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Posts Tagged ‘venture capital’

How to Raise Capital In Today’s Economic Climate

Saturday, August 22nd, 2009

Many people ask me if it’s possible to raise capital in the traditional sense these days.  Everyone knows and understands that lending practices have tightened and many VC firms have gently (and occasionally not so gently) refused to accept any more submissions.  But is it impossible to raise capital? Of course not, it’s just even harder now.  That’s not to say that raising capital has ever been easy, it has always been a challenging process.  If it was an easy process, there wouldn’t be companies charging money to hunt down investors and business coaches priming you for your journey ahead.  www.Ethos360.com will do both of these things.  Keep this in mind, no one can ever guarantee that you will get funding.  It’s an impossible to guarantee, and illegal to make any such claims.

What do investors want to see from you?  It’s certainly not 30 pages of a long winded business plan, especially if it’s a poorly written one.  It’s not an unsolicited phone call from you to take 45 minutes of their time while you wax poetic about your business or idea.  The same logic that says to keep your resume short is the same logic you should take to approach investors with your business.  There are a number of questions that investors need answered, and any entrepreneur answering them must now be in even more concise, with verified details supporting your business claims.  Some of these questions might surprise you, particularly if you’re not well prepared to face investors. 

1.       What is your business pitch? In one sentence.

This sounds easy enough, but too many capital seekers wind up grasping for an answer to this.  What is it that you do exactly? Why is it exceptional?

2.        What is your competitive advantage?

So you built a mouse-trap.  How is it better than other mouse-traps? How do you intend to overtake the current mouse-trap on the market right now?

3.        Define your market.

Who are you selling to? This basically asks you who your customers are, who they will be in the future, how big this pool of customers is, and whether or not this pool will grow in the future.  You will need to be able to elaborate on your answer.

This is list not exhaustive, there are many more questions regarding your marketing and sales strategy that need to be answered, preferably in less than a few sentences. 

In order to better position yourself to get funding, you need to take your feet and put them in the shoes of your audience.  Many entrepreneurs wind up deeply entrenched in the details of their business, they forget that the audience isn’t psychic, or willing to fill in the blanks themselves. Don’t make it hard for them to get these answers.  Investors generally are not willing to pull answers out of you; the onus is on you to give them what they want and need to hear, preferably quickly and in a straight forward manner. 

These questions are just a small tip of the basic questions that investors need answers to.  Consider taking the time to answer these types of questions as the better you know your own business, the easier it becomes to explain it to someone that you’d like as a funding source.  We can open the door for you, but you need to take the initiative to step through prepared and ready to take on the tough questions.

Women In Small Business- The New Leaders

Sunday, July 19th, 2009

Currently, women outpace men in new businesses about 2 to 3. Of this statistic, Latina women in particular are entering entrepreneurial ranks full speed ahead, outpacing every other demographic group.

With these key points in mind, why are women losing ground in the venture capital pool? Less than four percent of venture-backed companies are headed by women. That’s the lowest in ten years.

I’m going to repeat that again: Four. Percent.

Even more depressing is that it’s not looking much better for angel investors. Only ten percent of angel money goes to businesses headed by women. A little better, but not by much.

It’s not that the money wasn’t there at the time of these studies. On the contrary, there were billions in investment dollars available in new venture capital funds and new angel groups sitting around waiting to go out. The current status of these monies is probably a little less readily available which would depressingly make the above statistics shrink even more.

So how come women weren’t getting their fair share? What is keeping us from getting our turn at bat?

The simple answer is that venture capital and angel investment firms are run by men. Anyone who didn’t see that coming, raise your hand.

So the obvious question becomes, “what can we do about it?” It’s been this way since before suffrage and while there isn’t a magical solution, there are some real steps that women can take to make their companies a success.

Bootstrap the Company: Of the companies still standing, well over 90% them are still financed by the owners or “bootstrapped.” It doesn’t matter who’s running it whether it be male or female, this is still the best way to finance a company. If you can’t get it off the ground with your own money, then it won’t make sense to someone to join you in the endeavor to help grow the business. Hire a mentor/business coach with experience launching start-ups. The money saved in avoiding key mistakes alone would more than make up for the cost of such a service. Visit www.Ethos360.com to review their offerings

Incorporate: If you take your business seriously, others are more likely to do so too. Companies such as www.LegalZoom.com can offer up helpful solutions if you’re not sure how to incorporate your business.

