Entrepreneurial

Why startups should embrace conflict

– Jeff Bussgang is a general partner at Flybridge Capital Partners and an Entrepreneur-in-Residence at Harvard Business School. He is the author of “Mastering the VC Game” and writes the blog “Seeing Both Sides“. The views expressed are his own. –

One of my favorite business books of all time is Patrick Lencioni’s “Five Dysfunctions of a Team”. Like all books by Lencioni, it begins with a short fable in a corporate setting of a management team that is operating dysfunctionally. Then he provides a framework that analyzes the situation and draws out the general lessons as to why teams operate poorly together and how to systematically combat it.

The following pyramid graphic summarizes his advice:

Each of the layers of the pyramid resonate with me (which is probably why I have this pyramid printed and hung up in my office), but the one that I always come back to and re-read is “Fear of Conflict”. Again and again, I see management teams and boards of directors shy away from conflict.

It’s quite natural for humans to avoid conflict. In fact, our deeply programmed “fight or flight” instincts are designed to protect ourselves and run away when we sense danger. Interpersonal conflict is a danger we all prefer to avoid as it makes us uncomfortable. Your stomach gets a little queasy, your heart beats a little faster, and you think, “How do I get out of this situation?”

So, you tell a joke. You change the topic. And you feel a sense of relief.

When I see this happening in management teams and in board rooms, it makes me uncomfortable because I know where it leads. It leads to mistrust, simmering issues, politics and dysfunctional behavior. Here are a few techniques I’ve found that help address this issue, particularly in startups.

Top 5 funding mistakes by entrepreneurs

– Adam Hoeksema is the founder and CEO of startup consultancy firm ExecutivePlan. This article appeared on Under30CEO. The views expressed are his own. –

For most entrepreneurs these days, funding is nearly impossible to come by.

According to the report titled, “Important Things for Entrepreneurs to Know about Angel Investors” and distributed by the Angel Capital Education Foundation, only 1 to 4 percent of applicants successfully raise angel investment capital. So before you ruin your chance at securing investors, make sure you have not committed any of the following deadly mistakes.

1. Wait until you need it. So many entrepreneurs make the mistake of waiting until they need the capital “tomorrow” to begin the process of seeking funding. Make no mistake about it, the process of raising capital can take months and months. Even a simple loan will require enough paperwork to kill a small tree. Ironically bankers and investors are more likely to provide you with additional capital when you don’t need it. So don’t wait until you have an immediate need to begin the funding process.

10 tips for securing angel or venture funding

– Chris Lynch is vice president of economic development at the Irvine Chamber of Commerce. The views expressed are his own. –

During the Internet boom, investors were mostly interested in the potential of a company. These days nothing is considered a sure thing and if your startup business isn’t on the right track, or if you haven’t done your homework as an entrepreneur, then you won’t have much luck raising capital.

The following are 10 tips to help you secure the financial support and funding your business may need to succeed.

Don’t celebrate until the cash is in the bank

– Mark Suster is a partner at Los Angeles-based venture capital firm GRP Partners. This article originally appeared on his blog “Both Sides of the Table”. –

Recently I wrote a blog post about how I hated losing, but I embrace it as a way to learn, improve and increase my win rates.

One of the things I learned from my “post-game analysis” is that you’re most vulnerable right after you’ve won the deal. I know it sounds counter-intuitive, but my experience tells me it’s true. At the moment you pop the champagne cork and let down your guard is when you’re easiest to attack.

The entrepreneurial stress test

– Neil Patel is a serial entrepreneur that blogs about business at Quick Sprout and is the co-founder of KISSmetrics. The views expressed are his own. –

It’s been roughly 10 years since I started my entrepreneurial journey. There were definitely good times as well as times where I felt like ripping my hair out. However, looking back to when I first started, even though I made a ton of mistakes, for some reason they always led me in the right direction.

Now, you could say that it’s because I am persistent, but I wouldn’t agree to that being the reason. Scrappiness is another quality that people believe I have, but again I don’t think that’s what got me to where I am either.

