Entrepreneurial

How much money do I need for my startup?

– Tim Berry is the president and founder of Palo Alto Software. This post originally appeared on his blog, “Planning, Startups, Stories”. The views expressed are his own. –

It’s an obvious question. And if you’re looking for startup investors you’d better be able to answer it well, and quickly too. No wandering eyes. No doubt. If you’re doing a pitch, have a slide for it. And be specific.

I liked this from Ben Yoskovitz’s Instigator Blog on Use of Funds:

… most descriptions of “use of funds” are incredibly generic and standard, typically involving the following: hire key personnel, product development, sales & marketing. Hhhm…the phrase, “No s!@# Sherlock…” comes to mind.

And on the other hand, there’s this about that, from Perfecting Your Pitch, by Guy Kawasaki’s Garage.com Ventures:

It should be clear from your financials what your capital requirements will be. On this slide you should outline how you plan to take in funding — how big each round will be, and the timing of each — and map the funding against your key near-term and medium-term milestones. You should also include your key achievements to date. These milestones should tie to the key metrics in your financial projections, and they should provide a clear, crisp picture of your product introduction and market expansion roadmap. In essence, this is your operating plan for the funds you are raising. Do not spend time presenting a “use of funds” table. Investors want to see measures of accomplishment, not measures of activity.

So go figure. There are two opposite points of view from two good sources.

Entrepreneur needs to prove golf gizmo works

Jon Cook

Feb 18, 2010 14:25 EST

Tom Cannon has created an intriguing golf gadget, but if he wants to find a market for his product, the former NASA rocket scientist needs some hard data to prove BonusYards can help golfers add more distance to their drives, said experts.

The Maryland, Virginia entrepreneur hit on the idea after reading a story that detailed how a 45-degree angle – between the club and the ground – is the optimum angle for golfers to address the ball before teeing off (read original story here). The article suggested practicing in front of a square box, but Cannon thought there had to be a better solution. He went into his basement workshop and attached a carpenter’s level to a golf club that indicated when he was standing at the proper angle to the ball. The problem was the level was too big and heavy and it didn’t stay on the club.

Cannon eventually found a manufacturer in China and built a level that was small and light enough that he could fashion to a club, without it adversely affecting his swing. The plastic device resembles a child’s toy ring, with a flat coin-sized head that encases a bubble level that clips onto the top of the club, or grip, and includes markings to show when the club is properly aligned at a 45-degree angle.

THE PITCH

Cannon said he is targeting the 15 million “hardcore” U.S. golfers, who play a minimum of eight competitive rounds each year. “I’ve put it in the hands of several golfers and gotten positive results from all of them. Everybody loves it,” he said.

Cannon admitted that after all the trial and error that went into building BonusYards, his toughest challenge is simply to convince people that it works and to try it out.

“We don’t have a budget to pay for a high-profile golfer to endorse the product, but we believe once they start using it and know what it does, then we think we’ll build sales that way,” said Cannon, who has planned an initial production run of 2,000 units and intends to follow up with a larger run of 100,000 units, which he estimated would cost $200,000. He said while he and his partner can swing the cost, he would prefer to get some investors onboard. “One of our worst case nightmares would be to stimulate the market, have orders in hand and then be months away before being able to fulfill those orders.”

Wanted: investors for online job board

Jon Cook

Aug 25, 2009 12:11 EDT

Ivy Exec, a job posting and recruiting website, targets high-profile professionals by offering exclusivity: job-seekers must first be approved as a member to access the site’s job listings.

“They don’t like to be part of the masses,” explained Ivy Exec founder Elena Bajic (read her entrepreneur journal) about the site’s 25,000 members. “They’re looking for a way to differentiate themselves, an exclusive club and a network of peers. So the fact that they have to get approved to be members of Ivy Exec is very important to them.”

THE PITCH

Initially free to join, Ivy Exec recently started charging a monthly fee that ranges from $22-$42 depending on the package. On the corporate side, Bajic charges an average of $8,000 for her selective recruitment services, which include pre-screening all job applicants to find a better match. In this way Ivy Exec operates more like a dating site for job seekers.

The recession has been both helpful and hurtful for Bajic. It slowed her growth as firms cut back or stopped hiring altogether, but allowed her to take advantage of lower infrastructure costs, like rent, furniture and office supplies, to streamline her business. When the economy picks up and companies start hiring again, Bajic hopes Ivy Exec will be well positioned to cash in on the abundance of over-qualified candidates looking to land high-level jobs.

To facilitate that Bajic is seeking to raise $1.5 million in funding to assist Ivy’s sales and marketing push and to upgrade the website. Bajic said she wants to boost Ivy’s membership to 100,000 by the end of 2010, which would significantly increase revenues.