Create a Strong Management Team: I usually advise people to look at what is missing from their own list of skills and experience. If you see something missing in your resume that can be filled by an advisor you know or a colleague looking to work with you, add them to your Management Team. A strong and diverse Management Team can show that not only are you staffed with professionals, but that you all bring something different to the table that is important for success. There’s a great website called www.PartnerUp.com that helps entrepreneurs such as you find these connections.

Build a Strong and Competent Business Plan: Remember that the business plan exists to outline the whole project, not just the numbers and the idea. The challenge to you as the entrepreneur is to present the whole package to a prospect and be able to defend every aspect. The idea and the numbers will always be what trip you up, but the management team and the strategies that you will use to meet your financial projections are just as important. Know the plan inside and out and be able to speak without looking at it as a reference.

Network, Network, Network: This will become your least favorite word to hear and say within the first year of start-up. It’s important to remember that you must do this action like your life depends on it since the continued success of your business may well depend on the contacts you manage to make.

Create a Clean and Commanding Presence on the Internet: Just becomes the dot.com bubble burst is no reason to dismiss the importance of a strong web presence. Companies, such as, www.GreenLeafImaging.com will help you define brand identity along with establish and manage your web presence. It has fast become the first place that the modern consumer goes to discover information about you. You not only need to build a strong and functional information page but also strive to keep your reputation clean on the internet. Message boards and blogs can just as easily decimate you as help you if you manage to incur the wrath of disgruntled clients.

Go Straight to the Corporations: Many large corporations have venture capital arms with the sole purpose of identifying and promoting technologies in their fields. Begin research and due diligence by exploring www.TheFunded.com. This might be a way to get in should you have a viable venture that may be company specific and can bypass the usual forms of financing to get off the ground. You may run the risk of losing certain rights to your idea, though, so be cautious.
Promote Your Business Before You Open: Depending on your venture, a little pre-publicity and buzz can bring the attention interested finance people in your area. Start that interest and then strive to maintain it by following through on what you’re promoting in the outset.

Don’t Shy Away from “Women’s Businesses”: Don’t get defensive about taking on a business that is considered a “women’s business”. Salons, patisseries, dress shops, etc. are all extremely viable business models run by women and for women. It’s admirable to want to do something different but if it’s not broken, then why not at least consider it?

We’re all looking down the barrel of the economic gun right now and it’s even harder today to get a business off of the ground, but don’t let that be what gets you discouraged about starting your business. Remember that we are women with just as much ability and drive as any man who goes and seeks capital or investment. This might just be our time to get ahead.

Food for thought: Did you know that about eighty percent of the venture capital funded businesses fail? Without a doubt, the businesses begun by women have a much better chance of success than that.

The Entrepreneur’s Ultimate One Stop Shop for How to Start and Grow a Business

Wednesday, June 17th, 2009

Ethos 360 has released the cutting edge killer solution to the entrepreneur’s biggest problems; from getting started to getting funded. From Point A, to Point B and so on. Nobody has ever put such a complete set of services and funding solutions under one umbrella along with the personalized attention of a handpicked Mentor to work one on one with each Member. You gain from their experiences and learn from their mistakes. Furthermore this is done at a price that can’t be beat.

Ethos 360 provides entrepreneurs with affordable one on one mentoring, business coaching and capital raising services so they can launch and grow their businesses. They help business owners at every stage, from how to start a business, start-up and growth stage, to established firms seeking large capital funding and expansion. Most importantly, Ethos 360’s decades of experience helps entrepreneurs avoid making costly mistakes and their affordable services assist them navigating through the often treacherous waters of on-line and off-line service providers who (sometimes not so nicely) target entrepreneurs.

The Total Package

The key ingredients of our service our: 1. Every Member gets their own Mentor to work one on one with, 2. Business coaching, document preparation and strategy development i.e. “laying the groundwork”, 3. We raise capital for you, 4. Business credit building program, 5. Unlimited angel/private investor leads, 6. Advice on corporate structure and formation, 7. Pitch Coaching, 8. Investor relations. There’s even more, visit the “Services” page here- www.ethos360.com/solutions/.

