Over viewPREFACE to Inside Secrets to Venture Capital
Now if you're ready to get funding visit: http://www.angelvisioninvestors.com
VENTURE CAPITAL: Make No Mystique About ItEvery business needs capital.
Investors need to place their money where it can earn substantial returns.
We would think that these two basic facts would bring entrepreneurs and venture capitalists (VCs) together, but in fact a wide gulf separates the two groups. The entrepreneurial road is a tough one, full of setbacks, unforeseen perils, with substantial likelihood of disappointment. Frequently, entrepreneurs go into the process of finding capital completely unprepared for what awaits them. The world of the venture capitalist seems foreign to the entrepreneur, even hostile.
The terminology venture capitalists use sometimes doesn't even make sense: burn rate, highly scaleable, domain experience.
How the venture capitalists make their investment decisions remains a mystery. It is as if a thick, dark velvet curtain exists between the investor and the entrepreneur; the entrepreneur is left with a definite feeling of being on the outside looking in.
Why is the venture capital raising process such a mystery? There is no shortage of advice for entrepreneurs. Business magazines have begun to cover this subject more and more. But the advice usually addresses one particular aspect of the capital raising process, such as "Ten secrets for finding investors," or "Fifteen ways investors can cheat you." Magazines seem to think we all love lists.
We have seen quite a bit of misinformation being given to entrepreneurs by self-styled experts. We have attended numerous meetings of business networking organizations where a speaker got up and said: "I know the VCs and here's what they want." In many instances, this turns out to mean the speaker may have acquaintance with a half dozen or so Venture Capitalists, or have been involved in a few transactions. Out of this type of limited experience can be born a host of incorrect generalizations.
Entrepreneurs have an enormous thirst for information that will guide them toward successfully raising money. For the past 15 years we have owned and operated a consulting firm that assists small and mid-size companies with business planning and with strategies for finding capital. In the course of that work, advising companies ranging from a salsa manufacturer in southern Arizona to a real estate developer in Eastern Europe, we have been asked literally hundreds of questions by entrepreneurs looking for capital. The questions fall into these categories:
Can I get capital for my company?
How can I get capital for my company?
From whom can I get capital?
Entrepreneurs worry that:
It will take them too long to find capital and their business will suffer as a result
Now if you're ready to get funding visit: http://www.angelvisioninvestors.com
* They will not receive fair value in the transaction (a polite way of saying they will be ripped off by Venture Capitalists)
* Their business will be taken over by the Venture Capitalists
* They won't get capital at all and their company will not be able to grow, and will certainly fall behind competitors who have found the keys to the magic venture capital kingdom.
We thought it may be possible to bridge this gulf between entrepreneur and investor. We thought the best way to find out what Venture Capitalists really think was to ask them, to get the information from the VCs themselves. In early 1998, we initiated, through our consulting company, Profit Dynamics Inc., an annual Venture Capital Survey. We collected key statistics about the activity level of the venture capitalists, their deal size, and so on, that would be of interest to entrepreneurs. More than 250 venture capital firms have participated in these surveys over the last three years, including some of the largest in the world, as well as smaller funds with a regional focus. The firms that took part in the survey have made investments in thousands of companies.
The surveys also asked more qualitative questions, about how the venture capitalists go about finding companies, making investment decisions, and about the trends or changes in the venture capital industry that have come about because of the Internet or the vast amount of capital formation in the United States during the enormous stock market rallies of the last few years.
And we set out to construct this book so that it would include as much as possible the actual words of the venture capitalists themselves. Some were interviewed and you will see their names and firm names sprinkled throughout this book; others provided opinions for our surveys on a confidential basis and did not wish to be identified by name. We wanted to get as wide a range of opinions as possible. The candid comments of venture capitalists appear throughout this book.
You will find hundreds of tips, pieces of advice, pitfalls to avoid-even words of encouragement from venture capitalists. Input from hundreds of partners in VC firms are included in these pages, the result of three years of information gathering.
You will also see comments and opinions from hundreds of entrepreneurs who have gone about raising capital, and from service providers who assist entrepreneurs. Entrepreneurs feel a definite undercurrent of frustration, even hostility, toward venture capitalists. Entrepreneurs often feel as though the venture capital industry conspires to make the process of finding capital as difficult for them as possible.
We have also presented a series of "Deal Tales," stories from out experience with entrepreneurs looking for capital. All of the anecdotes about entrepreneurs we present in this book really happened, proving once again that truth is stranger than fiction.
For their part, venture capitalists express displeasure with the lack of preparation of entrepreneurs, who often approach VCs before their company, their strategy, their management team is ready.
We hope that when they finish reading this book, entrepreneurs will have a better understanding of how venture capitalists think, and VCs and angel investors will have a better understanding of the concerns and frustrations -- and aspirations--of the entrepreneur.
If there is one theme we seek to emphasize it would be: There is no such thing as "the VCs" or "the Angels", as some sort of homogenous class or clan. Investors are individuals with unique perspectives and business philosophies. A lot of commonly held generalizations about how investors seek out companies and make their investment decisions turn out to be incorrect, as you will see.
Think of this book as a panel discussion between several hundred investors and entrepreneurs, exploring their differences and seeking common ground. Fortunately, everyone doesn't talk at once.
We hope this book remedies to some degree the on-the-outside -looking-in problem entrepreneurs face, and simplifies the process of finding funding, showing them that the funding of start-up companies is not so much, a chaotic world after all. This knowledge should help the entrepreneur be in a more confident, sure-footed position when knocking on the venture capitalists' doors.
Now if you're ready to get funding visit: http://www.angelvisioninvestors.com
Now if you're ready to get funding visit: http://www.angelvisioninvestors.com
VENTURE CAPITAL: Make No Mystique About ItEvery business needs capital.
Investors need to place their money where it can earn substantial returns.
We would think that these two basic facts would bring entrepreneurs and venture capitalists (VCs) together, but in fact a wide gulf separates the two groups. The entrepreneurial road is a tough one, full of setbacks, unforeseen perils, with substantial likelihood of disappointment. Frequently, entrepreneurs go into the process of finding capital completely unprepared for what awaits them. The world of the venture capitalist seems foreign to the entrepreneur, even hostile.
The terminology venture capitalists use sometimes doesn't even make sense: burn rate, highly scaleable, domain experience.
How the venture capitalists make their investment decisions remains a mystery. It is as if a thick, dark velvet curtain exists between the investor and the entrepreneur; the entrepreneur is left with a definite feeling of being on the outside looking in.
Why is the venture capital raising process such a mystery? There is no shortage of advice for entrepreneurs. Business magazines have begun to cover this subject more and more. But the advice usually addresses one particular aspect of the capital raising process, such as "Ten secrets for finding investors," or "Fifteen ways investors can cheat you." Magazines seem to think we all love lists.
We have seen quite a bit of misinformation being given to entrepreneurs by self-styled experts. We have attended numerous meetings of business networking organizations where a speaker got up and said: "I know the VCs and here's what they want." In many instances, this turns out to mean the speaker may have acquaintance with a half dozen or so Venture Capitalists, or have been involved in a few transactions. Out of this type of limited experience can be born a host of incorrect generalizations.
Entrepreneurs have an enormous thirst for information that will guide them toward successfully raising money. For the past 15 years we have owned and operated a consulting firm that assists small and mid-size companies with business planning and with strategies for finding capital. In the course of that work, advising companies ranging from a salsa manufacturer in southern Arizona to a real estate developer in Eastern Europe, we have been asked literally hundreds of questions by entrepreneurs looking for capital. The questions fall into these categories:
Can I get capital for my company?
How can I get capital for my company?
From whom can I get capital?
Entrepreneurs worry that:
It will take them too long to find capital and their business will suffer as a result
Now if you're ready to get funding visit: http://www.angelvisioninvestors.com
* They will not receive fair value in the transaction (a polite way of saying they will be ripped off by Venture Capitalists)
* Their business will be taken over by the Venture Capitalists
* They won't get capital at all and their company will not be able to grow, and will certainly fall behind competitors who have found the keys to the magic venture capital kingdom.
We thought it may be possible to bridge this gulf between entrepreneur and investor. We thought the best way to find out what Venture Capitalists really think was to ask them, to get the information from the VCs themselves. In early 1998, we initiated, through our consulting company, Profit Dynamics Inc., an annual Venture Capital Survey. We collected key statistics about the activity level of the venture capitalists, their deal size, and so on, that would be of interest to entrepreneurs. More than 250 venture capital firms have participated in these surveys over the last three years, including some of the largest in the world, as well as smaller funds with a regional focus. The firms that took part in the survey have made investments in thousands of companies.
The surveys also asked more qualitative questions, about how the venture capitalists go about finding companies, making investment decisions, and about the trends or changes in the venture capital industry that have come about because of the Internet or the vast amount of capital formation in the United States during the enormous stock market rallies of the last few years.
And we set out to construct this book so that it would include as much as possible the actual words of the venture capitalists themselves. Some were interviewed and you will see their names and firm names sprinkled throughout this book; others provided opinions for our surveys on a confidential basis and did not wish to be identified by name. We wanted to get as wide a range of opinions as possible. The candid comments of venture capitalists appear throughout this book.
You will find hundreds of tips, pieces of advice, pitfalls to avoid-even words of encouragement from venture capitalists. Input from hundreds of partners in VC firms are included in these pages, the result of three years of information gathering.
You will also see comments and opinions from hundreds of entrepreneurs who have gone about raising capital, and from service providers who assist entrepreneurs. Entrepreneurs feel a definite undercurrent of frustration, even hostility, toward venture capitalists. Entrepreneurs often feel as though the venture capital industry conspires to make the process of finding capital as difficult for them as possible.
We have also presented a series of "Deal Tales," stories from out experience with entrepreneurs looking for capital. All of the anecdotes about entrepreneurs we present in this book really happened, proving once again that truth is stranger than fiction.
For their part, venture capitalists express displeasure with the lack of preparation of entrepreneurs, who often approach VCs before their company, their strategy, their management team is ready.
We hope that when they finish reading this book, entrepreneurs will have a better understanding of how venture capitalists think, and VCs and angel investors will have a better understanding of the concerns and frustrations -- and aspirations--of the entrepreneur.
