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6 Reasons You’ll Want To Attend This Year’s USD Legacy Entrepreneurship Conference

6 Reasons You’ll Want To Attend This Year’s USD Legacy Entrepreneurship Conference

On Thursday Oct 6 2016 The University of San Diego School of Business Administration and the Center for Peace and Commerce proudly present the annual USD Legacy Entrepreneurship Conference.

Here are some of TSG’s reasons why you’ll want to attend this annual event.

1. There is no cost to attend. It’s a very valuable and completely FREE event open to the community. You won’t find one like it! Space is limited and you’ll want to reserve your seat sooner than later. Sign up early to reserve your seat. Soak in as much insight as you can. Take advantage of this major local resource into the world of entrepreneurship, interaction and collaboration. In three hours you’ll hear from a diverse panel of thought leaders in the community.

2.The Financial Times recently ranked USD’s School of Business Administration’s MBA Program Number Three in the World for Entrepreneurship.
The esteemed ranking is based on criteria included the percentage of graduates who created their own company, the percentage of companies still operating at the end of 2014, whether it was their main source of income and how the school and the alumni network helped set things up.

3. The purpose of this USD event is to empower change makers through entrepreneurship.
The event is purposefully created to evolve and sustain a community of aspiring as well as seasoned entrepreneurs/business owners. Ultimately, bringing together students, alumni, investors and entrepreneurs for an interactive evening of coaching and collaboration. This event coincides with a larger perspective of what it means to be an entrepreneur and a strengthened sense of community.

4. Any entrepreneur, whether aspiring or seasoned, can benefit from attending the conference.
The USD Legacy Entrepreneurship Conference is one of the biggest events at USD for entrepreneurs. It is an incredible opportunity for anyone who has been inspired to be an entrepreneur to get the “real” behind the scenes stories from some of San Diego’s top entrepreneurs.

Participants will have the opportunity to engage with those who have done it before and can share their own startup stories stories. Topics like, “What I would tell my 21 year old self” can save anyone wasted time, energy and money of trying to figure it out on their own. Making mistakes as an entrepreneur can be very expensive, and an event like ULEC allows people the opportunity to ask questions, get feedback, and gather lessons learned from top successful entrepreneurs.

“It is also a great opportunity to meet our current innovative students and the thriving USD startup community. Social entrepreneurs who are changing the world and want to share their stories will also be on the panels adding a “changemaker” perspective” says Regina Bernal, Entrepreneurship and Experiential Learning.

5. Have your entrepreneurial questions answered from game changing panelists! You’ll collaborate with panelists like Stephan Aarstol, Author of ‘The Five-Hour Workday’ in a fireside chat setting. You’ll want to be sure to invite your boss for this part! Have those entrepreneurial questions ready. Those questions that browsing through countless articles on the internet just don’t answer.

Confirmed Fireside Chat and Panelists

Fireside Chat— Stephan Aarstol, Founder CEO Tower Paddle Boards, Author ‘The Five-Hour Workday’

Concurrent Panels “If I started my Business Today” “What I would tell my 21 year-old-self”

Warren Lorenz, TechMeetsTrader

Andy Altman, GigTown

Jessica Kort, Lacy

Gina Champion-Caine, American National Investment

Stephanie McQuade, Lacy

Cara Cerutti Holmes, Smarter Garter

Jeffery Adler, Serial Entrepreneur

Neil Resiman, Tavistock Group

Sioma Waisburd, Whole e Nature

Cody Cross, GreekLink

Ana Bermudez, TAGit

6. The networking. The conference offers the time and space to expand your network in the community. Let’s be honest, networking events alone can be costly to your startup budget and events like these offer the space to expand your network and exude your own value to the community. Don’t be shy! You’ll get the most out of it by getting involved in the conversation, asking questions, and leaving with a few valuable connections that you can continue to grow with on your journey as an entrepreneur in San Diego. Don’t miss out on this incredible FREE opportunity from USD and San Diego’s entrepreneurial community. Stay connected and get involved. Sign up today!

Rise Up Radio Interview with Tyler Jensen Founder of The Startup Garage

Rise Up Radio San Diego with Tyler Jensen

Rise Up Radio Interview with Tyler Jensen Founder of The Startup Garage

You are listening to James Carmody and Jared Kelley here, in studio for SDriseup.com

We are looking to hear stories in your life about local leaders in San Diego.

Whether it is the small business owner, your Pastor or leader of your church, your kid’s school teacher or maybe it’s their Little League coach.

James:

With us in the studio now we have Tyler Jensen, who is the owner of Startup Garage. I am super-excited to hear about Tyler’s background, his journey in life and how he is making a difference in the community.

Tyler:

James, I like start ups and I love my garage. I am just so excited to dig into combining those things two things…

James:

Or maybe use it as a guide to combine.

Jared:

I think the play on it is that we are taking start ups out of the garage but that’s where they start. I know I am tinkering on toys in there and stuff, there are 360 video cameras in my garage and having fun…

Jared:

That is why I love start ups too, I have to say that. I am fascinated with that game.

James:

Yes, taking a risk and getting things off the ground.

Jared:

Tyler, welcome to the show; welcome to the fun we are going to have here. Tell us a little bit about your journey and what you are doing with Startup Garage.

