It has been a bit since I got to post to my personal blog.  Believe me, I have a notepad of things I want/wanted to write about and share with you.
The last couple of weeks have been a blur.  So much has happened and is happening.  I said it on August 1st, “August would be the best month yet and this next year would be the best yet.”  So far, so good.
Let me catch you up a bit:

-    I restructured our LLC with crav. While this may sound beautiful, it is anything but.  But swimming through legal documents for as long as we have been, I should be prepared to compete next to Michael Phelps for an Olympic Gold.

-    Filed for two patents.  This is exciting.  The idea that we have something unique enough to do this with is cool.  I don’t put much stock into this though until we are launched and prove our uniqueness.

-    We launched The Northwest Arkansas Entrepreneurship Alliance. I and two others co-founded this organization to advocate entrepreneurship in Northwest Arkansas and at The University of Arkansas.  This has already been such an amazing experience.  Check out this article written by The University of Arkansas today: http://bit.ly/9XZ7TI

-    I had my 24th Birthday – Wahoo!

-    I got engaged! This is huge.  Not too many women can I see standing by their man for the hardest years of their lives and never letting them let their heads down.  She is also an amazing photographer and you should check out her work: http://www.meganburges.com

-    Met and re connected with a lot of great people.  These are Techies, Entrepreneurs, and friends.  You should really check them out.  (Maybe I’ll post ten people a month, the ten below are an All Star Cast)

– Tony Bernard – @gotony – Facebook

– Kenny Tomlin – @kennytomlin – Facebook

– David Nelms – @davidnelms – Facebook

– William Herring – @williamherring – Facebook

– Tudor Munteanu – @tudorizer – Facebook

– Spencer Dailey – @Fencefinder – Facebook

– Sarah Scott – @TechTeacherGirl – Facebook

– Catherine Frederick – @atUrbanMag – Facebook

– Jeromy Price – @jeromy390 – Facebook

– Phillip Person – Facebook

I am sure there is a lot of things I am missing.  I hold the right to add more later.  This month was a blur in sooo many great ways.  Now off to blog about something of importance.

Happy Labor Day Weekend!!

*The following post is based strictly on my experiences and opinions as an entrepreneur and startup founder and can and should be used only as such.

Recently, my partner, Kami Duck and I, began raising our Seed Round of funding for our startup.  As this is our first startup, there is much to be learned and we have done just that.  In the process, we have obviously spoken to and pitched to multiple investors.  What we have learned thus far (as it is still very early), may be very beneficial to many first time entrepreneurs such as ourselves.

The Big Three

Proforma Pete:

This type of Angel Investor wants a clear understanding of how you make money, when you make money, and what his/her money is going to do for you and for how long it will last.

Based on the experiences of our startup, being a web/tech startup, a traditional proforma is hard to develop.  We spent countless, frustrating hours trying to put together a traditional proforma.  Months ago we worked on this but never managed to “fit” the criteria.  But what we’ve learned has proved to be very valuable.

For this type of Angel Investor, you need to prove that you understand cash flow.  Albeit, all your numbers are going to be assumptions (THEY KNOW THIS).  This gives them a metric which allows the investor to judge your management skills, operating habits and your financial understanding, as well as grasping the actual potential of your company in terms of revenues.

*Suggested read on projections for your startup:  http://ow.ly/18r0xx

My tips/suggestions:
1. Find a metric to base your growth on.  You may have the most unique product out there, we all do, but there is a product out there that is somewhat similar and can be utilized to serve as a metric for growth.  Hard to swallow?  It is the truth.

This took me a little while to understand because in some spaces, it is just a lot more difficult.  Be a detective; search, search, and search some more.  There is a lot of data out there which you can take advantage of.  If you can not find anything, ASK someone who may know.  There are many, many entrepreneurs out there who are willing to help other entrepreneurs.  I credit a lot to those who I have met and built relationships with along the way.  Think Collaborative.

2. Define benchmarks.  At what point do you consider a mission accomplished.  Is it user gain?  Revenue gain?  Development?  Partnership?  Break-even?

3. Define how you are going to make money.  Believe it or not, but investors are investing in you so that they can make money.  Because of this, you will need a business model that allows you to generate revenue.  Will it be free, freemium, or premium?  How much money will you charge?  This again is an assumption as it most likely will change before launch.

4. Define when you will make money?  While this is a benchmark, it is something that deserves extra attention.  Do you offer free trials?  Do you start out completely free with no strings attached, then bust your consumer in the chops with a premium?  You at least need to understand the scenarios and their implications.

5. Have a good idea or at least logical idea of what it is going to cost you/your company to operate and to reach the above benchmarks.  You will not get this exactly right.  Salaries are definitely something you will run into problems with.  ASK other entrepreneurs, read blogs, talk to mentors.  Project costs that are essential to you reaching your benchmarks.  A good investor will make suggestions and tell you that you need more money if you truly do.  They want you to be successful.  After all, they are investing in you for the return.

