The following is a guest post by a fellow
Gravity Ventures member and
friend, Dr. Tony Ratliff:
Learning to Pitch Before You Start Raising Capital
By Dr. Tony Ratliff
It only took about six months of deal flow and a handful of
“pitches” before I realized that most entrepreneurs are really,
really bad at “selling themselves” and “pitching” their ideas and
companies to investors.
I cringe every time I listen to a great start-up idea or read a
well-written business plan, and then watch in horror as...
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Determining a valuation for a pre-revenue company is a difficult
process. A Harvard VC formula does not make sense at this
stage as available P/E ratios essentially compare apples to
oranges, cash flow projections are too untrustworthy to use a DCF
method, and there is no such thing as a true market comp.
Investors must rely on qualitative factors in connection to
valuation formulas to determine how much they think the thing is
worth. Some qualitative factors include:
• Is the...
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The last couple of years have been strange. With the change
in the economy, many early stage companies are looking for anybody,
and I mean anybody, to invest in their capital round. As the
economy rebounds (which we are seeing in technology markets)
business owners are again able to be picky when considering angel
investors.
An angel investor (or an angel investor group or private equity
firm) should be more than just a liquid wallet. He/she
should be a strategic member of your team. They...
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Next week I am moderating the plenary panel at TechPoint’s
Innovation Summit entitled
Funding Innovation.
Check it out:
TechPoint
Innovation Summit
Also check out the
sponsors page. I
counted today, and
nine Alerding Castor
Hewitt clients are sponsors of the Summit. That is
awesome.
This year’s panel members represent private equity investors, angel
investor groups, successful entrepreneurs and grant funding
organizations which look for funding and investment opportunities
in Indiana...
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So I have been a bit behind in blogging these past few weeks.
With the new addition to my family (my 3rd son), life has been
hectic. But, I am back and ready to role.
As a general update, Alerding Castor Hewitt continues expand as
technology legal counsel in SaaS law, funding law and
entrepreneurial law fields. We have some exciting new
Internet-based and SaaS clients. This month we helped a
client negotiate a stock purchase deal and have handled no less
than thirty SaaS or software licensing...
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Your friendly Indianapolis attorney at Alerding Castor Hewitt LLP
here with a history lesson and tie in to business law. Most
of you have probably heard the term “gerrymander” and know that it
refers to a process of dividing a territory into districts in order
to give one political party an advantage over another by
concentrating the voting strength of that party in as many
districts as possible. Fewer of you
probably know the origin of the term, and I imagine that even
fewer know much about...
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This
morning I attended the
Techpoint event: What it Takes
to Lead a Successful Entrepreneurial Venture Today and was
reminded of some fundamental leadership qualities that I see in
many of the successful business owners we work with as a business,
entrepreneurial and information technology law firm.
Speaking today were Daniel DeHayes, a Professor Emeritus of
Business Administration with the Indiana University Kelley School
of Business and Delphia Croft, the Managing Principal of...
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Today
is an exciting day for Indianapolis with the establishment of a
brand new local eatery called "
Pure" located in
Fountain Square at 1043 Virginia Avenue.
Working with the business owners through Indiana entrepreneurial
law, I checked in to see what the place had to offer this
afternoon. I couldn't be more excited about the fresh flavors
and the funky atmosphere. With original artwork and high
ceilings, it has a Chicago vibe with a menu focused on
fresh
honest food. Perfect.
Today I chose...
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In my recent blog series,
Entrepreneurial Law - Developing a Good Business
Model, I addressed how an entrepreneur needs to work through
three prongs in order to develop a sustainable business model
developed for growth: Market Opportunity; Management Team; and
Capital Structure.
Private equity investors asses the same prongs when determining
whether to make an investment in an emerging company, but I find
that investors tend to set the prongs in their own priority
ranking. I think all three must...
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Working
in the area of
Indiana entrepreneurial law,
I see dozens of business plans that are incorporated into the
equity raise documents of budding new companies.
With those business plans are financial projections that are based
on newly formed companies with limited operating histories,
unproven track records, and often times plans for entry into a
mature and highly competitive marketplace.
Needless to say, it can be daunting as an entrepreneur to come
up with a compelling reason why investors...