Ethos 360 takes you step by step from start to finish whether you have a new concept and don’t know what to do next or you’re looking for your third round of financing from a venture capital or private equity firm. Do you want to sell shares of your company in a private offering or get introduced to the right investment banker to underwrite your IPO they’ll open up their rolodex to help you with that also.

They’ll analyze your unique situation to find you the perfect financing solution. For example: 1. Bank loans/SBA, 2. Angel/private investor leads, 3. Venture capital, 4. Angel groups, 5. Private equity, 6. Private lenders, 7. Lines of credit, 8. Bridge and construction loans, 9. Commercial financing including factoring, accounts receivables, purchase order financing, equipment leasing, 10. Build business credit.

We have more sources of capital in one spot than anyone else, visit the “Solutions” page here- http://www.ethos360.com/solutions/#funding.

Putting Their Money and Credibility Where Their Mouth Is.

All Members receive a Lifetime Membership so if your first business doesn’t work out, you’re a serial entrepreneur or you discover a better venture they’re there to help. They stand behind their services offering a 100% Satisfaction Guarantee or a full refund if you’re not happy for any reason. Perfect “A” rating with the Better Business Bureau. Too good to be true, not really, YOU have to be motivated and realistic; willing to take the necessary steps to get to where you want to be. There’s no magic to what they do; just good old fashioned hard work, experience, creativity and the ability to put together a workable strategy custom tailored for your situation. Lazy unmotivated people do not apply.

What follows are the personal experiences of the owner of Ethos 360 derived from years of pursuing her own entrepreneurial dreams. She’s sharing her mistakes so you don’t have to live them yourself. She’s walked the walk not just talked the talk.

A New Concept Born Out of Necessity.

“While starting and growing my own businesses I found myself in many situations where I needed objective third party advice and found that there wasn’t a company that could take me through the process of starting and growing my business from point A to point B to point C and so on,” stated Ellisa Brenneman president of Ethos 360, “I found out that something even as supposedly simple as traditional bank or Small Business Administration (SBA) financing can be confusing since I had never applied for a business loan before. Who IS the SBA anyway? Where are they located?  Are they a lender? In addition I find a lot of “too good to be true” websites full of big promises but bad reputations.”

“I felt confused, frustrated and lost. What began as an exciting adventure was rapidly turning into an expensive nightmare. Instead of focusing on what I was good at and bringing my vision to fruition,” shares Ellisa Brenneman, “I was burning the midnight oil trying to learn about every aspect of how to start a business and being an entrepreneur. More often than not the information I received was contradictory and came from someone trying to sell me something making me skeptical and more confused than ever.”

The People and Companies That Prey on Entrepreneurs.

Small business entrepreneurs desperate for help and in need of financing will soon discover there’s no shortage of predators to be victimized by. For example, as soon as you post online on a capital raising site the feeding frenzy starts. You’ll be electronically attacked by swarms of unlicensed middlemen willing to find you money for a “small” monthly stipend ranging from $500 to a whopping $10,000! “When I mentioned that it would seem more fair to pay them a commission (even twice the amount they wanted initially) once money was actually raised I never heard from them again,” Ellisa Brenneman explained, “Just the day before they were so excited about my deal and supposedly already had the investors all lined up. I was born at night, just not last night. The first red flag came when I could never get a straight answer to a simple question; please show me proof that you’ve raised capital for someone directly because of your efforts. I asked to speak to a couple of clients who they raised money for in the past. You think they’d be motivated to promote their successes publically, like real funding groups, to capture new business.”

Another favorite is business credit building services guaranteeing huge sums of money if you just spend $4250 to learn their “secrets”. They are so accommodating that they even have monthly payment programs. “I called one such company”, said Ellisa Brenneman, “for the second time to ask the sales representative a few more questions only to find that their phone was disconnected. Wow. This recession must be real tough since their website said they’ve been in business ten years. Then the thought occurred to me, their own tried and true “secret” techniques must not have been very effective or they would still be in business!”

Many entrepreneurs sign up for business plan posting websites supposedly full of anxious investors ready to write them a check, from 2000 miles away none the less, and to their initial surprise they’re contacted right away, not by just one but several investors, extremely pumped up about their business concept and clamoring to invest. The money’s in sight, almost in your hands, they promise, just as soon as you send them $8500 for a “commitment fee”.  And to think you only have to pay $99 a month for a “Premium Listing” on a business plan posting website, for several other “quality” offers just like it!