Brief Break Down Bill:

With this Angel, you will need something sort of like a grocery list for your startup.  While “Brief Break Down Bill” wants to know everything “Proforma Pete” wants to know, he/she is confident you have already thought about that and have it.  He/she may ask at anytime for all of this information, but right now he/she only focuses on the “grocery list.”

The “grocery list” is a brief breakdown of everything “Proforma Pete” asked for.  This allows for the investor to have a knowledge that you understand how to make your idea a company, how you will manage it and how much money it is going to take you to get there without going into detail.

At this stage, your idea, concept or product has more leverage than it did with “Proforma Pete.”  This allows for more of the discussion to be about vision, which is always exciting.

Just an Idea Jeffrey:

This Angel either trusts that you have all of the business strategies under control or just has money to take a “leap of faith.”  More likely it is that they think you have an awesome idea (or you at least convinced them that you had an awesome idea; either way kudos to you and your sales skills) and are willing to take a “leap of faith” with money they can afford to lose if it doesn’t work out.  These types of investors are harder to find.

When preparing for this investor, the idea is your deadliest weapon.  Make sure its a great one, well thought out, and know all of the above to further solidify your position and vision. Just because the investor you are pitching does not require your knowledge of the complete business strategy/model, does not mean that you as an entrepreneur do not need this information.

Each investor is a different animal and most of the time you’ll be unaware as to what type of animal they may be.  Until you are thrown into the cage of course.

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On our funding trek we have had opportunity to meet with all three types thus far. The wonderful thing about this has been the learning process. It has also been rather confusing and stressful at times.

When meeting with investors for the first time, you come away learning so much. You refine, refine and refine, confident that you are going to blow away the next investor because you now KNOW what you have to have. Wrong. You meet with the next investor, only to find he wants the exact opposite. You refine, refine, confident that once again you are going to blow away the next investor because you think after critiques from two investors, that you have to have it this time. Wrong. The third investor doesn’t want any of the things the first two investors wanted.

While all meetings are successful in some manner or another as well as allow you to keep progressing forward, you still feel that you can improve, refine, improve, refine and by the next time, hit one out of the park.

This is where my point comes:

Be Prepared

Be prepared for all three scenarios.  Just because you are prepared for all three, does not mean that you throw all your cards on the table at once.  I have also had a problem with TOO much information.  It was all good data and content, but wading through it all proves exhausting for an investor.  Most investor meetings are said to last 15-30 minutes if you are lucky, longer if they are interested.  Ours have lasted on average, 2.5 hours.  This means you have to feel out the investor quick to know what route you take.  Throwing down the wrong card does not mean you lose, it just means that you have wasted 5-10 minutes of the valuable time while the investor sat clueless or in deep thought as to what was missing or while he was wading through the content.

You are very intelligent or you would not be in similar situations to these.  Use that intelligence and get the most out of the time you have with the investors.  Be prepared.

Last week, I was on a judging panel with my partner, Kami Duck, for Mark Tocco’s, University of Phoenix, Business Strategy Class.  Mark Tocco is a mentor of mine and works with us on The Northwest Arkansas Entrepreneurship Alliance.  I originally met him through SCORE and in the past 6 months he has became one of my most trusted advisors.

Similar to being on the judging panel for Mark’s class, my partner and I, were both also on a judging panel for Jeff Amerine’s, University of Arkansas, Entrepreneurship Class.  Jeff Amerine is also a mentor of mine and also works with us on The Northwest Arkansas Entrepreneurship Alliance.  I met Jeff through Innovate Arkansas, which was referred to me through a startup, College Tokens.

Through both experiences, I came away learning a lot.  Not only did I learn about a collective group of individuals who may or may not have taken the class seriously, but I learned how close to “design,” “business” could be, in terms of discussions and critiques.

Similar to my five years at The University of Arkansas Fay Jones School of Architecture, panels would criticize your presentation, your product and what ultimately felt like, you.  I was always on the receiving end of these high level critiques and discussions.  Until the latter years of my education, I never really took advantage of the opportunity of putting a collective group of minds together, with very different viewpoints, perspectives, and backgrounds.  Once I learned and realized how this could be beneficial, I was addicted to it.

Today, not only have I been blessed to take part in two presentations at business schools as a judge, but I actively take part and organize similar activities within The Northwest Arkansas Entrepreneurship Alliance.  Putting together the collective minds of those passionately involved in similar fields of study or interest as yourself and company or idea, can only turn out for the best.  Someone will always reveal something that you have not thought of.  Someone will always challenge you in a way that you have not been challenged.  Someone will always ask a question that you will probably not have the answer for.

You will not have all the answers, nor should you.  It is healthy to be challenged and questioned.  It allows you to grow as a person, an idea, an entrepreneur.