If there is one theme we seek to emphasize it would be: There is no such thing as "the VCs" or "the Angels", as some sort of homogenous class or clan. Investors are individuals with unique perspectives and business philosophies. A lot of commonly held generalizations about how investors seek out companies and make their investment decisions turn out to be incorrect, as you will see.
Think of this book as a panel discussion between several hundred investors and entrepreneurs, exploring their differences and seeking common ground. Fortunately, everyone doesn't talk at once.
We hope this book remedies to some degree the on-the-outside -looking-in problem entrepreneurs face, and simplifies the process of finding funding, showing them that the funding of start-up companies is not so much, a chaotic world after all. This knowledge should help the entrepreneur be in a more confident, sure-footed position when knocking on the venture capitalists' doors.
Now if you're ready to get funding visit: http://www.angelvisioninvestors.com
The Publisher SaysThe inside story on finding the capital your business needs to grow
When it comes to finding capital-and the right investors for your business-entrepreneurs need all the help they can get. Brian Hill and Dee Power spent three years surveying 250 venture capital firms to find out what venture capitalists look for when putting their money in young businesses. Their results will give you all the tools you need to make smart decisions and avoid pitfalls and unnecessary risks, including:
How to create and present a business plan to investors
• Profiles of venture capitalists in action
• Enlightening true tales in venture capital
• How to organize a quality management team to attract investors
• The truth about referrals
• Tips on valuing your company realistically
• Doing due diligence: scams, vultures, and bottom feeders
• Negotiating the best terms for you and your business
Inside Secrets to Venture Capital will show you what it takes to attract the investors and the money you need to grow. It's everything you need to know to play the venture capital game-and win .
When it comes to finding capital-and the right investors for your business-entrepreneurs need all the help they can get. Brian Hill and Dee Power spent three years surveying 250 venture capital firms to find out what venture capitalists look for when putting their money in young businesses. Their results will give you all the tools you need to make smart decisions and avoid pitfalls and unnecessary risks, including:
How to create and present a business plan to investors
• Profiles of venture capitalists in action
• Enlightening true tales in venture capital
• How to organize a quality management team to attract investors
• The truth about referrals
• Tips on valuing your company realistically
• Doing due diligence: scams, vultures, and bottom feeders
• Negotiating the best terms for you and your business
Inside Secrets to Venture Capital will show you what it takes to attract the investors and the money you need to grow. It's everything you need to know to play the venture capital game-and win .
Table of Contents at: Angelvisioninvestors.com
Chapter 1: What is Venture Capital?
Chapter 2: Where Is the Industry Going?
Chapter 3: Your Search for Venture Capital.
Chapter 4: Presenting a Business Plan to Investors.
Chapter 5: What Do Venture Capitalists Think of the Business Plans They Receive?
Chapter 6: The Capital Crapshoot.
Chapter 7: Earthbound Angels.
Chapter 8: Venture Capital Decision Making.
Chapter 9: No, It's Not Location, Location, Location, But It Is Management.
Chapter 10: Finding Venture Capitalists Where They Work and Play.
Chapter 11: Getting to the Big Show: Venture Capital Conferences.
Chapter 12: Do Referrals Open Doors?
Chapter 13: Intermediaries and Other Wild Things.
Chapter 14: So Many Venture Capitalists So Little Time.
Chapter 15: Confidentialty-Prudence or Paranoia?
Chapter 16: The First Date-Meeting With Venture Capitalists.
Chapter 17: Valuing Your Company-A Small Dose of Reality.
Chapter 18: Due Diligence: A Two Way Street.
Chapter 19: Give a Little-Get a Lot: Negotiating.
Chapter 20: Closing the Deal and Living Happily Ever After.
Chapter 21: Putting It All Together.
Chapter 22: Final Thoughts: You Can Get There From Here.
Chapter 23: Words of Encouragement and Advice.
Chapter 1: What is Venture Capital?
Chapter 2: Where Is the Industry Going?
Chapter 3: Your Search for Venture Capital.
Chapter 4: Presenting a Business Plan to Investors.
Chapter 5: What Do Venture Capitalists Think of the Business Plans They Receive?
Chapter 6: The Capital Crapshoot.
Chapter 7: Earthbound Angels.
Chapter 8: Venture Capital Decision Making.
Chapter 9: No, It's Not Location, Location, Location, But It Is Management.
Chapter 10: Finding Venture Capitalists Where They Work and Play.
Chapter 11: Getting to the Big Show: Venture Capital Conferences.
Chapter 12: Do Referrals Open Doors?
Chapter 13: Intermediaries and Other Wild Things.
Chapter 14: So Many Venture Capitalists So Little Time.
Chapter 15: Confidentialty-Prudence or Paranoia?
Chapter 16: The First Date-Meeting With Venture Capitalists.
Chapter 17: Valuing Your Company-A Small Dose of Reality.
Chapter 18: Due Diligence: A Two Way Street.
Chapter 19: Give a Little-Get a Lot: Negotiating.
Chapter 20: Closing the Deal and Living Happily Ever After.
Chapter 21: Putting It All Together.
Chapter 22: Final Thoughts: You Can Get There From Here.
Chapter 23: Words of Encouragement and Advice.
“Inside Secrets To Venture Capital” By Brian Hill and Dee Power 1 “Inside Secrets To Venture Capital” John Wiley & Sons When it comes to finding capital—and the right investors for your business—entrepreneurs need all the help they can get. Brian Hill and Dee Power spent three years surveying 250 venture capital firms to find out what venture capitalists look for when putting their money in young businesses. Their results will give you all the tools you need to make smart decisions and avoid pitfalls and unnecessary risks, including: 9 How to create and present a business plan to investors 9 Profiles of venture capitalists in action 9 Enlightening true tales in venture capital 9 How to organize a quality management team to attract investors 9 The truth about referrals 9 Tips on valuing your company realistically 9 Doing due diligence: scams, vultures, and bottom feeders 9 Negotiating the best terms for you and your business “Inside Secrets to Venture Capital” will show you what it takes to attract the investors and the money you need to grow. It’s everything you need to know to play the venture capital game—and win . Selected Reviews "Pragmatic, real life advice from the people on the front lines of one of the world's most rapidly moving businesses. Required reading for anyone venturing forth into the arena!" Gerry Langeler, Partner OVP Partners ***** " The no-nonsense, interview style of the book provides the story "right from the horses mouth", and provides the reader with a road map as to how to (and how not to) navigate the maze of fund raising. The advice provided on realistic valuation of the company and preparing a business plan can be invaluable. Must read for anyone who is serious about raising venture capital" Michael A. Lechter Esq. Rich Dad Poor Dad Advisor and author ***** "Entrepreneurs can learn from book on venture capitalists. Oil and vinegar do not easily mix, nor do entrepreneurs and venture capitalists. Brian E. Hill and Dee Power explore how VCs and Es differ in their premises, expectations and frustrations in their book Inside Secrets to Venture Capital. Those differences are so deep that the 300-page book could easily have been titled 'Venture Capitalists are From Mars; Entrepreneurs are from Venus.' Joe Vanacore Staff Writer Sacramento Business Journal ***** "The book is well organized and easy to digest, yet sophisticated as well. The authors address questions the would-be entrepreneur might feel are just too simple to ask. For example: What is venture capital? Why do venture capitalists say no? Will a no ever become a yes? Do you really “Inside Secrets To Venture Capital” By Brian Hill and Dee Power 2 need a referral? If you just absolutely cannot find a referral, then what? What is intellectual property? What is quality management? "Every chapter has blunt, verbatim advice and insight from a VC or, at times, an entrepreneur -- and their wisdom covers everything from negotiating to due diligence to sample disclaimers for a business plan." After The Gold Rush, BusinessWeek Online, Theresa Forsman ***** You can order Inside Secrets To Venture Capital From:
You can find Inside Secrets To Venture Capital at bookstores nationwide And of course you can get an autographed copy just visit http://www.angelvisioninvestors.com “Inside Secrets To Venture Capital” By Brian Hill and Dee Power 3 Inside Secrets To Venture Capital by Brian E. Hill and Dee Power copyright all rights reserved worldwide Chapter 1 What Is Venture Capital? Venture capital investing is all about a willingness to accept a high degree of risk in order to obtain the potential for an extremely high rate of return. Venture capital investing is also about a desire to build a small company into a large one, to build a company that no one has ever heard of into a company that makes headlines. And it is about the turbulent world that surrounds a company at its inception--the constantly changing objectives, strategies, dreams, owners, personnel, and results, the peaks and valleys. If you go out to the Pacific Ocean and watch an island being formed from volcanic activity--the very beginning of land being created--what do you observe? A tremendous amount of heat and a tremendous amount of gas. It's a dangerous, unstable place to be, and it is impossible to predict how the whole thing will end up looking when the fires cool and the land is made. The same things happen when a company is being formed. The venture capitalist's job is to be able to tell what is heat and what is just gas. What Does an Investor Have? Money, and the ability to raise money Experience in building companies An understanding how wealth is created from start-up to the exit event Contacts to help build the company's distribution channels Contacts to help put together the management team What Does an Entrepreneur Have? An idea: a process, a product Something proprietary An insatiable desire to succeed Business associates with some of the skills and experience needed What Each of Them Don't Have Without entrepreneurs, investors don't have: The time or personnel to manage companies on a day-to-day basis The possibility of earning returns that are substantially higher than in the p public stock market Without investors, entrepreneurs don't have: “Inside Secrets To Venture Capital” By Brian Hill and Dee Power 4 The funding to fully exploit the opportunity of their product/service and . their market. The venture capital industry fills in these gaps. A venture capital fund is really a mutual fund that invests for a very long term, has a relatively small number of "stocks," and seeks very high returns. Brief History of the Venture Capital Industry The idea of investing capital in risky ventures with a tremendous upside is not new. The explorers who sailed the globe in the fifteenth and sixteenth centuries looking for fabulous treasure in exotic lands had to get their financing from somewhere. The lucky ones had access to the king or queen and the royal treasurer. Even if you had a great reputation as a seagoing adventurer, it wasn't easy to get an audience with the crown's money men, unless you had someone on the inside to make the contact for you. The more things change With the Industrial Revolution, funding technology ventures eventually became an interesting diversion for the very rich. In the late nineteenth century, a prolific inventor sought $30,000 in research and development (R&D) funding for a device he claimed would replace the universally popular gas lamp, although attempts to commercialize other similar devices had failed for several decades--they generated an unsafe amount of heat, and the materials used to manufacture the alternative devices were too expensive. A syndicate of financiers, including J. P. Morgan and the Vanderbilts, decided to go ahead and fund the development of the new technology. Potential financial partners might have been concerned about the inventor's lack of formal scientific training or his weak financial management skills. But the inventor was Thomas Edison, and he produced the incandescent electric light bulb. This shows us that if you notice J. P. Morgan is the lead investor in a deal, go ahead and jump in. Prior to the Second World War, companies seeking start-up capital often relied on wealthy individuals or wealthy industrial families as backers--" angels," as we call them today. These were old-money type of investors, and deals were often consummated in the quiet dining rooms of country clubs. These were careful investors who knew how long it took to accumulate wealth. The first true venture fund, in that it raised institutional capital and invested in earlystage ventures, is said to have begun in 1946. The first letter to an entrepreneur declining investment