Tyler:

Yes, thank you so much for having me. I’m excited to be here and to share all the good that you are doing in the community. So, I launched Startup Garage about 5 years ago, as a result of having some struggles earlier on in my previous company. I really made a lot of mistakes earlier on in my first company.

Jared/James:

Yep, we all do that

Tyler:

And I realized that I made a lot of silly mistakes that I could have avoided and so that inspired me to help other people who are starting companies. People who have great ideas and passion and motivation, with ideas that can help improve the community, their families and themselves. So, that really gets me up out of bed every morning.

Jared:

Not only does it get you up out of bed. You have helped over 200 companies, non-profits and social enterprises. That is not light work.

Tyler:

It doesn’t feel like work, honestly. So, I think that’s the key. I wake up on Saturdays and sometimes I don’t have anything committed and sometimes I just start working again because I love it and it’s really fun, and people are coming up with some amazing ideas. People are really amazing when they are given the time and creativity to put something into action.

James:

Give us the background on Startup Garage. I know you started it back in 2010, so you are about 6 years in, what does it look like when someone comes to you, as you engage someone? What are you helping them with?

Tyler:

Typically, we have two different types of entrepreneurs who will come to us: one who we call the Lifestyle Entrepreneur and one we call the High Growth Entrepreneur.
The real difference is the high growth entrepreneur is looking to start something technology and really looking to scale really fast, maybe $100M in revenue within 5 years. They are going to need a lot of capital.

The Lifestyle Entrepreneur is really your traditional small business owner, maybe they are a sole proprietor, maybe they want to start a coffee shop or something like that and they just need help. So, on the high growth side we help them through the fund raising process and we do that through helping them build business plans, financial modeling, investor decks and we coach them on the fund raising process because as an entrepreneur we think certain things are important and investors almost think the exact opposite.

On the lifestyle side, it is really about education. On the small business side a lot of people have these great ideas and just really don’t know what the next steps are. They are really not that difficult but without access to someone who has gone through it before, it’s even more challenging and they make a lot of mistakes and sometimes even get stuck. So, we have an accelerator program on the lifestyle side that we just launched and I’m pretty excited about as well.

Jared:

Wow!

James:

Really cool!

Jared:

I think that it would be beneficial to sit down and have a conversation. Not on the radio, I probably need to break out my financials and see…because I personally fall more on the lifestyle side, that I just love being involved with people and I know a couple of venture capitalists, so I think that’s probably the point that most of them look at…everyone thinks it’s all about profit and that’s important, it is important to have revenue but I think that most partners are also looking on like “who is this guy, what is his story and what’s happening?”

I think again, that is more my passion, the lifestyle side, as it’s about just empowering and encouraging people to say: who are you, what are you doing and you have some passion around there right? Passion drives efficiencies and it drives innovation, and when you are sitting there doing the grind (and that’s important to have some grind and hustle) but if you are just doing a 9 – 5 to get a pay check, then look at that and see if that is really what you want to do.

If you have that entrepreneurial spirit it is just inspiring to sit down with people like Tyler who will tell you “I’ve been through the struggle and you could probably do a pretty sick billion of a widget company yourself.”

He said: “I’ve got these talents how do I help other people and how do I multiply this?” I commend you for doing that and I know that that space is not an easy one. So, it’s fun and you like to work on your Saturdays but you probably get some notes once in a while in the finance space and growing through that.

James:

Sure. Speaking of passions folks, one of the things that you may be very familiar with if you are listening here is that Tyler Jensen is also the founder of VAVi Sports. I know firsthand I’ve played in multiple VAVi leagues in my 13 years as a San Diegan.
I’m sure Jared has, I know my wife has and my friends and clients have. Tell us how VAVi got started? It’s such a thriving, amazing organization now. Where did you get it started and how did you guys come to San Diego and where we are at today?

Tyler:

I’m originally from Virginia

James:

An East coaster like myself. I’m from Massachusetts.

Tyler:

Okay, nice. I went to University of Virginia and moved back right after I graduated in 2008, with big dreams (most 21 year olds are full of ego and full of confidence). I came out with that and ran out of money in about 3 weeks after I got here – the 21st day.

James:

Where did you go, to the beach and the bar?

Tyler:

I was looking for a job. So, I came out here and I got offered a job to run a political campaign. I ended up running a U.S. congressional political campaign for about a year. One of the women and I on that campaign started talking about wanting to start a business. I had just moved here and I saw the need to start building a community beyond just the bar scene.

At 21 I was living in Pacific Beach and you just went to bars and that is how you met new people but I wanted something different than that. We came up with the idea to have that community built around sports. I certainly wasn’t very good at sports, I’m okay…I’m average at best and so was my friend. So, it wasn’t about the super competitive sports, although VAVi does have some competitive leagues now. We just got started right after the campaign. We printed 5000 flyers.

James:

What year was this?

Tyler:

2002 – right after the campaign we printed 5000 flyers, set up a one-page website and we bought vavi.com. The day we launched and got the flyers in the mail, VAVi.com expired and we didn’t know that. A Chinese company bought it and so we had to launch govavi.com. We went around the beach and handed out flyers to get it started. We started with one volleyball league and now it’s got about 35,000 members here in San Diego. I sold it back in January 2008. So, it’s been quite a journey.