How to deliver a killer elevator pitch

– The following article originally appeared on Under30CEO.com. The views expressed are their own. –

The elevator pitch is one of the most important elements in starting your business successfully. Picture this: you are searching for funding for your new business, taking an elevator from a big meeting when in walks Donald Trump. What do you do? Do you freeze up when he asks you what you are doing here or do you nail him with a perfect pitch, snag his business card and score a meeting?

Here is a guide to the several core elements of the elevator pitch. This is not your “commercial” and is not a sales pitch. That can be crafted from this, but this serves as a professional pitch with the purpose of raising investment for your business. This is a pitch for your company, not what you are selling. Tell them why your business will be successful.

TechStars’ founder predicts accelerator implosion

Less than two months from launching its New York program, TechStars co-founder David Cohen is already anticipating a critical mass being achieved in the startup-mentoring space within the next five years.

Cohen said that when he and two friends first launched TechStars in Boulder, Colorado four years ago there were just a handful of these accelerator programs. Now he said there are upwards of 60 across the country and he expects that to triple before the bubble bursts.

“There will be a run up to a couple hundred and then we’ll probably see a run down to 10 would be my guess over the next five years,” said Cohen, who has expanded TechStars to Boston and Seattle in recent years and has invested in more than 70 startups since launching the program. “There will certainly be a little mini accelerator bubble.”

Invest in lines, not dots

– Mark Suster is a former serial entrepreneur and a partner at Los Angeles-based venture capital firm GRP Partners. This article originally appeared on his blog “Both Sides of the Table”. The views expressed are his own. –

Everyone seems to be in such a rush to get shacked up these days.

In normal times investors will look for “traction” before investing. We want to make sure we’re in love. This sometimes frustrates entrepreneurs who just want to “get back to running the business.” But if you understand it you’ll see that it’s perfectly rational and it should also influence how you form relationships with investors. And remember, if we get married you’re stuck with us, too.

The first time I meet you, you are a single data point. A dot. I have no reference point from which to judge whether you were higher on the y-axis three months ago, or lower. Because I have no observation points from the past, I have no sense for where you will be in the future. Thus, it’s very hard to make a commitment to fund you.

Timing your startup

– Chris Dixon is co-founder of Hunch and founder of Founder Collective, and an investor in many early-stage companies like Skype and Foursquare. Previously he co-founded Siteadvisor, which was acquired by McAfee. This blog originally appeared on cdixon.org. The views expressed are his own. –

I never had the opportunity to invest in YouTube but I have to admit that if I did I probably would have passed (which of course would have been a huge mistake). I’d been around the Web long enough to remember the dozens of companies before YouTube that tried to create crowdsourced video sites and failed. Based on “pattern recognition” (a dangerous thing to rely on), I was deeply skeptical of the space.

What I failed to appreciate was that the prior crowdsourced video sites were ahead of their time. YouTube built a great product, but, more importantly, got the market timing just right. By 2005, all the pieces were in place to enable crowdsourced video – the proliferation of home broadband, digital camcorders, a version of Flash where videos “just worked,” copyrighted Web content that could be exported to YouTube, and blogs that wanted to embed videos.

Can VCs be value investors?

– Jeff Bussgang is a general partner at Flybridge Capital Partners and an Entrepreneur-in-Residence at Harvard Business School. He is also the author of “Mastering the VC Game”. This article originally appeared here. The views expressed are his own.  –

“Security Analysis” is cited by Warren Buffet as one of his top four favorite and most influential books. Written by Columbia University professors Benjamin Graham and David Dodd, it was first published in 1934.

The book is a thick tome that articulates the thesis of value investing – the analytical techniques for valuing securities and seeking to invest in those securities in the context of their underlying value. The latest printing, the sixth edition, contains a foreword from the Oracle of Omaha himself as well as a preface from hedge fund investor Seth Klarman of The Baupost Group, who is regarded by many to be one of the modern masters in the art of value investing.

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