went out that same year, and the phrase "Sorry, your venture does not fit our investment parameters" was coined. The first business plan is thought to have been written in 1954, revised throughout 1955, and read by an investor for 12 minutes sometime in early 1956. “Inside Secrets To Venture Capital” By Brian Hill and Dee Power 5 The U. S. Government passed the Small Business Investment Act in 1958, which created incentives for the development of Small Business Investment Companies (SBICs) that would provide financing for small companies that did not have ready access to the capital markets. The country was founded in 1776. Thus it only took the government 182 years to figure out that the small business person needs capital. Silicon Valley emerged in the 1960s, when a company there, south of San Francisco, became the first to make computer chips completely out of silicon. Developments related to this technological breakthrough required venture capital, and a community of engineers and scientists, investors, and managerial talent sprang up. This pattern would later be repeated in other areas of the United States: Plant a seed of technology, fertilize with management talent, water with abundant amounts of venture money, grow companies, and hope for a bountiful harvest three to seven years later. Over the next 20 years the number of venture capital companies and investment groups in the United States swelled to several thousand and the amount of venture investment grew steadily to the tens of billions of dollars. The investment concentration of these companies changed with major technological innovation: biotech, computer hardware and software, semiconductors, communications, and the Internet have all had their day in the sun. Entrepreneurs have an innate sense of what investment area is currently "hot" because it's the area completely unrelated to whatever company they are seeking capital for at the time. In the mid-to late 1990s, a tremendous upsurge in stock prices created thousands of new millionaires in the United States, many of whom began to seek out investments in entrepreneurial ventures. These new "angel" investors are quite different from the angels of old. With nearly unlimited access to information, they have the ability to make much better informed decisions than their predecessors. After all, it can't be that hard to be a venture capitalist, can it? Who Are the Venture Capitalists? They are commonly called "the VCs," as if they are a completely homogenous group with uniform background, experience, attitudes and business philosophy. The popular image of the venture capitalist is a middle-age person with a finance background, probably from one of the nation's premier universities. A kind of pin-stripe suit person. Very focused on rate of return. A "bottom-line" guy. The truth is very different. Some VCs are quite young. It is not unusual these days for partners in venture capital firms to be in their early 30s. Increasing numbers of women are entering this once very male-dominated profession. They are not all finance gurus, either. If you examine the background of venture capitalists that are posted on their web sites, you will see that many have an engineering or technical background, some are marketing experts, and quite a few have general business experience related to starting “Inside Secrets To Venture Capital” By Brian Hill and Dee Power 6 and growing small companies into large ones. In medical-oriented venture capital funds, a number of the partners are physicians or scientists. Not all venture capitalists are even from the United States. Because business is increasingly conducted on a global basis, you will see partners in venture capital firms from Europe, Asia, and other parts of the world. ADVICE FROM A VENTURE CAPITALIST Christie Hart, Director of Entrepreneur Services, Draper Atlantic, www. draperatlantic.com What is the profile of a typical partner in a venture capital firm? "Often you see that they have earned an MBA from a top school. They may have professional investment management experience. Some are exCEOs, particularly those who ran a technology company before. Generally the partners are around 40 years old." Their wardrobe is more varied than you might think. We've seen venture capitalists wearing jeans. Even shorts and sandals. It wasn't a pretty sight, but we've seen it. They do tend to be highly educated, having attained multiple advanced degrees. And rather proud of that fact. Finance/ Law and Engineering/Finance are popular combos. Some are stuffy and "old school" enough to seem as if they would be quite comfortable living in an F. Scott Fitzgerald novel. Others are much more down to earth, even genial. They don't all belong to country clubs, but of course they all could if they wanted to. ADVICE FROM A VENTURE CAPITALIST Dennis Spice, Managing Partner, Open Prairie Ventures, www.opven.com Where do the partners of venture capital firms come from? What is their background? "Our firm may be a little bit different than the typical venture fund. One partner has always worked in the area of funding companies. He has been a merchant banker putting his own money in deals. From the time he was still in school he was training to do this type of work. He went to law school never planning to practice law, but to use this background to help in negotiating deals. He got an MBA for the same reason. Few people know so early on that venture capital is what they want to do. "I came out of the public investment sector, having managed pension funds. The $6 billion fund I managed had a percentage allocated to “Inside Secrets To Venture Capital” By Brian Hill and Dee Power 7 venture capital. I found I enjoyed the venture capital part of my work more than the stock and bond part. "One partner has a background working in portfolio companies. He has a Ph. D. in Physics and Math and has helped young technology companies come out of universities and acted as their COO. He has been on the other side of our business. "The background of venture capitalists is fairly varied, not just Wall Street people, as is somewhat true with firms that specialize in later stage deals. Early-stage and seed investors typically have assorted backgrounds. Analysts we are hiring today to be future partners have degrees in engineering. This allows us to help entrepreneurs more. If we all had finance backgrounds, it might not be as rich an environment. I enjoy working with the technical people on our team, who bring a totally different perspective, adding to our business." WHERE DO VENTURE CAPITAL FIRMS RECRUIT THEIR PARTNERS AND EMPLOYEES? "VCs are just businesspeople," one entrepreneur said matter-of-factly after going through the process of bringing venture capital into his company. They work extremely long hours, never getting fully "caught up" with the vast amount of business plans and companies they have to review and process, the numerous board meetings of portfolio companies they have to attend. ADVICE FROM A VENTURE CAPITALIST Christie Hart, Director of Entrepreneur Services, Draper Atlantic, www.draperatlantic.com How do VC firms recruit their partners and employees? What qualities do they look for in new partners? "They must be super smart and creative. Engineers with top school MBAs are very much in demand." WHY DO VENTURE CAPITALISTS SEEM SO FOCUSED ON CERTAIN GEOGRAPHICAL AREAS? A significant number of venture capital firms will consider investing in companies throughout the United States. Many others, however, limit their interest to certain regions, or even certain states. “Inside Secrets To Venture Capital” By Brian Hill and Dee Power 8 The main reason for this is simply that it is easier to visit companies and attend meetings with management after funding if the company is within driving distance or at most a short plane trip away from the venture capitalist's office. Another reason is that the venture capital firms tend to locate their offices in areas that are particularly fertile regarding the number of good companies to invest in. They don't see a need to spend time looking outside this area. The reverse is also true: Entrepreneurs are attracted to areas with an infrastructure of venture capital firms and professional service providers that work with start-up or emerging companies. And then the best managerial talent is attracted to these same areas because there are many challenging job opportunities with the potential for lucrative stock options. So you end up with pockets of the country that have all the ingredients--investors, the hottest technologies, the best management talent, a complete service infrastructure. It's almost as if "It takes a village to build a company." Hmmm. Kind of a catchy phrase. Entrepreneurs puzzle over venture capitalists who say, "We invest primarily in Southern California but are willing to look at excellent opportunities in other parts of the country." "Should I contact that venture capital firm or not?" asks the entrepreneur in the Midwest, who of course believes that his company represents an excellent opportunity. In this case the answer is: ??????? Why Is Finding Capital So Difficult for Entrepreneurs? There are a number of reasons why entrepreneurs have so much trouble finding capital. Entrepreneurs don't understand how the process works and do not understand the thought processes of investors. Investors end up seeming more elusive than they really are. Entrepreneurs don't know where to look for capital, and do not have the contacts necessary to be introduced to investors. Different capital sources fit different stages of investment and type of companies. Raising money takes a certain flair for salesmanship that not everyone has. Some individuals are better at doing than talking. Entrepreneurs underestimate how long it will take to find investors. Raising money is a time-intensive process that takes time away from what the entrepreneur really wants to do: build a successful enterprise. And the most important reason: The funding of private enterprises is not an efficient market. It is getting more efficient, but it has a long way to go. It's certainly not an efficient market when willing buyers and willing sellers of a commodity (equity in “Inside Secrets To Venture Capital” By Brian Hill and Dee Power 9 emerging enterprises) have such an incredibly difficult time finding each other. You would never say the market is efficient when the pricing for the commodity is established by guesswork and the opinions of a handful of potential buyers. And it is not an efficient market when the seller is allowed to meet the buyer only if the seller has met the good friend of a good friend of the buyer at some cocktail party sometime, somewhere. Fortunately, we will see in later chapters that the Internet is bringing down some of these barriers that keep the entrepreneurs from having access to the investors. But the market inefficiencies show why entrepreneurs should not be too hard on themselves when it takes more time to find capital than they imagined it would. A free and open marketplace would be the ideal; it's not here yet. What Entrepreneurs Don't Know About Venture Capitalists Venture capitalists have to go out and raise money, too. Wealthy individuals, or angels, may use their own funds to invest, but professionally managed venture capital firms get the majority of their funds from outside the partners in the firm. They raise the money from corporate pension funds, corporations, public pension funds, foundations, endowment funds, wealthy individuals, and insurance companies. Venture capitalists have people watching them, too. The funds are often organized as limited partnerships, with the venture capital firm serving as a general partner. The other institutional investors are the limited partners. They may talk like financiers, but they are actually employees of a financial institution-- much like your local commercial banker. Venture capitalists will tell you they are much smarter than most commercial bankers, however. Venture capitalists are under a certain amount of pressure to find good investments for the fund within a reasonable length of time, just as commercial loan officers in banks are charged with going out and finding companies that will make good loan prospects. Venture capitalists have to go out periodically and raise money themselves. This is why they have a keen understanding of what the entrepreneur goes through trying to find money. Venture capitalists will meet with the managers of the large pension funds and the other funding sources mentioned above and describe what the investment focus of the new venture fund is planned to be, and why the venture capitalists believe the partners of their firm are uniquely qualified to find great investments and build portfolio companies. This is why we see venture funds that are extremely focused on a narrow range of investments--some won't do "seed" stage ventures, for example; some only invest in telecommunications, or medical technology. They have secured funding for the venture fund based on the understanding that they will stick close to these criteria. That is why, as a general rule, no amount of discussion or sales effort on the part of an entrepreneur, no matter how persuasive, will