Jared:

I’ve also played in those leagues and I’m just like you, I’m not the super-competitive, achiever mentality person but I know my role, I’m not the greatest out there on the field but it was a great place to go play those sports and have fun. I think that’s why entrepreneurs are needed and leaders are needed, just to see those gaps and fill them.

So, if you are sitting at your desk or in your car having that thought in your head: “man, there is something here that can I can help do,” that’s what your role is, if that’s your passion find a way to do it. I’m not going to get `Gary Vaynerchuk’ on us right now but if it’s good – do it…make it happen.

James:

Tyler, it’s such a pleasure having you on air, someone who this entrepreneurial mindset and you have made such a difference here in the community. How many people play in VAVi sports nowadays?

Tyler:

I’m not sure exactly what it is anymore because I sold it a number of years ago. I’m trying to think…

James:

Ten…twenty people maybe?

Tyler:

Probably. There were probably 3,000 people in a given week playing in some sort of event when I sold it.

James:

Right, that’s amazing. That’s the adventure, right? And at Startup Garage, you are impacting local entrepreneurs in a major way and they are impacting their communities.

Tyler:

Yes, and that’s really what motivates me, to contribute entrepreneurs of impact to the community. So I am impacting the entrepreneurs. I’m not, like you who said you like to network and get out there and do all that. I’m a kind of introverted guy, so I figured out how do I make the biggest impact if I don’t have to go out and be in big crowds all the time? I got enough of that through my VAVi days. I moved up to Encinitas and hide out up there.

James:

Oh, that’s fantastic. Tyler Jensen making a big impact, empowering others through entrepreneurship to give back to their communities.

Jared:

Tyler, let’s go into Startup Garage just a little bit more, and maybe you can say some of the companies or maybe not. What does it look like for a couple of companies that are coming in and talking to you, and what are you doing with them?

Tyler:

I will give two examples: one for the high growth type company and one for the lifestyle type company because it’s a little bit different of a process. On the high growth side I will be kind of vague about all the details because of confidentiality.

I’m working with a company that came to me about a year and a half ago wanting to get into the solar space and had a concept and really needed cash, lots of cash to be able to execute on that idea he had. We helped cultivate that idea and put it into a business plan and through a really complicated financial model (as it turned out to be pretty complex for this particular one) and crafted the investor deck so that investors would respond to the story as well.

When an entrepreneur goes in they just want to talk about their product or service because they are so product/service-centric and they think that’s the best idea ever as they are putting their lives into it. It may be a great idea but investors want to know more.

So, we crafted all that together and put that investor package together. He went out to investors and has successfully raised several rounds of capital now. After the first round I continued to help as a part-time CFO on the team. I think he is nearing about $2 million raised, and really seeing a lot of traction and solar going in a lot of homes.

Jared:

Wow! You are like the Shark Tank Prep Crew.

James:

Folks, if you are at home, we’ve got the red beard and red haired Mr. Wonderful

Tyler:

You are hired as my branding consultant.

James:

I could run with that.

Jared:

And then for the lifestyle side what does that look like?

Tyler:

The lifestyle side was really motivated because to work one-on-one with myself and the team it costs a good chunk of change, and on the lifestyle side we found all these people, a lot of whom are my friends, coming to me and saying: “I really need your help…I want to get this off the ground.” I just didn’t have the band width to help them for free, and the finances just didn’t make sense.

So, I finally came up with the idea to do a group setting where we created this accelerator where we can take this whole group of people and teach them a lot of the same things but in a way that is going to be more beneficial to them.

They are not going to need to raise money from angel investors or venture capital but they are really going to need to get their service and their target market dialed in and all those pieces figured out, and learn the basics of business because a lot of them in this group do not know the foundation of business which can really catapult them to the next level.

So, they come and they sign up for a class. We are just finishing our first ever Lifestyle Business Accelerator class; we are in week 9 of 12, so we have 3 weeks left: Marketing, Sales and Small Business Funding. Then we are going to another class which (I think) starts on May 17.

It is a 12-week program and whenever there are 12 weeks we do 12 classes where you are going to learn and be interacting with others about the basics of business and getting your business plan done. There is also going to be 7 co-working nights, so you get together with your little pod within this group and work together.

So, there is learning and support, you are developing this little community of entrepreneurs that you can lean on. There is going to be 5 other nights of guest speakers where you are going to get to go and see other entrepreneurs talk about a number of different topics that are applicable to someone getting a new business up off the ground.

So it’s a 12-week program. We’ve made it really affordable, it’s only $1,500 for that whole program and so you end up with a business plan that you have created yourself, plus your business idea has changed from the idea into a real business that you can communicate to others and sell and make money.

Jared:

I think I’m an entrepreneur because my heart is just beating like it’s on fire right now…

James:

It’s so exciting!

Jared:

…and I can speak for myself; but if you are sitting in the same seat of: “what do I do next? I’m kind of lost in this thing…I have a great idea…” This is a solution that will provide high-tech coaching, have consultants come in and $1,500 is like a drop in the bucket – that is very affordable.

James:

Absolutely. And maybe you are sitting at home listening to us right now and you are working for a corporation and you are not stoked about it…you are not excited about it and you’ve had this passion project rolling around in your head, and you are like “how the heck do I even do this?” For $1,500 you could really play around with that idea, get some good training from Tyler and his crew and see if that has legs.

