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By Sandra Holtzman, May 11, 2013 9:36 am

This is the title of an article just published in The New York Law Journal (I’m one of the authors).  It’s a cautionary tale about fundraising.  It gives relevant details about the JOBS act and how that applies to fundraising – and it’s not the panacea many are mistakenly making it out to be.

It’s also about losing focus on the prize – moving your business forward – while distracted by the dazzle – the allure or promise of raising capital any way you can.  The article details what’s legal and not legal in the world of raising money for your company.  I hope you use it as a guide to do your fundraising the correct way so you can avoid the fate and outcomes (jail time?) of this unfortunate company.

http://holtzmancom.com/teamwork_latest_news.php

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By Sandra Holtzman, April 6, 2013 9:05 am

Recently, as an entrepreneur panel and pitching event was winding down (http://www.levin.suny.edu/innovateny/), I found myself chatting with some entrepreneurs who were anxiously discussing a big pitch they had the next morning. One woman asked if the clothes she was wearing would be okay for the pitch. She was surrounded by a small group of business experts. Everyone offered her advice…change your blouse…the skirt works…maybe you should wear a suit and not be so casual even if you’re pitching the entertainment industry…etc. I finally leaned in and said quietly, “wear what you feel comfortable in…you don’t want to worry about your clothing when you’re doing a presentation.” A look of relief washed over the entrepreneur’s face.

There was more of an exchange on multiple topics and again near the end I made a suggestion…” remember, if the audience interrupts you with questions go with the flow and answer them. Don’t worry if you don’t get back to your presentation. This is more important.” So many presenters answer a question (some don’t even do that) and instead of going back and giving the audience (in the case of investors, they are usually the ones directing the conversation) your canned presentation, let them lead you to where their interests lie. First, it shows you are flexible and connected to the conversation. Second, is says that you are not rigid and insisting on the presentation. The purpose of being prepared is so when this sort of thing happens, which is virtually all the time, you can go with the flow.

More useful tips are offered by David Holloway, management consultant http://sangira.com/wp-content/uploads/2012/10/WPPDF-Entrepreneur-Pitching.pdf and by Entrepreneur with some serious tough love advice http://www.entrepreneur.com/article/201826

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By Joan Volpe, February 25, 2013 11:09 am

Congratulations to our Retail Professional Development
Certificate student’s Grand Opening!

Who:
Kathy Sanchez

Certificate Program:
Retail Management Experience

What:
Curvaceous K

Where:
Curvaceous K
179 Stanton Street (between Clinton and Attorney Streets)
http://curvaceousk.com
http://curvaceousk.blogspot.com

Why:
I wanted to provide women my size with the opportunity to shop in a boutique especially for them as most boutiques really only cater to about size 10/12.

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By Sandra Holtzman, January 19, 2013 8:18 am

If I build it they will come.

This is the title of the first chapter in my book, “Lies Startups Tell Themselves to Avoid Marketing.”  The chapter basically deals with the idea that if you aren’t sitting around waiting for the latest “thing” (fashion, technology, gismo, app etc) to walk through your door and land in your lap, then chances are about 100% that no one else is either.

Here’s a variation on this theme that’s dedicated to fundraising and a key aspect to fundraising that a lot of entrepreneurs and startup businesses fail to recognize.  Or if they recognize it, the concept is so foreign to them that they can’t even get their minds around it.  And that’s the issue of scaling.  When you build your business and business plan, if you are planning to raise money, then building it is not enough. The money won’t come. Why not? Because most startups and entrepreneurs don’t recognize the value of scaling their company –the value to them but more importantly the value  to the investor.

Often the first question an investor will ask is ‘how fast can I get a return on my investment?’ And they don’t mean dollar-for-dollar.  They mean $10 for every dollar.  If you don’t show them plans to scale the company, then you can’t answer that question.  If you can’t give a map (or better yet a spread sheet showing the exact details like timeframe, expenses, projections to profitability, personnel and equipment being brought on), then you’re probably in a lot of trouble.  If I’m investing in your company, why would I want to give you money unless I’m going to see the company grow (“scale”) and give me multiple times back my investment. If you’re a one or two person shop determined to keep it that way, then that just isn’t going to happen. Those kind of companies are called “lifestyle” companies, where the entrepreneur is making a success just for themselves. Big difference (see http://thinktraffic.net/startup-vs-lifestyle-business) .  You may get investors, but it’s that much more difficult. You are more likely going to be eligible for a bank loan than investment.

Some issues around scaling, such as when is the right time to scale and do you scale out or deep are discussed by Geri Stengel in her Ventureneer blog (http://ventureneer.com/vblog/business-plan-nonprofit-growth-planning-scale).  Don’t let the fact that Geri deals with non-profits scare you off – these tips work for profit companies as well.  Other tips can be found on CNN’s blog “Pop Quiz: Is Your Business Scalable?” (http://www.inc.com/karl-and-bill/pop-quiz-is-your-business-scalable.html) .

Important tip to remember:  “If I scale it, they WILL come.”

Sandra Holtzman teaches CEO 035: Licensing.
She is the author of Lies Startups Tell Themselves to Avoid Marketing.