get a venture capitalist to deviate very far from the established investment focus of the firm. The institutions that place money in venture capital funds do so because of the historically superior investment returns venture capital funds have been able to achieve “Inside Secrets To Venture Capital” By Brian Hill and Dee Power 10 relative to other classes of equity investment. Let's say that in the long run you are able to achieve a return of 10 percent by investing in publicly traded securities. The historical returns venture capital funds have been able to achieve have been closer to 25 percent--a substantially better performance--and even higher in recent years. Some top-performing funds achieve average annual returns of 100 percent or more. Institutional investors typically allocate only a very small percentage of their total investment capital in venture capital funds because there is a great deal of risk in this type of investment. The 25 percent rate of return just mentioned comes about by averaging the widely varying performance of the individual investments, or companies funded, in the venture capitalist's portfolio. It is often said that venture capitalists seek an annual return of 30 to 40 percent or higher on each investment. The 25 percent average return comes about because some companies are complete busts and the investment has to be written off. Some companies fail and the investment has to be written off. Others will not reach growth expectations but are still viable enterprises. There will be solid companies that perform as expected in their business plans. It is hoped that there will be superstars that become phenomenal initial public offerings (IPOs) or will be acquired by other companies for large multiples on revenues or earnings. In venture capital investing, you can have seven out of 10, or 70 percent of your investments be disappointing and still end up with an excellent total return for your investors. The key to the whole thing is finding that one superstar. If we move that company into the "Viable" column, the total return drops to 16 percent. At that rate we might as well stay invested in our small-cap public stocks, and avoid all the trouble of finding, funding, and guiding these early-stage enterprises. This is why venture capital investing is so much more exciting than managing a fund of publicly trade stocks: How often can you earn a 100 percent return each year on a stock you pick? Even the high-flying IPOs we have seen on Wall Street the last several years often run back down just as fast as they run up. LOOKING BEYOND THE FUNDING Money is only part of the contribution venture capitalists make to growing businesses. They offer knowledge about how to grow companies, the challenges all entrepreneurial companies face, how to build a distribution network, and how to attract top-flight management. They understand the entire life cycle of a company, from getting started to going public or being acquired. Venture capitalists manage a portfolio of investments, much as mutual fund managers do with public companies. They consider diversification by stage of company and industry. They hold onto investments longer than mutual fund managers. An entrepreneur may get turned down by a venture capitalist not because the company does not have investment “Inside Secrets To Venture Capital” By Brian Hill and Dee Power 11 merit, but because the company does not fit into the overall strategy of the fund. Perhaps the fund already has several other investments in similar companies. Capital availability is not distributed evenly across the United States. Northern California and the Northeast states dominate in terms of the number of companies being funded and the total capital committed to companies there. The pace of investment is picking up significantly in the Midwest and Southeast, however. Companies located in places outside the venture capital hotbeds have a more difficult time finding investors. Entrepreneurs still think venture capital is available only to high-technology companies. The majority of companies funded have a technology component, yes, but it's not the whole picture. Many entrepreneurs are surprised to find out there are venture capital funds that focus solely on retail enterprises, for example. ADVICE FROM A VENTURE CAPITALIST Patrick Sheehan, Partner, 3i Group, www.3i.com How does a VC firm determine its investment focus? "This varies hugely by firm, based most often from the experience profile of partners in the firm, which largely comes from the deals they've done before. The focus evolves naturally, and rationally. If you're looking for better areas to invest, for us they tend to be areas undergoing rapid change. Why has the Internet been a great area? Because it's actually a catalyst for rapid change. We look first at change rather than technology. Technology is the engine of change, eventually." How often would partners get together and evaluate the investment focus? "This again depends on the firm. We move tactically on a regular basis. Continual discussion takes place. Certainly, quarterly a more deliberate debate takes place, and then an annual debate. We see that the investment focus of a venture capital firm is not set in stone. It is subject to fairly frequent review and possible change." OTHER THINGS ENTREPRENEURS WONDER ABOUT VENTURE CAPITALISTS If all the venture capital is going into Internet companies, who is going to finance the companies that make the products to sell in the e-commerce sites? If they do too much due diligence on a deal, does it become undue due diligence? “Inside Secrets To Venture Capital” By Brian Hill and Dee Power 12 Venture capitalists tell you they have to have exactly 60 percent of your company, a calculation they make based on your projected earnings, but then tell you they have no confidence in your projections. Venture capitalists say that evaluating the competence of the management team is a critical part of investing, but it is almost impossible for you to get one of the partners on the phone to introduce yourself, so the partner can get to know you. The months drag on while you wait for them to make a decision, but they want to hold you to a precise timetable for reaching the milestones in the business plan. ADVICE FROM A VENTURE CAPITALIST Patrick Sheehan, Partner, 3i Group, www.3i.com What is it that entrepreneurs don't understand about raising capital? What surprises them about the process? "Entrepreneurs are a diverse group to try and generalize about. For some, there are no surprises in the process at all. For others, a surprise arises out of the failure of entrepreneurs to put themselves in the shoes of the investor. That is the thing most often lacking." Larry Kubal, Managing Director, Labrador Ventures, www.labrador.com "I think the biggest misunderstanding entrepreneurs have in the fundraising process is that their venture is (or should be) as important to the people they are pitching as it is to themselves. To me, any given deal is one of thousands that comes through our offices every year. If it is really good, it is one of hundreds in which we may develop a sincere interest. At the very best, it could be one of the 10 or so we fund every year. An entrepreneur's venture is his or her dream, something to which they are dedicating their lives to make happen. Entrepreneurs must understand that their unique jewel is but one in a constant flow to a VC with many gems before and after it. At Labrador, we are aware of, and empathetic with, this fundamental difference in perspective. I believe it is much tougher to recognize clearly from the entrepreneur's side. "Entrepreneurs also miss the sometimes subtle differentiations between venture funds. The venture business is quite fragmented and segmented along multiple dimensions. At Labrador, for example, we invest relatively early in a company's life cycle. When we are deploying $2M per company, it is unlikely that our heads will be turned by a $100M financing “Inside Secrets To Venture Capital” By Brian Hill and Dee Power 13 opportunity. Understanding these specialties improves an entrepreneur's chances of success." What Venture Capitalists Don't Know About Entrepreneurs Venture capitalists know everything about entrepreneurs. They've seen it all before. That's why entrepreneurs feel as though they are at a distinct disadvantage during negotiations. THE CONFLICT BETWEEN THE ENTREPRENEUR AND THE INVESTORS How would you characterize the relationship between an investor and an entrepreneur--as predator/prey? As father/offspring? As partner/partner? As boss/employee? Or as benefactor/beggar? If you ask investors how the relationship is supposed to work, they would uniformly respond that it should be partner/ partner. Does it work that way in real life? It can, but not necessarily. And it's not all the investors' fault. POINTS OF CONFLICT Many Entrepreneurs Don't Really Want Partners, They Want Money. At the heart of the entrepreneurial desire is the need to be in control, in command. Many talk a good game about wanting to have the investor involved, but they don't really want to. Forming a partnership with an investor inherently creates the potential conflict over who is in control, but there's no way around doing it that way. It can be far too expensive for a small company to go public on its own. And small companies need expertise investors have to offer. The partnership with the investor results in the entrepreneur's strategies or decisions being questioned, not an easy thing for some people to take. Entrepreneurs can get excessively "stuck on" certain ideas and resent input from investors. They can have a kind of arrogance regarding the benefits or what they perceive as the true perfection of their products or services. Wow, How Long Does It Take to Grow an Ego That Large? The meeting between the investor and the entrepreneur amounts to the clash of two (or more) tremendous egos. Anyone who has met a venture capitalist at a trade show, a venture capital conference, or any other event can attest that many of them can't wait to tell you how much they know about every aspect of every industry and every enterprise. They always know more than you do--even if you have worked in the industry for a number of years--and they will gladly tell you so. The more successful they are and the more money they have made, the larger the ego grows. “Inside Secrets To Venture Capital” By Brian Hill and Dee Power 14 It is an interesting facet of capitalism in general that the people who reach the top and acquire the most wealth eventually, conveniently, forget the sheer luck, the being-in-theright-place-at-the-right-time phenomena, that was greatly responsible for their success, and recall only the strokes of individual genius that led to their (inevitable) victory. When dealing with venture capitalists, there's no getting around this ego factor. It is a state of nature with them. Ah, but the entrepreneur is not so innocent in this regard, either. Several years ago we arranged a meeting for an entrepreneur with a venture capital group that specializes in expansion capital for industry consolidation deals, putting several companies together to create a larger, more competitive entity. The partner of this group is a very pleasant, fair, easy-going individual, whose firm has done extremely well; and his family had done well for generations. The entrepreneur was, at best, a guy with a spotty track record and a tiny company with big dreams. The entrepreneur shook hands with the venture capitalist, sat down in the man's office, and the first thing out of his mouth was "I'm here to see if you're good enough to be my venture capital partner." You probably already can guess this meeting only lasted about two minutes longer. Back in the 1960s there was a wonderful episode of a science fiction TV series about an older, vastly wealthy businessman who grew tired of not having any challenges any more and longed to go back to the beginning of his career and do it all again. He visited a rather sinister travel agency that accommodated his dream of going back in time. He returned to the small town where he started, a young man again. But this time he missed some of the key connections, the seemingly small incidents of good fortune, that actually caused him to succeed in such a big way. This time things went sour for him, and he learned an important lesson: Business is a team sport. Class Distinction, or Entrepreneurs Are from Steerage; Venture Capitalists Are Strictly First Class. Entrepreneurs fret over whether they really belong at the negotiating table with these financial wizards, these venture capitalists. Entrepreneurs feel like the ultimate "outsider." It's sort of like, in the film Titanic: Rose, the young, rich girl, explains to Jack, the young vagabond, that the rich men in first class leave the table after dinner and retire to a private room--strictly guys only--to smoke big cigars and congratulate themselves on being masters of the universe. Meanwhile, we see that the fun party is actually in steerage, where they are drinking beer and dancing, planning all the adventures they will have when they reach America. These would be the entrepreneurs. When you see the Statue