Tyler:

All the events are planned for in the evening as well, so if you have a full time job it’s after work. We definitely did it with that in mind, like “hey, if you want to get out of a job…” We just advise people “hey, don’t quit your job.” [Laughter] It’s going to take some time – not yet.

Jared:

So, please reach out. You can visit us on www.sdriseup.com, we have all of Tyler’s information there and how to get a hold of him and the company.
You have events all the time.

Let’s go into another event which I think is really really amazing and putting out that flag on the ground of rising up and being different, being part of your community. You are going to be talking about building a business to create impact, so the title of the business is very simply: Build a Business to Create Impact and that’s on April 12.

Again, we have information on that on our website, but Tyler, tell us more about what that event is.

Tyler:

That event is going to be a sampling of this lifestyle business accelerator. We are going to have a number of the different contributors coming in to do 5 minute instead of doing a whole class so you can get a flavor of who is going to be a part of this accelerator program and see if it’s a fit for you.

To be really fun, we are going to get that running up and moving and then we are going to dive into some business where we are going to be introducing the Business Canvas Model, which is a one-page business plan. You will do some actual learning which will move your business idea forward even if you decide not to take that class.
It’s from 6:00 – 8:30 in the Del Mar area.

Jared:

That one-page business plan that I looked at on your website, www.startupgarage.com, it is very clean but a very powerful tool. There’s a lot of information on that one-pager. So, if you’ve enjoyed this, please understand that you’re an entrepreneur and you’re a leader.

If you haven’t enjoyed it and you are just saying “hey, I know a lot of people like this,” be a leader in your space. If you are walking your dog wave to your neighbor, that’s leadership. Be a part of the community that you are in. That’s what this show is about.

James:

Folks, thank you so much for tuning in. Let’s continue to empower others, empower our neighbors, family, friends and co-workers. Tyler Jensen, with Startup Garage, it’s been a pleasure having you on.

If you have a question about your raising capital for your Startup or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

5 Excellent Startup Tips on Securing a Bank Loan

Bank Loan Tips From The Startup Garage

5 Excellent Startup Tips on Securing a Bank Loan

It’s no secret that securing bank funding for your startup is difficult these days – but it’s not impossible.

Give yourself better odds with these 5 simple
Startup tips:

Write a clear and convincing business plan.

Business owners must build a strategy from the very beginning around being “lendable,” so a business plan helps lay that proper foundation. Focus especially on the financial estimates and offer well-researched documentation for those estimates.

In addition, be sure to illustrate in your plan how you will generate revenue, how
much you’ll generate and how long it will take to get to positive cash flows. (Side tip: you may
want to have a CPA look over your financials beforehand).

Boost your credit rating.

A solid credit score lends legitimacy to your request and shows you’re less of a financial risk to the bank. They’ll want to see that you have a history of paying bills on time, as well as your history of minimizing outstanding debt. Have a less than desirable credit score?

Seek out smaller, more local banks, since large banks typically are pickier as to the kinds of businesses they want to work with. Smaller ones may be more forgiving of new businesses and may have less stringent credit requirements for opening accounts and lines of credit.

Launch your business in a solid industry.

Certain industries, such as food service and apparel,are considered extremely risky by potential lenders. Thus, if you are determined to get bank funding, consider an industry that doesn’t depend on fluctuating resources (such as oil prices) and has a relatively large profit margin.

Once selecting that industry, be sure to demonstrate your experience in it: offer real, measurable examples of your expertise in your chosen industry or of your experience of running successful businesses. Banks back those with a track record of success, so you’ll have to convince them you have the skill set, drive and experience to make their lending decision a successful one.

Owner’s equity.

If you expect lenders to put their “skin in the game,” they’re going to expect
you to do the same. As a general rule, you should personally invest 20% of the total projected
loan request. Your willingness to risk a sizeable portion of your own capital (and not just capital from their bank loans) shows your commitment to the venture.

Relationships are key.

Ultimately, securing a bank loan is about building a relationship with your bank, and if done correctly, your banker can become your biggest ally. If the banker knows you, your business operations and that you have good employees and a stable customer base, they
will be more likely to go out on a limb for you.

Having a good relationship with your bank can
make running your business a lot easier, so don’t underestimate it!

If you have a question about your raising capital for your Startup or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

How to Craft an Effective Mission Statement For Your Startup

How to Craft an Effective Mission Statement For Your Startup

When developing a business, an important component of your overall strategic plan is a mission statement.

This brief statement declares the purpose of an organization and defines the reason for the
company’s existence. It provides the framework to help guide the company’s strategies and actions by spelling out the business’s overall goal.

Ultimately, a mission statement helps guide decision-making internally, while also articulating what your business is all about to customers, suppliers and the community.

An effective mission statement is clear and concise, yet resonates with both employees and those
outside of the organization. It captures, in a few succinct sentences, the essence of your business’s purpose in a way that inspires support and ongoing commitment.

So, how should you go about crafting one for your business? Here are some helpful tips:

Involve others

The best way to develop a mission statement is to brainstorm with those connected to your business. Ask employees, customers and investors what they see as your biggest strengths and weaknesses. It’s important to see how others see your company and your brand so that you have more than one perspective. Not only will you get a more comprehensive statement that’s reflective of your company culture, but your employees will be more invested in it because they helped form it.

