the successful  strategies down into this manual and sell them to my fellow entrepreneurs. In 2002, I came across research conducted at Harvard Business School on start-ups which fully backs up the model I began developing through trial and error back in 1987.


The Value Proposition to You

Reading The Smart Startup Guide is akin to spending a week with the founders of these successful fast growth companies. Imagine being able to pick their brains and learn how they formulated their strategies for fast start-up and growth.

Just think how much this knowledge would be worth to you. On average, it will help you to save 6 or more months of your life from being wasted going down dead ends in a futile pursuit of outside capital.

Would this knowledge be worth $500 to you? At the very least, if you are truly serious and not just a dreamer as most people are. It could even be worth $5000 to you. Or much more.

You can learn now how to start-up the right way by investing in The  Guide. It's akin to stepping into that time machine mentioned earlier and fast forwarding to a future in which you know the secrets of entrepreneurial success.

Some people need to make their own mistakes and learn the hard way. However, others can't afford to waste time and money and prefer to learn as much as possible from others who succeeded before them. The Guide is for this latter group.


Executive Decision Time

Think of the Smart Startup Guide as your entrepreneurial insurance policy which will ensure that you don't waste 6 to 12 months of your life. It may help to quantify the value you will receive. So think of it this way:

Ask yourself how much your time is worth on an hourly basis. If your time is worth $25, then you multiply that rate by the number of hours you plan to devote to your company over the next 6 months.

$25/hour X 20 hours per week X 26 weeks = $13,000

$50/hour x 20 hours per week X 26 weeks = $26,000

Now compare that investment with the price of this insurance policy.


In a Nutshell

To recap, the benefits of this manual for your business are:

    * It will teach you to think like a savvy veteran entrepreneur who focusses on cashflow creation rather than on begging for money from strangers.

    * It can drastically reduce the amount of capital needed to launch.

    * It can help a company begin to generate cashflow before any funding occurs.

    * In some cases, it can eliminate altogether the need for outside capital.

Discovering and using any of the lessons contained in the Guide will set you as much as a year ahead of other start-ups.

Cashflow = Respect from Investors

And if you are still committed to raising outside capital because you positively absolutely need a huge sum of capital to build that new state-of-the-art atomic-powered widget factory, you will still benefit from the Guide because:

    * Cashflow--any cashflow--earns respect from investors, lenders, customers, suppliers, and even your Aunt Mabel.

    * Cashflow will place you in a stronger bargaining position with potential investors since it will allow you to walk away from a bad deal. Pre-deal cashflow equals power. Power for you.

    * Cashflow will give your company a higher valuation which in turn will allow you to hold onto more of your equity if a deal is done.

If you are truly committed to building your business then do everything you can today to achieve this goal. This includes quickly learning the secrets of America's top entrepreneurs for launching a business now.

If you're a realist you will try the Guide. Dreamers will continue to believe that other entrepreneurs don't have anything to teach them and that it's all about writing that "great" business plan which will miraculously convince people to throw money at an unknown.

Don't kid yourself.

So ask yourself, in 3 months from now do I want to:

    * still be polishing my business plan and chasing investors with nothing to show for my efforts, or
    * do I want to have an operating company with positive cashflow?

The decision is yours. (If you decide not to invest in the Guide at this time, please bookmark this page for later reference.)

Yes, you can order on weekends!

To invest in the Guide in PDF (electronic version) format readable with a free copy of Adobe Reader for only $59.95, click here:




How quickly do I get the Guide? 

After ordering, you will receive an email with links for downloading your copy of the manual which comes in three seperate PDF volumes.  It can take anywhere from two hours to half a day to receive the download links. In 90 percent of instances, buyers receive their links within 2 hours. Please be patient as it's not an automated process yet.


What will I need to open the files?

Do you have the necessary Adobe Reader Ver 6 installed? If you don't have Adobe Reader ver. 6.0, you can download it for free here. Installation is fast and easy. After installing it, test it again.

Have a technical question regarding your purchase? Write to us at info@antiventurecapital.com



You can pinch pennies and try to get all this information for free as I did at first. It maybe do-able but will take you five years to learn just 1/3 of the high level entrepreneurial strategies and tactics contained in this document. Or you can smarten up, invest in a copy, and instantly turbo-charge your startup. I've purchased other courses selling for 3 times as much and did not find them anywhere near as helpful.                                                                  Ted Fierstein

This is how MBA finance and Entrepreneurship courses should be taught. The manual teaches you how successful entrepreneurs like Bezos fine-tune their business model to whittle down the funds needed while at the same time maximizing their odds of succeeding.
                                                                                                    Geoff Reilly, San Jose

After successfully building a company from startup in 1995 to $3mm+ in sales and a successful acquisition in 2000, I then (against my better judgment) spent the next few years trying the standard "create business plan, get funded" approach to startup.