of Liberty for the first time, it is a thrill akin to seeing your company go IPO. Jack gets to go to a venture capital meeting (dinner in first class). He sees that indeed the VCs do retire to the smoking room (board meeting). Rose represents capital (what Jack desires). The VCs look down on Jack because he doesn't have the money but kind of envy him because of his freedom (entrepreneurial spirit). The VCs aren't sure Jack should have the capital; they put obstacles in his path. Jack doesn't think he can do without it. The boat sinks and takes the VCs and the young entrepreneur with it. Rose's heart “Inside Secrets To Venture Capital” By Brian Hill and Dee Power 15 goes on to be the subject of an annoying pop ballad. Some would argue that a lot of VCs are about to get their come-uppance as the investors in the Titanic did. Of course, nowadays it would be called WhiteStarLine.com. The Indelicate Subject of Greed. Greed seems to be one of those topics no one wants to discuss. Journalists who were critical of the merger mania and some of the perceived opulent excesses of the Reagan administration referred to the 1980s as the Decade of Greed. After the wild ride we have seen in the equity markets of the last several years, the 1980s seem like a quiet evening in a monastery by comparison. One venture capitalist explained it to us this way: "We hope the market dip takes the dumb money out of the [Silicon] valley. New York investment bankers who have never 'built' companies from the ground up have come here thinking they can become venture capitalists. In reality they're doing it because of the greed factor. In Silicon Valley past, it was always about working together, building the best product and the best companies. Now it's about money. Don't get me wrong: That's a great goal, but when it's the only thing it tends to destroy. I'm concerned what this trend may mean for the traditional Silicon Valley culture." Investors are not alone in their enjoyment of money for its own sake. Some entrepreneurs are skilled at playing the game of greed as well, as we see. DEAL TALES: LIFESTYLES OF THE RICH AND FATUOUS A young, energetic, upwardly mobile young woman decided to establish a company around a product that had lots going for it: strong niche, huge market, little competition, and great operating margins. As we were completing her new company's business plan, she decided to make a few changes in the financial forecast. She tripled her projected salary, added a Lexus as her company car, and included her membership dues at the local country club as part of the company's expenses. As she explained it, she had a lifestyle to maintain and just because she was starting a new company didn't mean she was sacrificing any personal comforts or security. An investor would just have to realize that when committing funds to her business. Needless to say, she's still looking for that special someone. The lesson she had never learned was that investors are not in the business of supporting lavish lifestyles. While a reasonable salary for an entrepreneur is expected and should be included, don't give yourself a raise before the company hits break-even. ### Entrepreneurs Feel Intimidated by Venture Capitalists. The whole process of raising capital from venture funds at times appears designed to make the entrepreneur feel small. It seems a little out of whack that the entrepreneur is made to feel grateful for the “Inside Secrets To Venture Capital” By Brian Hill and Dee Power 16 opportunity to talk with the venture capitalist. Venture capitalists have a commodity, money, that they have to sell in order to satisfy the limited partners of the fund who have put up the money. Commercial lenders in banks are practically flogged to go out into the marketplace and bring in loan deals. Bankers welcome you at first; they get around to treating you badly much later, when the deal is closer to closing. Some venture capitalists act as if they are doing you a favor by reading your business plan. This pattern, once set, continues through the transaction. Some entrepreneurs can get seriously psyched out. We knew one entrepreneur who could talk eloquently for hours about the great things he was going to accomplish with his venture after it was funded. He was dedicated, experienced, enthusiastic--and terrified of venture capitalists. The night before a meeting at a VC's office, he kept us enthralled in the hotel lobby bar as he unfolded his vision for growing the business. Next morning, we sat around a highly polished black lacquer table at the venture capitalist's office in Boston. The first question the VC posed to the entrepreneur was "So tell me, Bill, why do you want to be CEO of this company?" Before his throat completely tightened up, all the entrepreneur could utter was "Ahhhhhh." If we were really talking about a partnership, why is the purpose of the first meeting to have the company present its merits to the venture capital firm? Why isn't half the meeting spent with the company presenting to the venture capitalists and half the meeting the venture capitalists presenting why they make such great partners? That Sound You're Hearing Is the High-Pitched Whine of the Entrepreneur. Children on a long, cross-country automobile trip can often be heard to say, in a whiny tone of voice, "Are we there yet?" These children grow up and inevitably want to start their own business. Twenty-five years later, they are still asking the same question. They think investors take far too long analyzing the situation before investing in their company. They think service providers, including attorneys, should work for them for free, just for the sheer honor of being there when their company was started. They blame everyone else, even become bitter, when the task of starting a company proves more difficult than they bargained for. They are never appreciative of others' efforts, because they still aren't "there yet"--they aren't rich. They have an inability to enjoy the journey. Is it possible that selfishness is one of the traits that characterizes the entrepreneurial temperament? And how does an investor even begin to form a successful partnership with an entrepreneur who lets this selfishness take over the transaction? Investors and Entrepreneurs Don't Speak the Same Language DEAL TALES: BAD AURA, BAD DEAL “Inside Secrets To Venture Capital” By Brian Hill and Dee Power 17 The owner of a high-tech manufacturing company asked us to help him find expansion capital for his business and introduce him to some venture capitalists. He was a New Age type of person who insisted on playing sitar music on his office stereo during meetings and had a large collection of crystals displayed all over his home; they helped him focus his energy, he said. We don't even need to bother mentioning that this company was in California. A venture capitalist in San Diego got really excited about investing in the company. We gave the venture capitalist's brochure to the CEO to study before the first meeting, so he could ask some good questions and the two of them could bond. A few minutes after getting the brochure in the mail, the CEO called us and said he was canceling the meeting because when he held the brochure in his hands, it gave off a negative aura. ### If the Object Is to Confuse, Buzz Words Are the Best to Use. Venture capitalists spend a lot of time talking with other venture capitalists. They congregate together, as well, clustering their offices in places such as the famous Sand Hill Road in Menlo Park, California. And there are areas of the San Francisco business district that, if you drop a business plan out a window, you have a 50/ 50 chance of hitting a venture capitalist walking on the street below. Using that method, at least you wouldn't have to worry about getting the investor's attention. As with any group that develops such a close community, venture capitalists generate their own jargon. One of the first buzz words we learned occurred 15 years ago while being quizzed by a venture capitalist about the projections in a company's plan. "Just let me know the burn rate," he said gruffly. "Burn rate?" we mused, wondering if he had some process whereby he turned all the business plans he received into clean-burning firewood. All he meant was "How fast will the company use the capital?" He could have just said so. But buzz words are used to allow others to ascertain if you are a member of their club. They also talk about the investment being done in "tranches." What could this possibly mean? We're working "down in the tranches"? Could it be as simple as meaning the total amount of investment required will be broken into segments? One of the best recent buzz terms is "know your space" or your "market space." This doesn't refer to finding out the exact square footage of your apartment. This term sprang from the Internet and the concept of cyberspace. It means, if the market you operate in could be measured in physical dimensions, how large would it be? Your company's market space therefore is how large a share of the market you project that you can obtain. At least that's our best guess for right now. Just when we caught on to what "market space" meant, they invented a new term, "domain experience." When we figure this one out, we'll get back to you. Maybe they borrowed this term from that famous episode of Seinfeld. “Inside Secrets To Venture Capital” By Brian Hill and Dee Power 18 Clearly, investors and entrepreneurs don't speak the same language. What the investor says: "Your business model is interesting." What the entrepreneur hears: "How much should I write the check for?" What the entrepreneur says: "We don't quite have our management team in place yet." What the investor hears: "We have no experience, no track record, and I'm not exactly sure what a CEO does." What the investor says: "Thank you, but we'll have to decline this opportunity. It doesn't fit our investment parameters." What the entrepreneur hears: "Just keep talking and I'll eventually cave in and invest." What the entrepreneur says: "We've been approached by several people who are very interested, our first round of financing is almost oversubscribed, but we'd like to give you the opportunity to invest." What the investor hears: "Please, please, please invest, you're our only hope." What the investor says: "How much capital were you looking for?" What the entrepreneur hears: "To whom should I make out my check, and how much do you need?" What the entrepreneur says: "To reach the revenue goals in our business plan, we only need to reach 1 percent of a $10 billion market." What the investor hears: "We haven't got a clue as to who our market is or how we're going to reach it." What the investor says: "Your management team certainly has an unusual background." What the investor means: "Where did you find these guys? Leftovers from the Chronically Unemployed convention?" What the entrepreneur says: "We would welcome suggestions and input by you extremely experienced investors in setting the strategic direction of our company." What the entrepreneur means: "There's no living way these old fuds are going to mess with my idea." Now if you're ready to get funding visit: http://www.angelvisioninvestors.com
Reviews of
Inside Secrets To Venture Capital
Now get your free copy at: http://www.angelvisioninvestors.com
Comments from the readers of "Inside Secrets To Venture Capital"
From Venture Capitalists
Gerry Langeler, Partner OVP Partners
"Pragmatic, real life advice from the people on the front lines of one of the world's most rapidly moving businesses. Required reading for anyone venturing forth into the arena!"
***
Lee Mercer, President, National Association of Small Business Investment Companies
"Easy to read and a concise but thorough explanation of venture capital and the paths and processes that lead to it. Entrepreneurs looking for anything other than a standard bank loan will be better prepared for their search if they understand the subjects dealt with in "Inside Secrets to Venture Capital."
***
From Professionals
"Must read for anyone who is serious about raising venture capital"
Michael A. Lechter Esq.
Squire, Sanders & Dempsey Legal Counsel Worldwide
"When the typical entrepreneur begins the process of seeking financing, his or her view of the world and the venture capitalist's view of the world are often "misaligned". In many instances the misperceptions of the entrepreneur lead to frustration and disappointment. Inside Secrets To Venture Capital can help an entrepreneur seeking financing avoid those misperceptions. Inside Secrets provides a fascinating exploration of the process of raising capital, and a contrast of the differing perspectives of all players --the professional venture capitalists, the high-wealth individual "Angels," and the capital-seeking entrepreneur. The no-nonsense, interview style of the book provides the story "right from the horses mouth", and provides the reader with a road map as to how to (and how not to) navigate the maze of fund raising. The advice provided on realistic valuation of the company and preparing a business plan can be invaluable.Inside Secrets To Venture Capital is a 'must read' for anyone who is serious about raising venture capital."