It takes time

Crafting a mission statement of value requires time, thought and planning. Typically, it’s recommended to set aside several hours – a full day, if you have it – to piece together everyone’s ideas and arrive at a finished product. Though time-consuming, this process will solidify the reason for what you are doing and help clarify the motivations behind your business.

Make it count

Even though mission statements are short, every word counts. Your statement should not only be memorable, but it should inspire action, as well. However, there’s no need to make it overly complicated – just state the purpose of your company and your reason for starting it in the first place. Its value only comes from when stakeholders can use it as a guide when making day-to-day decisions.

Spread the word

Once your mission statement is complete, display it internally and externally with pride. Post the statement in the office, print it on company materials and be able to recite it to potential customers who walk through the door. This way, you can ensure everyone who reads it understands the direction of the company and why you’ve chosen that focus.

If you have a question about your mission statement for your Startup or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

How to Create a Social Media Profile For Your Business

How to Create a Social Media Profile For Your Business

As a startup or small business owner, you have to be smart with the resources you have.

Oftentimes, traditional marketing doesn’t exactly fall within your budget. That’s why social media is a great alternative in generating the results you want to achieve.

It’s not only low-cost, but it also gives you direct exposure to current and prospective customers

So, you’ve formed your business and want to start marketing through social media. Now what?

Here are a couple tips to think about when creating your profile:

Start with a Social Media Strategy

Even before selecting which channels you’ll use, you need a detailed strategy that will keep your marketing efforts on track. The first step is to figure out how you want to portray your brand. For best results, align your social media approach with your company culture and make sure it addresses your business goals and audience needs. Always strive to establish your brand’s own identity on social media so that your company can stand out among its competitors.

Choose the Right Social Networks

There are many different social media platforms to choose from today – Facebook, Twitter, LinkedIn, Instagram – and depending on your strategy, you should be able to determine which ones are right for your startup. Look specifically at the target age group of your audience, the location of your business and the nature of your services when making the decision. One last tip: keep social media profiles limited to a couple of networking platforms. This way, you can easily monitor them, keep them up-to-date and interact with your followers more closely.

Build a Community

For long-term growth and success, the best thing you can do is build an online community of supporters who give your startup additional exposure and promote brand awareness. You can do this simply through personal interaction, relationship development and customer satisfaction. In general, customers greatly appreciate companies that put in effort to engage with their followers and connect with their audience.

Listen Instead of Talking

The biggest mistake you can make on social media is not listening to your followers. When used correctly, social media platforms allow you to garner valuable feedback. Respond to comments, mentions and feedback even if they’re negative. Social listening is an excellent tactic to monitor what people are saying about your brand.

Experiment

Sure, going the traditional route in terms of strategy is great, but every now and then, it’s great to think outside the box – as long as what you’re doing doesn’t compromise your brand’s integrity. Being creative and innovative will generate new ideas and develop the mindset you’ll need to resolve any problems later on.

Evaluate your social media strategy regularly

Startup companies can get overwhelmed by the fast pace and growth, but it’s important to take a step back every now and then to measure and analyze your results. Tracking performance data, such as growth, engagement and sharing, is the best way to identify which tactics are working and which ones aren’t. Things change with time and social media is no different. Therefore, it’s important to assess your startup’s social media business plan regularly to figure out the strengths and weaknesses of your profiles.

A Few Last Words

Social media takes time and energy, so don’t be disappointed if the results you want don’t automatically unfold. Be patient and devote the appropriate amount of work into each account. With time, your profile will reap the benefits of company visibility and audience engagement, which eventually leads to paying customers and investors.

If you have a question about social media for your Startup or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Crowdfunding For Equity: Title III and Equity Crowd Funding 101

Business Plans and Crowdfunding

Crowdfunding For Equity: Title III and Equity Crowd Funding 101

What is Equity Crowdfunding?

Equity crowdfunding is on the rise after the signing of the Jumpstart Our Business Startups (JOBS) Act was signed by President Obama in April 2012.

Simply put, it is a type of crowdfunding that enables broad groups of investors to fund startup companies and small businesses in return for equity.

Three years after the JOBS Act was initially passed, Title IV (Regulation A+) went into effect, allowing larger companies to accept capital from both accredited investors (the wealthiest 2% of Americans) and non-accredited investors (the other 98% of Americans). This expanded when Title III (Regulation CF) was enacted in October 2015, which also allowed early stage companies to accept capital from both accredited and non-accredited investors.

More About Title III (Reg CF)

Title III allows startups and small businesses to raise up to $1M from the general public – an unprecedented way to raise capital. More specifically, investors who have less than $100,000 in both income and net worth may invest at least $2,000 per year, and as much as 5 percent of their income or net worth (whichever is less) per year.

Investors whose income or net worth is greater than $100,000 may invest up to 10 percent of their income or net worth (whichever is less) per year.

Thus, Title III gives companies that are historically underserved by the current capital markets an equal opportunity to equity financing.

On May 16th, Title III will officially go into effect.

Process

Choosing a Funding Portal

Under Title III, companies must use an online intermediary (either a broker-
dealer or crowdfunding portal registered with the SEC and FINRA), to facilitate a
fundraise. Experienced portals with a deep understanding of the regulations
surrounding Reg CF can help ensure that their campaigns are compliant with SEC rules.

