Tag Archives: Pre-Launch Actions

Inside The 2016 Tech Coast Angels 10th Anniversary Quick Pitch Event

Inside The 2016 Tech Coast Angels 10th Anniversary Quick Pitch Event

It’s no secret, the Tech Coast Angels is one of the largest, if not THE largest angel investor group in the nation. “Consisting of experienced CEOs, senior executives, current and former entrepreneurs, venture capitalists and other professionals, members have invested over $180 million in more than 300 companies and have helped entrepreneurs attract more than $1.6 billion in additional capital rounds,” according to the TCA Website. Regional chapters include: Los Angeles, Orange County, San Diego, Central Coast, and the Inland Empire. Within those chapters, the San Diego John G. Watson TCA Quick Pitch Competition celebrates its ten year anniversary this year.

“The Quick Pitch Competition is one of the most recognized angel investor events in the nation, showcasing talented entrepreneurs who each have two minutes to pitch their business to an expert panel of judges and large audience of investors, business executives and community leaders,” states Qualcomm Ventures. Finalists this year showcased San Diego’s entrepreneurial diversity, showcasing companies in various industries, including life sciences, consumer products, and tech industries.

This year the event was conducted a little differently, instead of the winner being selected by the judges, the audience of 500 were privileged enough to name the 2016 Quick Pitch winner. Another incentive for entrepreneurs was the doubling of last year’s cash prize to $30,000, although the top three winners would have to divide up the cash prize. The ten judges were therefore considered coaches and provided insight and feedback to the top ten savvy startup competitors. The winners were announced following an evening of meet and greet with TCA members, quick pitch finalists, and thought leaders within the San Diego startup community. As one can imagine, these entrepreneurs were eager to hear the results, but they were able to enjoy themselves throughout the entire event.

In The Hot Seat [The Feedback]

With a panel of the top players in the San Diego Startup Community serving as coaches during the TCA Quick Pitch event, there was extensive feedback provided to each presenter. Following each two-minute pitch, judges were given three-minutes to provide constructive thoughts or ask questions to each presenter.

Top 5 Points of Feedback From the Coaches

Credibility – Highlight key experiences and certifications that make you and your team a credible player in your target space.

Traction, Traction, Traction – Clearly present metrics and data points that show how your company is gaining traction.

Customer Acquisition Cost – this is a key metric all investors are interested in. Lifetime value (LTV) is also a key metric in rationalizing your CAC by quantifying your ability to monetize customers.

Optimization – If you are allotted a specific time period, use every second as effectively as possible. Two minutes is short – asking the audience questions, spending too much time on basic company information is not a meaningful use of your time
Growth Potential – Make sure you clearly communicate current revenue as well as the big picture in Year 5; investors want profitable, scalable companies to invest in.

Mark Your Calendars

The Startup Garage is a proud sponsor of the annual TCA Quick Pitch event. For San Diego entrepreneurs, these events not only bring entrepreneurs and major Angel investing groups in the country together, but they provide an open environment to collaborate, learn, and strengthen our startup community. With the increasing number of innovative startups being created every year, these events keeps everyone up to date on ongoing trends and resources. If you are a company looking for funding, please visit the TCA website and check out their application criteria.

At TSG, we believe that entrepreneurs change the world and push the boundaries of innovation, especially when they collaborate. San Diego is an expanding ecosystem of business owners and thought leaders from all walks of life. Be sure to mark your calendars for future events similar to the TCA Quick Pitch event as they bring a multifaceted perspective on industry trends and provide insight into what it means to be an entrepreneur in a time where innovation is ever evolving.

How To Identify a Startup Co-Founder

Identifying a Startup Co-Founder from The Startup Garage

How To Identify a Startup Co-Founder

It is all too common that a business savvy entrepreneur comes up with a good idea but cannot build the product.

Conversely, there are many tech founders that lack the business and interpersonal skills
necessary to take the product to market, develop partnerships, and liaise with potential investors.