"Valuable handbook and reference guide"
Nigel A.L. Brooks, President
The Business Leadership Development Corporation, Strategic Management Consultants
"Raising capital is a mystifying process for most entrepreneurs. They get very little feedback from potential investors on the quality of their business plans, the packaging of their deals, the presentation of their opportunities, and the underlying strength of their business strategies and value propositions. This situation is complicated by differing scope and levels of advice between professional service providers, such as accountants, attorneys, and management consultants. Entrepreneurs waste valuable time trying to raise capital ineffectively, and as a consequence, their businesses suffer.
"Inside Secrets to Venture Capital takes the mystery out of the process. It is a valuable handbook and reference guide to entrepreneurs, professional service providers and investors. In a clear and logical format, the book addresses the issues to consider when raising venture capital, and then describes the process in detail. The book is rich in case studies from entrepreneurs, professional service providers and investors on their actual experiences. Most importantly, the book contains feedback from actual investors on what works for them and what doesn't.
"Inside Secrets to Venture Capital is a necessity for anybody in the field of raising capital."
***
"Fast reading and an excellent resource"
Jerry Chautin
Volunteer SCORE Business Counselor, www.SCORE.org
"I've recommended INSIDE SECRETS TO VENTURE CAPITAL to my clients as a way to gain immediate insight to what's really going on in the VC world. Novices have unrealistic expectations and rarely understand what the venture capitalist wants. INSIDE SECRETS tells it like it is.
"I found INSIDE SECRETS to be fast reading and an excellent resource for those beginning their search for VC. In my opinion it can substantially reduce the entrepreneur's learning curve and allow them to assess their chances of getting equity funding for their venture."
From Readers
"A riveting, resourceful book full of wit and wisdom"
Judy Vorfeld Peoria, AZ
"Inside Secrets to Venture Capital is similar in caliber to many college course books. It's written in a concise, contemporary manner that offers wit along with wisdom. The authors cheerfully nuke business-related myths while providing entrepreneurs with a wide range of splendid information.
"Hill and Power spent three years surveying investors and entrepreneurs. Well worth the time and
effort. This highly organized book, loaded with fascinating statistics, offers special mini-sections in three categories: advice from angels, venture capitalists, and entrepreneurs.
"Inside Secrets to Venture Capital doesn't pretend to have all the answers, but provides enough data, resources, and insight to ensure that all entrepreneurs find the right resolutions. While it may well become the consummate reference for entrepreneurs in search of funding, it should also be required reading for potential angels, venture capital investors, and anyone seriously seeking a business degree."
***
"Useful, practical information"
Aimee Fitzgerald Englewood, CO
"Over the past few years, it seems that every time we turned around, we heard of yet another small start-up company getting funded by single, double, or even triple digits. Now that the stream of capital has slowed, companies of all sizes are facing the reality that raising capital is a long, time-consuming, and often painstaking task.
"Hill and Power's book assimilates some of the literal wealth of information accumulated over the
past years for the benefit of businesspeople today. Instead of reading another article or book about
the *amount* of money companies have received, or about the lifestyles of VCs, entrepreneurs can get down-to-earth advice and suggestions on what works and what doesn't work. The authors have interviewed "real-life" entrepreneurs and found out where they succeeded and where they didn't.
"Entrepreneurs face a tough enough challenge in actually raising the money - getting some early
grounding from a book like this can help keep them grounded.
"Similarly, input directly from VCs takes much of the mystery out of the VC world. The input is
straight, direct, and lets entrepreneurs know just what is expected.
"Good reading for businesspeople thinking of raising capital or in the process at the moment."
***
From the press
"Entrepreneurs can learn from book on venture capitalists"
Joe Vanacore Staff Writer Sacramento Business Journal
"Oil and vinegar do not easily mix, nor do entrepreneurs and venture capitalists.
"Brian E. Hill and Dee Power explore how VCs and Es differ in their premises, expectations and frustrations in their book Inside Secrets to Venture Capital. Those differences are so deep that the 300-page book could easily have been titled 'Venture Capitalists are From Mars; Entrepreneurs are from Venus.'
"And a cash-strapped small-business man, whether Venusian or Earthling, would do well to digest this book before making his pitch to a VC.
"Hill and Power -- co-founders of Profit Dynamics Inc., a research and management consulting firm -- spent three years collecting data and opinions from VCs, and it shows. They cover plenty of ground.
"In painstakingly traversing all of that territory, though, the authors fall into a trap: A complex subject makes for complex challenges in graphics and organization. The result isn't pleasing to the eye.
"That drawback is forgivable, especially if you know in advance that sprinkled about the book are tales of gaffes of small-business folks scrambling for cash. These are pleasing to the funny bone.
"John Wiley & Sons Inc. seeks $34.95 for the hardcover book. But don't ask a venture capitalist to front you the money."
***
"I recommend you read it twice"
AzTechBiz, Josh Williams
"This book is the closest thing most of us will ever experience to being a fly on the wall in the war rooms of venture capital firms. There are literally hundreds of pearls of wisdom from venture
capitalists, angel investors and entrepreneurs, liberally sprinkled throughout the 290 pages.
"Hill and Power spent over three years collecting opinions and statistics. One of the most surprising findings was the chasm between investors' and entrepreneurs' viewpoints. The book even makes this play on pop psychology with, "Venture capitalists are from Mars, entrepreneurs are from Venus."
"A good example is the disparities in what VCs think is important regarding the funding decision when compared to what entrepreneurs think the VCs want. VCs rank Management first, by a nearly two to one average ratio, over the other elements of Growth, Return on Investment, Market and Product. Entrepreneurs, on the other hand, mistakenly believe that VCs place Return on Investment most highly, with the other elements more evenly considered.
"The book's 23 chapters read like an encyclopedia of venture capital. It starts off with the basics of who VCs are, where they come from, where the industry is going and if you and your business are right for venture capital. Then it moves into a detailed discussion of creating the right business plan, based on investor expectations. After that comes a step-by-step discussion of the dance of finding the right investor and closing the deal. There is also a chapter on angel investors in this section.
"Chapter 21, "Putting it all Together" is not to be missed. It summarizes the transaction with an investor in ten steps. Included is a real world case study, in which the founder, CEO and investor participate in a roundtable about the company's beginnings, funding and eventual acquisition for $400 million.
"If you are working at a company that is seeking funding, I recommend reading this book. If you are actively seeking funding yourself, I recommend you read it twice."
***
"Every chapter has blunt, verbatim advice "
Excerpt from After The Gold Rush, BusinessWeek Online, Theresa Forsman
"Brian E. Hill and Dee Power, authors of Inside Secrets To Venture Capital (John Wiley & Sons) spent three years collecting data and opinions from more than 250 VC firms. Those three years, 1998-2000. were the peak of the Internet boom, when venture dollars invested and the number of companies funded were rising 200% to 300% annually. Therefore, some of the viewpoints and figures reflect an era that many now agree was an anomaly.
"Hill and Power, however, have been in the business of advising small and midsize businesses where to find capital for 15 years. Likewise, most of the VC firms they deal with existed both before and after the Internet boom. So when pessimism and the economy have lifted and money again starts flowing into and out of VC firms, the entrepreneur looking to get his share is likely to find that much of the info Hill and Power present is bubble-proof.
"The book is well organized and easy to digest, yet sophisticated as well. The authors address questions the would-be entrepreneur might feel are just too simple to ask. For example: What is venture capital? Why do venture capitalists say no? Will a no ever become a yes? Do you really need a referral? If you just absolutely cannot find a referral, then what? What is intellectual property? What is quality management?
"Every chapter has blunt, verbatim advice and insight from a VC or, at times, an entrepreneur -- and their wisdom covers everything from negotiating to due diligence to sample disclaimers for a business plan."
Inside Secrets To Venture Capital
Now get your free copy at: http://www.angelvisioninvestors.com
Comments from the readers of "Inside Secrets To Venture Capital"
From Venture Capitalists
Gerry Langeler, Partner OVP Partners
"Pragmatic, real life advice from the people on the front lines of one of the world's most rapidly moving businesses. Required reading for anyone venturing forth into the arena!"
***
Lee Mercer, President, National Association of Small Business Investment Companies
"Easy to read and a concise but thorough explanation of venture capital and the paths and processes that lead to it. Entrepreneurs looking for anything other than a standard bank loan will be better prepared for their search if they understand the subjects dealt with in "Inside Secrets to Venture Capital."
***
From Professionals
"Must read for anyone who is serious about raising venture capital"
Michael A. Lechter Esq.
Squire, Sanders & Dempsey Legal Counsel Worldwide
"When the typical entrepreneur begins the process of seeking financing, his or her view of the world and the venture capitalist's view of the world are often "misaligned". In many instances the misperceptions of the entrepreneur lead to frustration and disappointment. Inside Secrets To Venture Capital can help an entrepreneur seeking financing avoid those misperceptions. Inside Secrets provides a fascinating exploration of the process of raising capital, and a contrast of the differing perspectives of all players --the professional venture capitalists, the high-wealth individual "Angels," and the capital-seeking entrepreneur. The no-nonsense, interview style of the book provides the story "right from the horses mouth", and provides the reader with a road map as to how to (and how not to) navigate the maze of fund raising. The advice provided on realistic valuation of the company and preparing a business plan can be invaluable.Inside Secrets To Venture Capital is a 'must read' for anyone who is serious about raising venture capital."
"Valuable handbook and reference guide"
Nigel A.L. Brooks, President
The Business Leadership Development Corporation, Strategic Management Consultants
"Raising capital is a mystifying process for most entrepreneurs. They get very little feedback from potential investors on the quality of their business plans, the packaging of their deals, the presentation of their opportunities, and the underlying strength of their business strategies and value propositions. This situation is complicated by differing scope and levels of advice between professional service providers, such as accountants, attorneys, and management consultants. Entrepreneurs waste valuable time trying to raise capital ineffectively, and as a consequence, their businesses suffer.