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I love Indianapolis,
but I find it a difficult place for emerging companies to raise
capital through private placement offerings. More established
companies have less trouble, but earlier stage companies often are
caught in a chicken/egg situation – they need capital to move to
the next business stage, but private equity investors don’t want to
invest until they are through that next stage.
Part of what makes Indiana so great is that we are very fiscally
conservative. In fact we were one of only...
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Closing
in on the end of 2009 I have to say that I am quite pleased
with the commitment Indiana showed this year to be a State that
supports and promotes innovation, entreprenuership and business
growth.
This week I had breakfast with Larry O'Connor, Executive Director
of
Butler
University's Business Accelerator. Larry is a former CEO
of Bank One Indiana. Following his "retirement", Larry became
CEO of The IndianapolisMuseumm of Art, and recently took the
position to lead theAcceleratorr...
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There are several business blogs that I follow. Most of these
are written by SaaS law / Internet law clients of mine or other
Indiana businesses in technology industries. Lately I have
been falling behind on them. This morning I am trying to
catch up.
I came across a very good, brief video on
Kristian Andersen + Associates'
blog.
The video is from the Bigger Ideas/Smaller Indiana conference this
past summer. In the video Kristian Andersen shares his
feelings on central Indiana's business...
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I saw
a great article awhile back in Entrepreneur and thought
I should post the article for those in the formation stages of
their next business venture.
I can't stress enough how much time and energy it takes to launch a
start-up, and just how
much the success or failure of a budding new company rests on the
people involved. I see it everyday as an Indiana
technology lawyer involved in Indiana entrepreneurial law.
You can count on spending hours upon hours of the day with your
business...
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This is part III of a hilarious
article by Robert Ambrogi on the
IMS Expert Services blog. I am
an Indiana technology lawyer focusing on entrepreneurial law, SaaS
business law and technology law. As such, this article hits
home as it lies at the intersection of social media and legal
process. Enjoy.
4. Lawyer's blogging
backfires
A California lawyer learned the hard way to watch what you say on
your blog. His posts helped earn him a suspension from law
practice. But the case has an unusual...
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This article is just too good and
deserves a repost on the Business & Culture Blog. I am an
Indiana technology lawyer focusing on entrepreneurial law, SaaS
business law and technology law. As such, this article hits
home as it lies at the intersection of social media and legal
process. The article is by Robert Ambrogi and posted on the
IMS
Expert Services blog. I will repost it in 3 parts - all
are worth reading.
What happens in Vegas stays in
Vegas. The same is not true of what happens...
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Operating
under Indiana entrepreneurial law, I have seen a great number
of contracts across my desk, and many for new business owners
plunging into a world of negotiations. Fresh out of the gate,
it's important for savvy business owners to get up to speed quickly
on essential provisions that should be included in their
contracts.
For instance, for business owners who are retailers, wholesalers,
or merchants who otherwise sell "property" (essentially, products
that you can pick up and move), they...
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It's
exciting to be apart of the city of Indianapolis, and even more so
when you get to be involved with those who are shaping
the future of Indiana technology.
Business law firms are a great place to practice as a
technology attorney. I am fortunate to live in a
world where software start-ups and fresh business ideas
(that often times are solving tomorrow's problems) crop up everyday
and are a way of life. You would be amazed at some of the
exciting new software developments that are underway...
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If you have not yet
seen it, check out
IndianaStartup.com.
This site is a general resource for entrepreneurs, start-ups and
small businesses. The content is nothing less than
fantastic.
The site was developed by Indianapolis attorney Brian Powers – a
friend of Alerding Castor Hewitt, LLP. I have great respect
for Brian and his law practice. He is not only a very
knowledgeable attorney, but his background as a business owner
provides him a rare approach towards entrepreneurial law and
business...
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I am a HUGE fan of
Compendium
Blogware. If you have not considered the value of
business blogging as a tool for search engine optimization (SEO),
you need to. Here is the value received by my SaaS law /
Entrepreneurial law firm over the last year.
I started the Business & Culture blog (powered by Compendium)
about 12 months ago. Key search terms for my blog are listed
on the right side of this page (e.g., Angel Investor Group,
Private Equity Attorney, Funding Law). I landed my first
client as...
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