Filing a Form C

Companies raising under Title III do not need to get SEC approval to initiate their
raise. They must, however, prepare a Form C and file it with the SEC 21 days prior to launching an offering. This form includes basic information about the company, its employees and the terms of the raise.

Disclosure Requirements – Financial Information

In addition to Form C, necessary financial information will depend on the size of
the intended investment needs:

 Under $100k – Internal financial statement review

 $100k-500k – CPA reviewed financial statements

 500k-1M – 3rd Party audited financial statements

 1st time crowdfunding issuers offering more than $500,000 would be permitted to provide reviewed, rather than audited, financial statements.

 Disclosure Requirements – Ongoing Reporting

Providing progress reports not only build trust with investors and keep them informed, but they’re also a very much required part of the disclosure requirements. Upon the successful closure of your campaign, you will be required to provide ongoing updates to your investors in the form of an annual report, which will include similar information that was included on the Form C.

In summary, what are the benefits and pitfalls of Title III?

Benefits:

 Title III can be an efficient way to quickly startups raise capital from the crowd

 More investors equate to more supporters in your startup

 Reporting requirements give founders and investors an opportunity to

Pitfalls:

 Current statutory disclosure obligations and costs are overly burdensome

 Legal and accounting fees may be higher than traditional capital-raising

 Title III does not include a “testing the waters” provision (like Reg A+ maintain a more open and transparent dialogue methods does) so that issuers can gauge interest before incurring burdensome filing and preparation costs

Remember, Regulation CF will become effective 180 days after the final rules are published in
the Federal Register on May 16, 2016.

If you have a question about your equity crowdfunding for your Startup or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

How Does A Convertible Note Works For Startups?

How Does A Convertible Note Works For Startups?

A convertible note is an investment instrument intended to provide a startup company with early stage financing.

It’s a compromise of sorts, blending the downside protection associated with a loan and capturing the upside potential of selling equity shares.

Why are they used?

It can be very difficult for investors and entrepreneurs to agree on the valuation of an early stage company. Valuations are complex, and require a considerable amount of time and data that early stage startups just don’t have. A convertible note for startups allows the valuation conversation to be delayed until later down the road when a valuation can be more easily determined. Typically, this occurs at the next funding round. At which time, the note will convert from a loan to equity.

What’s the “discount rate” and other terms?

Early stage investors that invest in the form of a convertible note expect to be appropriately compensated for the extra risk taken by investing at such an early stage. As such, when a valuation is determined at a subsequent round of investment, the early stage investors typically receive a “discount” on that valuation where their investment gets converted at a cheaper valuation. The discount rate is predetermined and agreed upon at the time of signing the note. 20% is a common discount, but it can range widely from around 10% on the low end to 35% on the high end.

Here’s an example of the convertible note process:

Joe Angel invests $500K in a seed round investment
Startup issues Joe Angel a convertible note for $500K that has an automatic conversion feature at the next round of financing with a conversion discount of 20%
Startup closes a $1M Series A round with a VC at a pre-money valuation of $5M
VC receives 16.67% equity
Joe Angel’s note will convert to equity at a 20% discount on the pre-money valuation for 10% equity

The above return does not account for interest on the loan, which typically ranges from 5-7%. It’s not paid out like a regular loan, but instead accumulates and then the interest is added to the conversion amount at the end of the Series A startup funding round.

Main benefits:

Convertible notes are attractive for both the startup founders and potential investors. The startup needs this type of early funding to prove their concept and build momentum, and it gives savvy investors a way to gain significant discounted equity in a potential rising star.

Other benefits include:

Relatively simple to create, especially when compared to the preparation and legal resources needed for later funding rounds. The negotiations around valuation can be deferred, so the founders can focus on initial strategy and refining their service offering
Early investors should receive discounts because they took a chance on the firm at its earliest stages and they then often remain as loyal long-term investors.

Some caveats:

With the discount, the startup does give the investor a bigger stake in the company compared to the same money received by other investors, but this early-stage investment is often required in order to reach any growth.

On the investor’s side, they need to look very closely at the startup to be sure they are not taking on outsized-risk. The risk involved is higher than what is reflected in the typical 20% discount of the convertible note. This simply boils down to the challenges facing startups to actually move forward from seed to Series A funding rounds. Less companies are able to do it as they don’t build enough momentum to warrant larger-scale VC money.

Another risk for convertible note financing can come if the convertible note is too large. The problem can come when it converts to represent a big portion of the next round, which might discourage other investors from coming on board because they’re limited in the potential equity stake.

If you have a question about pursuing a convertible note strategy for your Startup or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Top 8 Success Tips For First Time Founders

Top 8 Success Tips For First Time Founders

As a Startup entrepreneur it’s easy for your work to become your life, and 8 years to effortlessly slip by.

I founded what has become The Startup Garage in January of 2008 with passion for helping entrepreneurs start and launch companies of impact.

Our business, team, and services have evolved, transformed, and changed many times over. Yet, throughout the years the fears, issues, and struggles seen amongst first time founders have remained the same.

As a Startup founder, regardless of where you are geographically or financially, there appears to be common threads, and snags all of us face at one point or another along the journey.

In 8 years of service, The Startup Garage, has helped over 200 companies, non-profits, social enterprises, find success. In celebration of our 8 year anniversary, I’d like to share with you.