Unfortunately, the quote on the home page sums up the result of my experience "Entrepreneurship is not about wasting 6 to 12 months of your life walking around with business plan and begging bowl in hand. It's about creating cashflow quickly. Positive cashflow." The "write business plan / beg for money" approach wasted 2 years of my life.

When I finally stopped wasting time pitching "great ideas" to VC's and other potential investors, and went back to basics and built cashflow (like the book recommends), I got back into the entrepreneurial zone and began to build a highly successful company (currently top 1% of the web).

I strongly recommend this book to any entrepreneur considering starting their first venture (or 2nd, or 3rd, as a refresher). It helped me better internalize the lessons learned from wasting time on business plans and funding meetings; and got me fired up again about being a real entrepreneur.
                                                                                                                           Anon

Most first time capital seekers pay the 'Dumb Tax' also known as learning the hard way. This book has the best collection of strategies for avoiding paying it ever put together.
                                                                                                   MW, Vancouver, WA

Your approach is a shock to the system initially as you show that everything new entrepreneurs are told about business is wrong. But within a few days it began to dawn on me that this is how it's really done in the real world by the successful few.
                                                                                                  Joe Nardi, San Jose

This financing manual offers the entrepreneur a smorgasbord of creative real world financing techniques to launch and grow almost any type of business. Some will find a few of them controversial. But get over it, folks, all will work.
Too bad they don't teach you these in Business School.
                                                                                            John Anderson, Seattle

An Entrepreneur's Must Read! Practical, trustworthy, real, encouraging are a few of the words that come to my mind after reading this manual. You will get a lot out of this. A Harvard MBA in 130 pages: business models, finance, and creativity all bundled together to help you achieve cashflow now instead of wasting time chasing venture capital.
                                                                                          Robert Carmody, CEO

There is something 'magical' in most businesses that allows them to really make money. If you get the Business Model right, the harder you work, the more money you make. If you get it wrong, no matter how hard you work, you just end up losing more and more money.
                                                                                              Bruce Firestone, Ph.D.

You've got a bright idea. An idea that you think maybe, just maybe, could become a brilliant business. But what next? The Guide is the answer. It takes you through all the crucial stages between those first notes on a napkin to a business that is sound, lasting and profitable. It tells you what the other books don't - the lessons that most people have to learn by bitter experience; the tricks of the trade that all entrepreneurs wish somebody had told them before they set out.
                                                                                                                  AL, Seattle

This is a highly organized, well researched, and pragmatic approach to starting a company based on the real world process of starting and funding a new enterprise. The author does a really great job of defining the key elements for building a successful business with minimal investment. For once, here is a book that actually tells you the secret recipe from taking an idea, and turning it into a successful business. Everyone who knows the author and his success as a Seattle entrepreneur will tell you that the manual is full of substance.
                                                                                                               T Dunton, CEO

Your manual has enabled me to think about start-ups in an entirely new way. It's a practical and pragmatic view of this critical phase. My only regret is having waited 3 months before finally making the decision to buy the manual. Procrastination is a killer!
                                                                                                              MW, New York

The second chapter alone on the Smart Startup is worth thousands of dollars. It shows you how to launch quickly and retain control of your company. JC, Seattle WA
 
Having been exposed to innumerable articles and books on start-ups and capital raising, I expected this manual to be more of the same. Instead, it enters new territory, by identifying the 'right moves' made by successful entrepreneurs...often unwittingly, and so provides those who follow them with a chance to get their start-up formula right. Its strength is in allowing entrepreneurs to learn from the most cutting edge research on entrepreneurship today.
                                                                                                  RB, San Francisco

Ideas can be cheap-- no matter how smart you are, there are right now 35 million Americans in their basements dreaming up the same idea that you have. The difference between dreamers and entrepreneurs is the Business Model-- the place where the rubber meets the road; the place where money sticks to your hands.
                                                                                                  Bruce Firestone, Ph.D.


Still Not Convinced That You Need This Insurance Policy?

If you need to hear the above message from an actual venture capitalist, read this article by Tim Oren on why so few are able to attract outside funding. 

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