Many founders of early stage startups struggle with assembling a well rounded founding team as they don’t know how or where to find the right co-founder.

This blog post is intended to help such entrepreneurs through the process of identifying the right co-founder for their business.

What: Hire Someone With Complementary Skills

While this seems obvious in theory it is a common mistake made by many first time entrepreneurs. It is our human nature to gravitate towards people that have similar skills, personalities, and approaches as ourselves. However, this defense mechanism does not overlap with identifying a good co-founder.

Clearly, you need to be able to work well with your co-founder, but you also need to challenge each other’s ideas and ways of thinking, not to mention balance each other’s shortcomings. Start by identifying the job description or the scope of your needs. What are the major gaps in your skill sets?

What departmental roles are currently underserved or would add the most value to your business?

Who: Hire Someone That is Sufficiently Qualified

Now that you’ve identified ‘what’ you need you’ll want to begin thinking about ‘who’ would be the right person to fill this roll. Start by asking yourself a few simple questions. What are the skill sets and expertise required to execute this roll? What are the attributes that would help attract potential investors (i.e. experience growing early-stage startups, direct industry knowledge, credibility and track record, passion and dedication, and personality fit)?

What is the pay structure that will entice this person (i.e. salary, equity, a combination of the two)?

Where: Start With Your Network

Lastly, now that you know what and who you need, we just have to figure out ‘where’ to find this person. The best place to begin is your own personal network. Start by identifying any people you may know personally that fits the ‘what’ and ‘who’ criteria that you’ve come up with. If this falls short, identify people in your network you trust that may have access to candidates whom fit your criteria.

Clearly describe ‘what’ and ‘who’ you are looking for and ask for warm introductions. If your network or extended network does not pan out there are several websites and events intended to help startup co-founders meet one-another.

These sites include TechCofounder, Founder2Be, FounderDating, and CofoundersLab. LinkedIn can also be an excellent resource for identifying potential co-founders.

Finally, you can also work with recruiters that specialize in your industry or that do startup placement; however, these services are not for free.

Prepare Your Terms

It is important that you draft up a Founder’s Agreement that outlines the terms of your partnership with a potential co-founder. While you will certainly want to remain flexible and open to negotiating these terms, it is helpful to come to the table with some basic ideas surrounding roles and responsibilities, pay structure, ownership splits, vesting schedules, etc.

This not only shows the candidate you are serious but it also gives him/her the information needed to take the conversation from pitching the opportunity to negotiating the terms.

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

Looking 3 Steps Ahead: What Comes After the Startup Ideation Phase

Looking 3 Steps Ahead: What Comes After the Startup Ideation Phase

What are the next steps after you come up with an idea for a new business?

After the ideation phase of a business, many teams loose focus. Fortunately, there is a tried and true blueprint that successful companies in all industries have followed in order to take a business entity from a spreadsheet into the real world.

Here are the three steps that all would-be Startup companies should consider after the initial visualization.

1 – How do you evaluate the current target market and market saturation? 

Identifying competition should be first on the list of any start up. This will help a company to more accurately define its own role in the marketplace, narrowing the sales funnel and eventually increasing the ROI of all marketing efforts. 

A high percentage of the first funds that you receive for your business idea will likely be earmarked for a highly detailed differentiated market analysis. Google Trends and the Google Keyword Tool are a great place to start, but the search should definitely not end there.

A startup company should consider geographic and demographic data from across the board in order to identify the audience that is making the current purchases of the products that it is considering selling.

More than 50% of businesses now include Facebook and Twitter commentary in their overall assessment of market saturation. If there are many comments about a product or industry trend, but most of the comments are negative, this means something much different than commentary that is overwhelmingly positive.

Researchers should be attuned to the fact that Facebook is prone to be much more negative than Twitter regardless of issue.

2 – How do you determine if your idea is profitable and scalable?

Profitability is a function of the perceived market value of your product, which can be approximated by a price/value industry matrix, minus the expenditures of your company per unit produced. With a volume that outpaces your fixed costs, you have a viable business structure, at least in theory.