Traps Set to Snare the Uninformed.

From attorneys charging $1500 to incorporate a business, investment banking advisors who state that you also need a $15,000 Private Placement Memorandum (PPM) before any financier will even seriously look at your project. Executive business coaching that is available for a paltry $1000 a day (with a 3 day minimum), loan brokers who want $850 upfront to “package” a loan request, and we saved the best for last…. the grant finding services. For a hefty fee they’ll search the same databases that you could for free except they’ll do it for you. And within a matter of days they’ll find you a “special grant program” that supposedly only they have access to. All you had to do is pay up to a $6,000 fee upfront and the grant money is yours for the taking! Free money! You don’t have to pay it back either!

You’re already daydreaming thinking about the beautiful office you’re going to rent and luxuriously furnish with all that free government money. Bad news, at the last minute they forgot to mention the 120 page 40 section business plan and written grant proposal you were supposed to already have prepared and the cutoff date was 3 days away. But wait, good news, they have just found a better grant program but you have to pay another $1,000 for “processing”. Wash, rinse, repeat. There are more stories, first hand, of entrepreneurs who kept falling for this over and over to the tune of $20,000 or more lost, down the drain.

More Scared and Confused than Ever?

You’re not alone. A great number of entrepreneurs end up mislead, abused and broke. They end up giving up on their dreams before they even “get into the game” because of these types of tactics. Everything described above has happened to almost all entrepreneurs at one time or another. Some entrepreneurs quit before they ever get started; they were never entrepreneurs to begin with. Others try their whole lives, never make it big but had a blast going for it and would do it all over again. Others get lucky and hit a home run during their first or second time at bat. You simply never know till you try, and luck and timing play a larger role than you can ever imagine. Most entrepreneurs are burdened with too many questions and often given only expensive and ineffective answers. More often than not, each answer is tied to a price tag that few can afford during the beginning stages of their business when every dollar counts the most.

From the Ashes a Solution Blooms.

The idea for Ethos 360 was born from the altruistic desire of Ellisa Brenneman to make sure entrepreneurs don’t repeat the same mistakes she did. Those mistakes are outlined above. There’s a lot more but this press release would have morphed into a short story. Ellisa Brenneman created Ethos 360 not to get rich (she doesn’t charge enough for the Lifetime Membership to do that) but to help other entrepreneurs benefit from her lessons learned and, fulfill their entrepreneurial dreams at a price point anyone can afford.

Ethos 360- Gain knowledge, Gain capital. Attain your dream.

Ethos 360, located in Portland, Oregon, offers a very unique value proposition for aspiring entrepreneurs as well as successful business owners. To their knowledge there hasn’t been any organization, group or business that provided one on one mentoring, business coaching and raising capital services, at an affordable flat fee, until now. The team at Ethos 360 helps business owners regardless of what industry or stage of growth they are at, including concept and seed stage businesses along with complete start-ups.

The owner of Ethos 360, Ellisa Brenneman, recognized that what entrepreneurs needed was a one stop shop that offered all the services an entrepreneur needs under one roof. The core of the concept is that each Lifetime Member is paired with their own personal Mentor to coach, motivate and guide them through the entrepreneurial process.

Everything You Need to be Successful in One Easy to Follow Program

Many companies offer ad hoc services but no company tied them altogether into a cohesive affordable program.  Ethos 360 can help the first time entrepreneur by holding their hand through the start-up process from laying the ground work all the way to funding. The grizzled, battle hardened serial entrepreneur can benefit from objective advice from a Mentor that’s stood in their shoes many times before, offering unlimited angel/private investor leads, warm venture capital introductions and even direct public offerings of the shares of their company. Visit www.Ethos360.com or call 503-501-2444 to get started fulfilling your dream today.

Ethos 360 charges a flat fee of $499 for their mentoring service plus Lifetime Membership including a 100% satisfaction guarantee. No more being nickel and dimed to death. No more sales people pushing unnecessary services at you. No more empty promises. Your Mentor is always there to help you step by step, sharing their knowledge and offering real world guidance in a motivational manner.