My Top 8 Success Tips:

Startups take time. Create a plan that avoids too much false or unnecessary urgency.

Having a false sense of urgency can keep us from putting our energy into the right things at the right time. It’s true, success doesn’t just happen, it requires careful, detailed planning and action. Be sure to enlist the help of business plans, checklists and project management platforms, to prioritize and stick with daily, weekly, monthly, and annual goals.

Don’t focus too much on the product/service. Balance your focus.

All to often entrepreneurs become so excited over their product or service, that they get lost in their own enthusiasm. The core of the business might be the problem the product solves. But, it’s imperative to give equal weight to other key comments of the business like, the team, the marketing strategy, business model and customer feedback.

There is plenty of investor money out there for companies who reach the milestones investors care about. Know what investors care about and focus on that.

Remember as an entrepreneur your perspective and mindset, often times differs from that of an investor. We’ve designed a helpful infographic here>> Achieve Investor Milestones
to keep you visually in tune with achieving the milestones investors care about, to communicate with them in a language they understand.

Founders are the biggest problem for most startups. Get out of your own way.

We call this the founder’s dilemma, and it’s a big one. Founders don’t let go easy, surrendering control, delegating tasks, and learning to be a leader rather than a micro-manager can take time. Recognize the dilemma and start delegating tasks even if it feels uncomfortable.

Healthy founders leads to healthy startups.

Founders are the core of a business inspiration, motivation, and success starts with you, then ripples out to the organization at large. Your business is your responsibility, treat it with care by caring for your health and well-being. To be efficient and firing at a high caliber it’s essential to embrace a healthy physical routine, and check in with your mental state. Moderation is key, working non-stop leads to startup burnout, and doesn’t help anyone within your startup.

Know your exit strategy.

Knowing your end game, makes every decision easier. Having clarity on on your exit plan, whether it’s not exiting, Merger & Acquisition, or IPO affects how you run your business day to day.

Planning is critical

The lifecycle of you startup depends upon planning, documenting, and communicating even the most mundane tasks.

Take on the student role and always be learning.

The smartest founders, are the ones that don’t know all the answers. Being a lifetime learner, evokes greater innovation and creativity. Knowledge is power and will help increase awareness of the world around you.

If you have a question about your raising capital for your Startup or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

14 Key Insights From The Lean Entrepreneur Author Brant Cooper

14 Key Insights From The Lean Entrepreneur Author Brant Cooper

The Startup Grind San Diego hosts monthly fireside chats, featuring successful local founders, innovators, educators and investors.

The Startup Garage Team had the pleasure of attending Dec 10th event featuring San Diego Startup pioneer Brant Cooper.

Brant is the author of The Lean Entrepreneur, which supports organizations in jump-starting their innovation practices. He travels the globe helping to teach and educate entrepreneurs and intraprenuers,
through the simple objective of empowering individuals to make the change they want to see in the world.

We found Brant to be humble, entertaining, and very inspiring.

The TSG team couldn’t help but share 14 Key Insights we picked up from his talk.

San Diego Startup Community Verse Silicon Valley

The comparison needs to stop. We’re not Silicon Valley, we’re never going to be Silicon Valley. We don’t want to be Silicon Valley or we would be living in Silicon Valley.

Women Entrepreneurs

We’re one generation away worldwide from woman dominating entrepreneurship.

Women Entrepreneurs
are now economically empowered to start their own businesses.

Large Enterprise & Startups

Help Larger Enterprise by teaching entrepreneur skills. Make large enterprises value creation machines, so that they can give back new value to customers, as opposed to just being focused on wealth.

The Transformation to Value Creation Machines

It’s fun to be in a startup, but you can start being this way in a large organization too by being more entrepreneurial, closer to their customer, faster, and more agile.

College and Entrepreneurship

The real unicorn is someone who drops out of high school and hits it big.

Incubators and Accelerators – Mentorship

The biggest difficulty around the world aside from Silicon Valley and maybe NYC is the mentors, finding quality mentors that really know how to do startup mentoring is really hard.

Most Eco-systems are pulling people from large businesses, their heart is in the right place, and they can give great advice on a particular industry, but when it comes to founders issues, entrepreneurism, specific technologies, a lot of mentors don’t know what a startup is all about.

Entrepreneurship Best Practices

Top Ten Things Entrepreneurs Don’t Do…Read a Top Ten List.
The thing that’s overlooked the most is hustle.
It is the relentlessly pursue part that is actually going to make your idea a success.

We’re in a Customer Centric World

The rise of UX & Design.
The productivity gains we’re going to find are on the end user side.
You’ve build a satisfied customer experience, now you need to surpass the threshold and build passion, not with your product.

Crowdfunding a Book

It’s a great way to get a marketing budget, while helping build a community around the value proposition of the book. Be cautious, taking money from people that aren’t in your market segment is always a big no no, and actually dangerous.

Lean Principles

The idea around lean is the elimination of waste. Don’t waste your time, money, resources, creativity, inspiration in building products nobody wants.

Emerging Industries in SD

There’s a lot of people that think an eco-system can choose what industry to develop. Rather An eco-systems gets chosen, industries are chosen based upon who exits.