I challenge you as a designer, an entrepreneur, or CEO, to gather a collective of passionate business minds and creatives, and present to each other.  Question each other.  Challenge each other.  We all see things differently.  We all understand things differently.  Critiques are one of the most powerful tools an entrepreneur can utilize as well as one of the most rewarding.

I challenge you to sit down and present your idea to a group of passionates.  If you are in the area, I am always open to connect.

I leave you with a video that we recently made for The Northwest Arkansas Entrepreneurship Alliance.  Highlights how we can help as a collaborative set of minds.

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Most recently, the Donald W. Reynolds Tri State Governors Cup Business Plan Competition wrapped up.  The top plans and pitches were awarded sums of money as well as a trip to Las Vegas to attend another round of the competition with the best of three states.  These teams are built around both “real” and “fictional” companies. (Congratulations to the Winners!)

I took part in this competition up until the week before.  It was a process that was very rewarding to say the least.  But why?  What went into this?  Why did I pull my entry a week before?  Did I make a mistake?

This business plan competition is one of many across the nation that startups and “businesses” take part in.  Also, there are Incubator-Like Applications, such as TechStars.  These type applications require often times for you to submit answers to investor type questions, along with prototypes and/or videos.  The startups selected are invited to the place of incubation, receive funding and vital mentorship.

Business Plan Competitions:

- Donald W. Reynolds Tri State Governors Cup

- Rice Business Plan Competition

- MIT 100k

- and more…

Incubator – Type Applications:

- TechStars

- Y Combinator

- Capital Factory

- and more…

Today, INOV8 posed the question, “Do Business Plan Competitions Really Help Startups?“  I was quick to comment on this article, although it was never shown.  My answer was “Yes.”  But not because there is a possibility at winning a total prize of 50k.  And lets insert the process of applying for an incubator type program into this mix.

My answer of “Yes” applies to both genres of contest type programs.  BUT!! Not for the face value of winning a prize or gaining mentorship (which I hold very valuable).

I have taken part in both.  I will explain my “Yes” based on my experience.

Business Plan Competition: When I first set out to build my team, I knew of not one place to look.  I knew of no one to ask for help and I was convinced individuals would not sense that a local startup needed help.  Through advice from another startup as well as Innovate Arkansas, it was suggested that I build a team for theDonald W. Reynolds Tri State Governors Cup. I set out at that moment to find a team.  I found a friend in the Sam Walton School of Business at the University of Arkansas and told him what I was trying to do, that I was trying to form a team for this competition.  He said he knew of a couple of guys that might be interested and so we all met.  I treated each meeting like an interview and strictly stated that being a part of this competiton with my startup would be treated as a longterm interview.

Over time, we became close, collaborated even closer, worked long hours, slept very little and above all, dreamed.  We not only put together a business plan in a short time, but we put together a prototype of our flagship product.  By the time it was time to submit to the business plan competition we were treating our startup as a “real” company and was focused on just that.  We did not have the time to worry about the competition anymore.  We had much higher ambitions.

With that being said, my point is that although it was a business plan competition, one that I ended up pulling out of so my startup never had the chance to win, it was very beneficial to my startup.  It allowed me to build a very strong management team.  A team with complimentary skills and personalities.  No, not all of those original members are still a part of this team today, but that is another beauty of this.  It takes a lot to be an entrepreneur.  It takes a lot to be a founder.  For some, it just is not for them.  We all learned.  We all grew. We all had our part in building something that one day could, we hope, be great.

While preparing for the competition, we prepared ourselves to be put in front of actual investors.  Although, we did not submit an application, we did address and work extensively on each and every part of the business plan.  Our idea developed, our team developed and ultimately our company, crav, developed.

Incubator – Type Applications: As we began development and brought on developers, we began to see an opportunity to use Incubator – Type Programs to further benefit ourselves.  We knew that the mentorship, the funding, and the resources would be of great value and help us critically in developing our company.  The funding being the least of the important.  With this application came a set of criteria, questions as well as a deadline.

At the point of development of our product, we were comfortable knowing we did not have a strong chance of being selected forTechStars.  We applied none the less.  We answered all of the questions the best we could.  We created a video and met the deadline.  What this allowed us to do, was to refine our answers to those investor type questions.  It allowed us to brush up on the pitch.  It allowed us to rethink things and look at things in a different light.  It also pushed us to develop conceptual video of our company and its product.  Without the motivation of this application, one might not feel so inclined to revisit investor type questions or build a conceptual video, based solely on “what probem do you look to solve and how?”

So “Yes,” business plan competitions and incubator applications are very beneficial to startups.  Win or lose, it allows you to grow.  It allows you to further your company in a vast amount of ways.  In my opinion, you should never rely on these types of programs and competitions to ensure the success of your startup.  They are merely an accolade that may only make things easier, but could contain a risk.

You can take advantage of all of these programs and competitions.  It is how you take advantage of them that determines how they will benefit your startup.