"Inside Secrets to Venture Capital takes the mystery out of the process. It is a valuable handbook and reference guide to entrepreneurs, professional service providers and investors. In a clear and logical format, the book addresses the issues to consider when raising venture capital, and then describes the process in detail. The book is rich in case studies from entrepreneurs, professional service providers and investors on their actual experiences. Most importantly, the book contains feedback from actual investors on what works for them and what doesn't.
"Inside Secrets to Venture Capital is a necessity for anybody in the field of raising capital."
***
"Fast reading and an excellent resource"
Jerry Chautin
Volunteer SCORE Business Counselor, www.SCORE.org
"I've recommended INSIDE SECRETS TO VENTURE CAPITAL to my clients as a way to gain immediate insight to what's really going on in the VC world. Novices have unrealistic expectations and rarely understand what the venture capitalist wants. INSIDE SECRETS tells it like it is.
"I found INSIDE SECRETS to be fast reading and an excellent resource for those beginning their search for VC. In my opinion it can substantially reduce the entrepreneur's learning curve and allow them to assess their chances of getting equity funding for their venture."
From Readers
"A riveting, resourceful book full of wit and wisdom"
Judy Vorfeld Peoria, AZ
"Inside Secrets to Venture Capital is similar in caliber to many college course books. It's written in a concise, contemporary manner that offers wit along with wisdom. The authors cheerfully nuke business-related myths while providing entrepreneurs with a wide range of splendid information.
"Hill and Power spent three years surveying investors and entrepreneurs. Well worth the time and
effort. This highly organized book, loaded with fascinating statistics, offers special mini-sections in three categories: advice from angels, venture capitalists, and entrepreneurs.
"Inside Secrets to Venture Capital doesn't pretend to have all the answers, but provides enough data, resources, and insight to ensure that all entrepreneurs find the right resolutions. While it may well become the consummate reference for entrepreneurs in search of funding, it should also be required reading for potential angels, venture capital investors, and anyone seriously seeking a business degree."
***
"Useful, practical information"
Aimee Fitzgerald Englewood, CO
"Over the past few years, it seems that every time we turned around, we heard of yet another small start-up company getting funded by single, double, or even triple digits. Now that the stream of capital has slowed, companies of all sizes are facing the reality that raising capital is a long, time-consuming, and often painstaking task.
"Hill and Power's book assimilates some of the literal wealth of information accumulated over the
past years for the benefit of businesspeople today. Instead of reading another article or book about
the *amount* of money companies have received, or about the lifestyles of VCs, entrepreneurs can get down-to-earth advice and suggestions on what works and what doesn't work. The authors have interviewed "real-life" entrepreneurs and found out where they succeeded and where they didn't.
"Entrepreneurs face a tough enough challenge in actually raising the money - getting some early
grounding from a book like this can help keep them grounded.
"Similarly, input directly from VCs takes much of the mystery out of the VC world. The input is
straight, direct, and lets entrepreneurs know just what is expected.
"Good reading for businesspeople thinking of raising capital or in the process at the moment."
***
From the press
"Entrepreneurs can learn from book on venture capitalists"
Joe Vanacore Staff Writer Sacramento Business Journal
"Oil and vinegar do not easily mix, nor do entrepreneurs and venture capitalists.
"Brian E. Hill and Dee Power explore how VCs and Es differ in their premises, expectations and frustrations in their book Inside Secrets to Venture Capital. Those differences are so deep that the 300-page book could easily have been titled 'Venture Capitalists are From Mars; Entrepreneurs are from Venus.'
"And a cash-strapped small-business man, whether Venusian or Earthling, would do well to digest this book before making his pitch to a VC.
"Hill and Power -- co-founders of Profit Dynamics Inc., a research and management consulting firm -- spent three years collecting data and opinions from VCs, and it shows. They cover plenty of ground.
"In painstakingly traversing all of that territory, though, the authors fall into a trap: A complex subject makes for complex challenges in graphics and organization. The result isn't pleasing to the eye.
"That drawback is forgivable, especially if you know in advance that sprinkled about the book are tales of gaffes of small-business folks scrambling for cash. These are pleasing to the funny bone.
"John Wiley & Sons Inc. seeks $34.95 for the hardcover book. But don't ask a venture capitalist to front you the money."
***
"I recommend you read it twice"
AzTechBiz, Josh Williams
"This book is the closest thing most of us will ever experience to being a fly on the wall in the war rooms of venture capital firms. There are literally hundreds of pearls of wisdom from venture
capitalists, angel investors and entrepreneurs, liberally sprinkled throughout the 290 pages.
"Hill and Power spent over three years collecting opinions and statistics. One of the most surprising findings was the chasm between investors' and entrepreneurs' viewpoints. The book even makes this play on pop psychology with, "Venture capitalists are from Mars, entrepreneurs are from Venus."
"A good example is the disparities in what VCs think is important regarding the funding decision when compared to what entrepreneurs think the VCs want. VCs rank Management first, by a nearly two to one average ratio, over the other elements of Growth, Return on Investment, Market and Product. Entrepreneurs, on the other hand, mistakenly believe that VCs place Return on Investment most highly, with the other elements more evenly considered.
"The book's 23 chapters read like an encyclopedia of venture capital. It starts off with the basics of who VCs are, where they come from, where the industry is going and if you and your business are right for venture capital. Then it moves into a detailed discussion of creating the right business plan, based on investor expectations. After that comes a step-by-step discussion of the dance of finding the right investor and closing the deal. There is also a chapter on angel investors in this section.
"Chapter 21, "Putting it all Together" is not to be missed. It summarizes the transaction with an investor in ten steps. Included is a real world case study, in which the founder, CEO and investor participate in a roundtable about the company's beginnings, funding and eventual acquisition for $400 million.
"If you are working at a company that is seeking funding, I recommend reading this book. If you are actively seeking funding yourself, I recommend you read it twice."
***
"Every chapter has blunt, verbatim advice "
Excerpt from After The Gold Rush, BusinessWeek Online, Theresa Forsman
"Brian E. Hill and Dee Power, authors of Inside Secrets To Venture Capital (John Wiley & Sons) spent three years collecting data and opinions from more than 250 VC firms. Those three years, 1998-2000. were the peak of the Internet boom, when venture dollars invested and the number of companies funded were rising 200% to 300% annually. Therefore, some of the viewpoints and figures reflect an era that many now agree was an anomaly.
"Hill and Power, however, have been in the business of advising small and midsize businesses where to find capital for 15 years. Likewise, most of the VC firms they deal with existed both before and after the Internet boom. So when pessimism and the economy have lifted and money again starts flowing into and out of VC firms, the entrepreneur looking to get his share is likely to find that much of the info Hill and Power present is bubble-proof.
"The book is well organized and easy to digest, yet sophisticated as well. The authors address questions the would-be entrepreneur might feel are just too simple to ask. For example: What is venture capital? Why do venture capitalists say no? Will a no ever become a yes? Do you really need a referral? If you just absolutely cannot find a referral, then what? What is intellectual property? What is quality management?
"Every chapter has blunt, verbatim advice and insight from a VC or, at times, an entrepreneur -- and their wisdom covers everything from negotiating to due diligence to sample disclaimers for a business plan."
About the Authors
Brian E. Hill has a Master's Degree in Business Administration, with a specialization in finance. He has worked for a large financial institution, a diversified natural resource firm and a hospitality company. Major responsibilities included economic forecasting and the establishment of planning and analysis functions. His hobbies are golf and writing, and of course football. Find out more about Brian E. Hill
Dee Power also has an M.B.A degree. She has worked as a financial executive for the Governor's Office of Arizona, a retail firm and a major hospitality organization. Her responsibilities included strategic planning, cash flow management and marketing strategies. Her hobbies are gardening. Found out more about Dee Power
Hill and Power have written over 100 business plans and reviewed hundreds more. They have advised thousands of entrepreneurs in their search for capital and preparation of their business plans.
Profit Dynamics Inc., The Company
Profit Dynamics Inc. is a research and management consulting firm established in 1987 by Brian E. Hill and Dee Power. The company is located in Fountain Hills, AZ. Profit Dynamics is a research and advisory firm. The company's web site www.capital-connection.com has a wealth of information and links to resources on business plans, venture capital, private investors, loans and more.
Clients have included: B2B Internet Companies, B2C Internet Companies, Software Companies, Distance learning, DSL, Internet Telephony, TV and Radio Broadcasting, Financial Services, Hospitality, Insurance, Medical Products, Food Processing, Consumer Products, Sports Equipment Manufacturing, Electronics Manufacturing, Entertainment Centers.
Areas of Expertise
Venture Capital
Private Investors
Angel Networks
Entrepreneurs
Business Planning
Finding Capital.
Guest Speakers
Both Brian Hill and Dee Power have been invited as guest speakers to present on business planning, finding investors, venture capital, and other topics. They've presented at the Small Business Development Centers, Thunderbird International Graduate School of Management, Arizona Small Business Association, College of Advancing Computer Sciences, as well as business groups.
They have been guests on AOL's Business Forum, Delphi Live Chats and Compuserve Forums, as well as KFNN Business News Radio in Phoenix, AZ.
Research
Venture Capital Surveys
Conducted on an annual basis beginning in 1998, the Profit Dynamics Venture Capital Surveys surveys over 250 venture capitalists and asks such questions as how many business plans do they receive in a year, what is the most critical factor in their investment decision, how do they find the deals, what is the most common reason they decline to invest, and what is the most critical mistake entrepreneurs make in their business plan.
Entrepreneurs and their business plans
Why do most entrepreneurs complete a business plan, do they use business plan software and did they find it helpful, what's the most difficult challenge of completing a business plan, http://www.angelvisioninvestors.com
Private Investors/Accredited Investors/Angels
Research concerning private investors, sometimes known as angels.
Publications
Power and Hill have published articles or have been interviewed as experts on business topics in Business Journals across the country, LA Times, Orange County Register, San Jose Mercury, American Venture Magazine, Entrepreneur's Business Startups Magazine, BusinessWeek Online, Smart Money, Entrepreneur, Investor's Daily and many regional publications.