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By Sandra Holtzman, January 5, 2013 9:23 am

Image provided by Shutterstock http://www.shutterstock.com

The transition from analog to digital has enabled the reach and focus of PR and marketing messaging exponentially. These transitions are nicely described by Lucy Siegel (http://bridgebuzz.bridgeny.com/). With these new powers, it’s important to make sure that your storytelling is aligned with your branding and that both have been influenced in some way by your audience (let’s call it customer-focused storytelling). This not only strengthens your story, but your brand as well.

Even the new technology has a new wrinkle, as Janet Falk (http://www.janetlfalk.com/) tells us. It’s crowd sourcing and user-generated content — when companies actively solicit input from target audiences. She provides a familiar example: The 1995 campaign to select the next color of M&Ms is now a contest for user-generated video commercials. Contestants are rewarded with seeing their work displayed on the company website, inevitably shared among a like-minded audience and often voted upon. The grand prize winner gets monetary compensation and digital fame. In the process, consumer packaged goods companies relinquish a measure of control and yield reliability of authoritative sources to the unknown contestants, whose agendas may or may not align with specific corporate goals beyond increasing brand awareness.

The benefits of digital storytelling come with more responsibility, in the form of having to monitor both the effect your story is having, as well as your audiences’ reactions to the story (for instance, bloggers without journalist credentials and audiences with agendas).

Sandra Holtzman teaches CEO 035: Licensing.
She is the author of Lies Startups Tell Themselves to Avoid Marketing.

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By Sandra Holtzman, July 21, 2012 9:12 am

The contest is sponsored by Daily Candy. The exposure is unbelievable. All you have to do is enter:
http://www.dailycandy.com/startsmallgobig/index.html?vwink=DC:Email:EDIT:NYC:20120716:16:771575:57

Sandra Holtzman teaches CEO 035: Licensing.
She is the author of Lies Startups Tell Themselves to Avoid Marketing.

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By Sandra Holtzman, July 14, 2012 10:06 am

The recent New York Venture Summit, held by young StartUp Ventures, was characterized, as it always is, by high quality panels of venture capitalists. While each panel focused on a different topic, the underlying theme is always “who will VCs find fundable” . The attendees, in addition to the VCs, were mostly companies who were presenting or otherwise seeking funding. They all want to know, “how do I get money?” and “how much is it going to cost me to get VC money?” YoungStartUp Ventures is focused on the funding of all types of technology so temper some of the comments below with your own experience in the fashion industry.

Some key insights, echoed numerous times by various VCs, and sometimes contradicted by themselves (see last bullet), about the current fundraising environment and what they are looking for:

• If you’re starting a company, the average time from startup to IPO (initial public offering) is approximately 10 years. Are you and your team passionate enough about your business concept that you can go this kind of distance?

• Two guys in a garage with a good patent lawyer is still a viable startup model.

• Stay focused.

• Have a good idea of how much money you want to raise.

• Test your key assumptions.

• Creativity on the part of management is a big plus.

• On the whole VCs are looking for the quality of the idea, how will you create value from it, and the team. Some VCs focus more on the idea. Some focus more on the team. One VC, after mentioning passion, quality of the idea, and the team brought up this insight: Gates, Zuckerberg, Ellison, Jobs, etc. would never, ever, be “the team” a VC would bet on. Go figure.

So there’s the insights. Use them as you see fit.

For a more general venue for fundraising that includes fashion companies, consider SeedCamp http://www.seedcamp.com/2012/06/back-in-the-big-apple-apply-to-seedcamp-new-york-by-sunday.html

Sandra Holtzman teaches CEO 035: Licensing.
She is the author of Lies Startups Tell Themselves to Avoid Marketing.

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By Sandra Holtzman, July 7, 2012 10:02 am

Image provided by Shutterstock http://www.shutterstock.com

On June 28 I was a sponsor and attended the New York Venture Summit sponsored by youngStartup Ventures. The event is geared towards tech – medical, IT and green/clean/sustainable companies. But there are also several VC panels which give attendees valuable information/advice about all areas of funding. The advice I heard applies to all companies. So I thought I’d share with you the key points echoed across multiple panels.

On the first panel I attended, this nugget showed up: VCs are more inclined to fund — or at least look kindly upon — a company that has a management team that has done it before. If a VC sees a recognizable name on the team, all the better.

The next gem was in answer to a question I posed — what’s your advice to a pre-revenue company to get your attention and funding? Alex Suh, Managing Director of California Technology Ventures, said, show me a quick animation of how your product works. So many start-up companies can’t do this. Now in fashion, depending on your product or service, that may be redundant because the fashion itself is the product and of course you’re showing it. But if you’re a fashion IT company, or provide some other product, take the information to heart.

On a later panel I heard some different (and perhaps contradictory) advice which was to focus on the quality of the idea and the value creation as well as the team. And an interesting point was raised about the team — if you look at Zuckerberg (Facebook), Gates (Microsoft), Ellison (Oracle), Jobs (Apple) not a single one of those people would have inspired investment by a VC when they came with the idea – in fact each of those people probably would have turned a VC off. Go figure.

Not sure you want VC money? Here’s a success story from a company that turned down eight figures:

http://www.businessinsider.com/jimdo-turns-down-vc-money-2012-6

Sandra Holtzman teaches CEO 035: Licensing.
She is the author of Lies Startups Tell Themselves to Avoid Marketing.