Entrepreneur Complaints

Entrepreneurs no matter where they are alway complain over a lack of money.
You can build your startup here (SD) and not have to move if you build out your business model.
You can complain about a lack of seed money, but if you build a successful business model you can raise money, bottom line.

Government and Startups

There’s a lot of mythology around the government money and innovation. The government even in the US has funded in some way almost all innovation we have ever done.

Startup Marketing

You should be able to see some organic growth that shows that there’s some buzz around the product, without spending any money on marketing.
Too quickly we’re into building the product and all the features, then now I need a marketing budget, and I need to spend a bunch of money on marketing in order to create a buzz.
Rather, the product better start the buzz, marketing is for amplifying the buzz the product creates, not for creating it’s own buzz.

Watch the complete interview here>>
Brant Cooper at Startup Grind San Diego

If you have a question about your raising capital for your Startup or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

How To Understand Customer Lifetime Value and Customer Acquisition Costs?

How To Understand Customer Lifetime Value and Customer Acquisition Costs?

The Key to Profitability for your business

Understanding customer lifetime value and customer acquisition costs.

It comes as no surprise that a company must earn more revenue over the lifetime of any given customer (referred to as Customer Lifetime Value or CLTV) than it costs to acquire the customer (referred to as Customer Acquisition Cost or CAC).

While there are additional overhead and operating expenses that affect profitability, the first step in building a profitable business is to implement a scalable business model where your Customer Acquisition Cost is lower than your Customer Lifetime Value.

In theory, this seems rather obvious. However, putting this concept into practice can be difficult as your CLTV and CAC aren’t always extremely apparent. Additionally, it takes seasoned marketers and business leaders who understand how retention rates, sales & marketing channels, and business models affect

CLTV and CAC.

In this blog I’ll be discussing the factors that affect CLTV and CAC as well as strategies for increasing CLTV and reducing CAC. While much of what’s presented below is generally true across most industries, there are certainly caveats for every industry and business model.

Customer Lifetime Value

Before we discuss strategies for increasing CLTV, let’s wrap our heads around what CLTV is and how it is calculated. In its simplest form, CLTV is a prediction of the net profit attributed to the entire future relationship with a customer. CLTV is calculated by forecasting the average customer lifetime (the number of months the customer purchases your product), the average monthly spend of your customers, and the average monthly cost of distributing your products.

As a result, you can increase your CLTV by:

1) increasing the average monthly spend
2) increasing the average customer lifetime
3) decreasing the cost of distributing your product.

Increasing Average Monthly Spend Per Customer

The most immediate way to increase your average monthly spend is to increase your price. However, an increase in price will often lead to either a reduction in conversion rates (the number of total customers) or a reduction in retention rates (the number of repeat purchases from a given customer).

You don’t want to increase your average monthly spend only to decrease the total number of customers or the average customer lifetime.

You can also increase the average monthly spend through upselling and cross-selling techniques. Think of Amazon suggesting additional products and services bought by other customers looking at the same item. Additionally, you can implement increase average monthly spend by implementing loyalty programs, improving conversion rates through website optimization, and streamlining the sales process.

Increasing Average Customer Lifetime

CLTV can also be increased by improving retention rates, or the percentage of customers that remain customers over time. Companies with low retention rates are required to draw the majority of their profits from just one purchase per customer while companies with high retention rates benefit from spreading their CLTV over numerous purchases.

Retention rates can be increased by improving customer satisfaction through strategies such as customer service and support centers, sending periodic discounts and promotions, offering loyalty programs, and enhancing the overall customer experience.

Decreasing the Cost of Distribution and Fulfillment

Every business’ cost structure will vary but some of the more common ways to decrease the cost of distribution and fulfillment include: purchasing inventory in larger amounts, utilizing cheaper vendors and suppliers, substituting lower cost materials, decreasing base salaries and increasing commissions, utilizing independent reps over in-house reps, and reducing waste.

Customer Acquisition Cost

Developing a business model that results in a low CAC and that is scalable is difficult and where many startup businesses fail. In a world of data overload, it is challenging to attract and successfully sell products and services to people that have never heard of you. Every product and service is different, but for most companies the customer goes through several stages before making a purchase.

First, they have to become aware of your product or service through PR, advertisements, word of mouth, social media, reviews and blogs, etc. Next, they often need to be courted by sales reps and go through some sort of on boarding process.

This process from start to finish can be costly. Naturally, you have options as to how you allocate your marketing and customer acquisition dollars. Strategies such as SEO are typically low cost but usually don’t offer a strong degree of control, targeting, and results. Unlike strategies such as direct sales which are typically very costly but come with a strong degree of control, targeting, and results.

It is important for businesses to research standards in their industry and then benchmark themselves against those standards in order to pick the appropriate channel mix for their business. Additionally, companies can get creative with low cost channels that will help to reduce the average CAC across all channels.

For example, referral and word of mouth programs (such as business that offer one month free for every 10 friends referred) are a great way to acquire new customers at very low costs. While you cannot rely on these strategies exclusively, they will help reduce the average CAC across all strategies.

Optimizing the CAC and CLTV ratio is crucial to the success of any business. The earlier the business can figure out the right mix the sooner they can begin scaling in a profitable way.

Here at The Startup Garage, we help entrepreneurs devise the appropriate business models and sales and marketing strategies that will enable them to scale a profitable business. Contact us to learn more.