Scalable ideas must incorporate variable costs such as taxes, marketing, promotion, distribution and government compliance into the equation. These kinds of calculations may require some professional assistance, but they should be determined before the initial start of production.

50% of businesses, and 60% of investors, want to see some sort of breakeven analysis in an initial business plan in order to help determine the overall viability of a would-be company. This should definitely be included; however, it should not be the end of the marketing analysis. Although it can be quite difficult to project profitability without a round of sales, every company should attempt to do this without exaggerating results, especially if multiple rounds of funding will be required to retain viability.

3 – How do you secure the flow of your marketing information to your customer?

One of the first things that an embryo company should consider is its niche in the marketplace. This is incredibly important in order to solidify the proper distribution of the marketing message. No matter how big or small a company, compliance with the current flow of information is critical. Business no longer runs the world of business – telecommunications does. This will only become more apparent as time goes on.

Currently, less than half of the Fortune 500 is mobile compliant by the standards of Google. 70% of those companies barely pass muster. 100% of these companies are spending millions in order to become fully compliant.

As of April 2015, any company that is not fully compliant by Google standards will begin to
lose visibility within the search engine, especially within the mobile search market. If this is a priority to a multibillion dollar company, this is a virtual death sentence to any high growth start up.

Guest Blogger Cameron Johnson is a business consultant and entrepreneur.
Over the course of his career he has conducted case studies on both social media optimization and non-profit marketing. Cameron has also had the opportunity to speak at international business conferences and was recently recognized as one of the world’s top 100 advertising experts to follow on social media

The Entrepreneurial Advisory Council

The Entrepreneurial Advisory Council

The Entrepreneurial Advisory Council hosted its first workshop.

The event titled, “Making Your Startup Investor Friendly” took place on Wednesday, October 8th 2014 in San Diego, CA.

The Entrepreneurial Advisory Council is a group of professionals that serve San Diego’s growing number of innovators, entrepreneurs, and startup businesses.

The council’s expertise includes legal, financial, capital formation, and business planning services. The common thread among all members of the Entrepreneurial Advisory Council is their commitment to building meaningful connections that lead to successful business ventures.

Michael Acheatel, the President of The Startup Garage, is one of the Council’s co-founders and was a speaker at the event. His presentation focused on the milestones that investors care about at each stage of the funding and milestone timeline. He took the audience through the 7 major categories of startup milestones – business planning, team building, market traction, legal, operations, product development, and founder leadership – and highlighted how these milestones evolve throughout each round of funding. He specifically focused on the early stages of funding from friends, family, and founders as well as angel investors.

Michael was followed by his fellow co-founders of the Entrepreneurial Advisory Council – Hass Sadegi, Rob Domingue, and Joseph Erle. Hass is the Principal Owner of Sadeghi Legal and offered his advice on how and where to legally structure your startup as well as how to avoid exorbitant lawyer fees down the road based on appropriate planning in the early stages.

Joe is an insurance broker with 5th Ave Insurance and spoke about the types of insurance that investors require and how to reduce risk for the company.

Rob is the Director of Transcend Valuation and spoke about valuation and how to both create and determine value in a company.

Lastly, the panel opened up to a Q&A session where they received several excellent questions from the audience.

With good food, a great audience, and 4 experts with unique insights on what investors like to see in a startup, the event was deemed a complete success.

The Entrepreneurial Advisory Council will host a workshops once every quarter in San Diego.

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

How to Make Family, Friends, & Founders (FFF) Investment Legit?

Friends Family and Founders Invesstment from The Startup Garage

How to Make Family, Friends, & Founders (FFF) Investment Legit?

Welcome to video Fridays from The Start Up Garage

 

A place where The Startup Garage’s team, answers questions directly from viewers

 

Key Take Aways From Video:

 


1) The first thing you want to make sure of is that your startup is incorporated

2) The second thing you’ll want to consider is whether you’ll offer
debt or equity

3) One of the commons documents that a lot of states will require is called a PPM

4) Get your paperwork in place or it will come back to haunt you.