Power and Hill have also written several books:
Inside Secrets To Venture Capital Now you can find the answers you've been waiting for. Published by John Wiley & Sons, 2001. Inside Secrets To Venture Capital The inside story on finding the venture capital your business needs to grow. When it comes to finding capital—and the right investors for your business—entrepreneurs need all the help they can get. Brian Hill and Dee Power spent three years surveying 250 venture capital firms to find out what venture capitalists look for when putting their money in young businesses. Their results will give you all the tools you need to make smart decisions and avoid pitfalls and unnecessary risks. Read More Or send a blank e-mail to insidesecretscapital-connection.com $34.95. Available in bookstores and online booksellers.
Attracting Capital From Angels By Brian E. Hill and Dee Power, published by John Wiley & Sons, 2002. Attracting Capital From Angels: How Their Money and Their Experience Can Help You Build a Successful Company 2002, published by John Wiley & Sons, offers all the information entrepreneurs need for finding elusive angel investors. Comprehensive, eminently readable, and based on the authors' years of experience dealing with venture capital firms, angels, and entrepreneurs, this book covers all the angles on angels. Read More Or Just send a blank e-mail to attractingcapitalcapital-connection.com $34.95. Available in bookstores and online booksellers.
Business Plan Basics By Brian E. Hill and Dee Power Published by Javelina House Publishing 2003. The Authors of Business Plan Basics For Entrepreneurs Brian Hill and Dee Power, have prepared and reviewed hundreds of business plans. They know what works and what doesn't. They know what investors have to see in a business plan. They’ve written Business Plan Basics for Entrepreneurs . It’s an E-Book of nearly 100 pages crammed with what you need to know to write a comprehensive business plan that can help your company get the money it needs. You can use their format, their advice and their years of business plan experience to help you write an effective business plan. All this for only $14.95. You Download your copy now http://www.angelvisioninvestors.com
50 Ways To Find Money For Your Business By Brian E. Hill and Dee Power, published by Javelina House Publishing 2003. 50 Ways To Find Money For Your Business Need capital for your company? There’s more than venture capital, bank loans, angel investors. You can find 50 different sources of money to help your company grow and expand. Read More Or Just send a blank e-mail to 50wayscapital-connection.com Published by Javelina House Publishing 2003 $9.95.
Overtime The Novel
Overtime The Novel, written by Brian and Dee will soon find its way into bookstores, and other online booksellers. You can preview the novel at its http://www.angelvisioninvestors.com
Subscribe to our free newsletter
THE CAPITAL CONNECTION tm NEWSLETTER
A Newsletter For Entrepreneurs IN Business
Focused On Finance
Packed with original articles,
hard hitting advice and answers to tough business questions
from experts in the business community
To SUBSCRIBE to Capital Connections send an e-mail to cc-newsletter-requestlists.capital-connection.com with "subscribe", no quotes of course, in the subject or body of the e-mail.
Booklets
"50 Tips For A Better Business Plan", indispensable tips and ideas to save you time and help you write a plan that wins. Business Plan writing just got easier. 50 Tips For A Better Business Plan is packed with practical and useful information based on the author's nearly 20 years of experience. See more and how to order $6.95
Ask Ms Money: Advice for the Fiscally Forlorn A humorous look at some of the serious questions of running a business. Ask Ms Money : Have a question about where to find funding? Dealing with the idiosyncrasies of investors? What to do with an egotistical entrepreneur? How to deal with balky bankers or cranky consultants? Well now you have someone who can tell you where to go. And how to get there in style. Ask Ms. Money your most troublesome question, your more most perplexing problem, your most diabolic dilemma. Answers are her middle name, advice is her favorite game.
money
Subscribe to The Capital Connection Newsletter. For Entrepreneurs in Business. Focused on Finance. Every week receive advice on business planning, venture capital, private investors, loans and alternative financing. All this and it’s free.
Find angel and VC investors: http://www.angelvisioninvestors.com
Brian E. Hill has a Master's Degree in Business Administration, with a specialization in finance. He has worked for a large financial institution, a diversified natural resource firm and a hospitality company. Major responsibilities included economic forecasting and the establishment of planning and analysis functions. His hobbies are golf and writing, and of course football. Find out more about Brian E. Hill
Dee Power also has an M.B.A degree. She has worked as a financial executive for the Governor's Office of Arizona, a retail firm and a major hospitality organization. Her responsibilities included strategic planning, cash flow management and marketing strategies. Her hobbies are gardening. Found out more about Dee Power
Hill and Power have written over 100 business plans and reviewed hundreds more. They have advised thousands of entrepreneurs in their search for capital and preparation of their business plans.
Profit Dynamics Inc., The Company
Profit Dynamics Inc. is a research and management consulting firm established in 1987 by Brian E. Hill and Dee Power. The company is located in Fountain Hills, AZ. Profit Dynamics is a research and advisory firm. The company's web site www.capital-connection.com has a wealth of information and links to resources on business plans, venture capital, private investors, loans and more.
Clients have included: B2B Internet Companies, B2C Internet Companies, Software Companies, Distance learning, DSL, Internet Telephony, TV and Radio Broadcasting, Financial Services, Hospitality, Insurance, Medical Products, Food Processing, Consumer Products, Sports Equipment Manufacturing, Electronics Manufacturing, Entertainment Centers.
Areas of Expertise
Venture Capital
Private Investors
Angel Networks
Entrepreneurs
Business Planning
Finding Capital.
Guest Speakers
Both Brian Hill and Dee Power have been invited as guest speakers to present on business planning, finding investors, venture capital, and other topics. They've presented at the Small Business Development Centers, Thunderbird International Graduate School of Management, Arizona Small Business Association, College of Advancing Computer Sciences, as well as business groups.
They have been guests on AOL's Business Forum, Delphi Live Chats and Compuserve Forums, as well as KFNN Business News Radio in Phoenix, AZ.
Research
Venture Capital Surveys
Conducted on an annual basis beginning in 1998, the Profit Dynamics Venture Capital Surveys surveys over 250 venture capitalists and asks such questions as how many business plans do they receive in a year, what is the most critical factor in their investment decision, how do they find the deals, what is the most common reason they decline to invest, and what is the most critical mistake entrepreneurs make in their business plan.
Entrepreneurs and their business plans
Why do most entrepreneurs complete a business plan, do they use business plan software and did they find it helpful, what's the most difficult challenge of completing a business plan, http://www.angelvisioninvestors.com
Private Investors/Accredited Investors/Angels
Research concerning private investors, sometimes known as angels.
Publications
Power and Hill have published articles or have been interviewed as experts on business topics in Business Journals across the country, LA Times, Orange County Register, San Jose Mercury, American Venture Magazine, Entrepreneur's Business Startups Magazine, BusinessWeek Online, Smart Money, Entrepreneur, Investor's Daily and many regional publications.
Power and Hill have also written several books:
Inside Secrets To Venture Capital Now you can find the answers you've been waiting for. Published by John Wiley & Sons, 2001. Inside Secrets To Venture Capital The inside story on finding the venture capital your business needs to grow. When it comes to finding capital—and the right investors for your business—entrepreneurs need all the help they can get. Brian Hill and Dee Power spent three years surveying 250 venture capital firms to find out what venture capitalists look for when putting their money in young businesses. Their results will give you all the tools you need to make smart decisions and avoid pitfalls and unnecessary risks. Read More Or send a blank e-mail to insidesecretscapital-connection.com $34.95. Available in bookstores and online booksellers.
Attracting Capital From Angels By Brian E. Hill and Dee Power, published by John Wiley & Sons, 2002. Attracting Capital From Angels: How Their Money and Their Experience Can Help You Build a Successful Company 2002, published by John Wiley & Sons, offers all the information entrepreneurs need for finding elusive angel investors. Comprehensive, eminently readable, and based on the authors' years of experience dealing with venture capital firms, angels, and entrepreneurs, this book covers all the angles on angels. Read More Or Just send a blank e-mail to attractingcapitalcapital-connection.com $34.95. Available in bookstores and online booksellers.
Business Plan Basics By Brian E. Hill and Dee Power Published by Javelina House Publishing 2003. The Authors of Business Plan Basics For Entrepreneurs Brian Hill and Dee Power, have prepared and reviewed hundreds of business plans. They know what works and what doesn't. They know what investors have to see in a business plan. They’ve written Business Plan Basics for Entrepreneurs . It’s an E-Book of nearly 100 pages crammed with what you need to know to write a comprehensive business plan that can help your company get the money it needs. You can use their format, their advice and their years of business plan experience to help you write an effective business plan. All this for only $14.95. You Download your copy now http://www.angelvisioninvestors.com
50 Ways To Find Money For Your Business By Brian E. Hill and Dee Power, published by Javelina House Publishing 2003. 50 Ways To Find Money For Your Business Need capital for your company? There’s more than venture capital, bank loans, angel investors. You can find 50 different sources of money to help your company grow and expand. Read More Or Just send a blank e-mail to 50wayscapital-connection.com Published by Javelina House Publishing 2003 $9.95.
Overtime The Novel
Overtime The Novel, written by Brian and Dee will soon find its way into bookstores, and other online booksellers. You can preview the novel at its http://www.angelvisioninvestors.com
Subscribe to our free newsletter
THE CAPITAL CONNECTION tm NEWSLETTER
A Newsletter For Entrepreneurs IN Business
Focused On Finance
Packed with original articles,
hard hitting advice and answers to tough business questions
from experts in the business community
To SUBSCRIBE to Capital Connections send an e-mail to cc-newsletter-requestlists.capital-connection.com with "subscribe", no quotes of course, in the subject or body of the e-mail.
Booklets
"50 Tips For A Better Business Plan", indispensable tips and ideas to save you time and help you write a plan that wins. Business Plan writing just got easier. 50 Tips For A Better Business Plan is packed with practical and useful information based on the author's nearly 20 years of experience. See more and how to order $6.95
Ask Ms Money: Advice for the Fiscally Forlorn A humorous look at some of the serious questions of running a business. Ask Ms Money : Have a question about where to find funding? Dealing with the idiosyncrasies of investors? What to do with an egotistical entrepreneur? How to deal with balky bankers or cranky consultants? Well now you have someone who can tell you where to go. And how to get there in style. Ask Ms. Money your most troublesome question, your more most perplexing problem, your most diabolic dilemma. Answers are her middle name, advice is her favorite game.
money
Subscribe to The Capital Connection Newsletter. For Entrepreneurs in Business. Focused on Finance. Every week receive advice on business planning, venture capital, private investors, loans and alternative financing. All this and it’s free.
Find angel and VC investors: http://www.angelvisioninvestors.com