 

Complete Transcript Below:

Question= I need to have in place to make my family’s investment in my startup legit?

Well Michelle this is definitely a common question that we get all the time, and some people avoid doing the proper paperwork, and it usually comes back to haunt them in the startup process, so I highly recommend you get the proper paperwork in place. The first thing you want to make sure of is that your startup is incorporated.

There’s a number of different types of corporations: SC, LLC, and you’re going to want to talk to an attorney about that to determine what type of corporation you want to set up.

The second thing you’ll want to consider is whether you’ll offer debt or equity. If it’s a debt investment then you’ll want to set up a promissory note or a convertible note, and your attorney will also be able to get those documents for you.

If it’s an equity investment, meaning you’re going to give them shares in your company, then that varies state by state. It also has a number of different variables that will depend on what the requirements are that will make that a legitimate investment.

One of the commons documents that a lot of states will require is called a PPM. So those are just some of the basic outlines of what you’re going to want to put in place, before you get your family investment.

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

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How To Evaluate Your Startups Business Model

How To Business Model

How To Evaluate Your Startups Business Model

The business model is the means by which your company makes money for the value that you deliver to your customers.

It is the strategy for how you monetize your product or service.

Your customer will be the ultimate judge of whether your business model works or not.

As a result, it may take trial and error to figure out the best model for your business.

Nonetheless, there are some important steps you can take to help ensure you get started with the best business model possible.

Step 1: Evaluate Your Competitors

By simply looking at your competition you will learn about the business models that your customers potential currently have to choose from. Whether you replicate a competitors business model or your deliver additional value to the customer by improving their business model, it is important for you to know what your customers’ options are.

Step 2: Understand Your Customer

Are you selling to men, women, or children? Are you selling to the wealthy or the poor? Is your product or service an everyday purchase or a luxury purchase? What drives your customer to purchase your product? Knowing the answer to these questions and truly understanding where your customer is coming from will help you determine the best model for you.

Step 3: Determine Your Cost of Sales

It is extremely difficult to determine your price and business model unless you know your cost of sales, also referred to as Cost of Goods Sold (COGS). Without this information, you won’t know whether your price generates a gross profit or a loss.

Step 4: Determine Your Operating Expenses

Every business has some cost of running the business that is not directly related to the sale or a product or service. For example, office rent, marketing budget, accounting, etc. It is important that you understand this cost structure as well so that you can turn a net profit once these expenses are accounted for as well.

Step 5: Compare Business Models

You will want to take your top 2 or 3 business models and build out a complete set of financial projections for each so that you can test the key variables of the business models and compare them with one another.

 
Below is a list of the most common business models:

  • 1. Brick and mortar

    • Whether you open your own brick and mortar retail store or you sell your product wholesale to a brick and mortar retailer, one of the oldest and most basic business models is a traditional storefront.

  • 2. Direct Sales

    • Direct sales is a method where the company sells directly to the end-user via a sales force. By cutting out the middleman, direct sales usually allows the company to sell the product for less and provide value to the customer via reduced prices.

  • 3. Subscription

    • The most obvious example of a subscription revenue model is a magazine or newspaper. Subscription business model is very popular and lauded among business owners due to its recurring revenue nature where gaining one new customer results in ongoing revenue throughout the lifetime of that customer.

  • 4. Multi-Level Marketing

    • Multi-level market, or network marketing, is a model where independent marketers buy a company’s products and sells them to consumers directly as well as to other “downline” marketers who in turn do the same. Each marketer in the “downline” receive a commission on that sale.

  • 5. Auction

    • The auction business model is free-market capitalism at its finest where the customer who is willing to pay the most gets the product.

  • 6. Service

    • The service industry is very broad and includes many sub-models but at its core, consumers pay a flat rate or an hourly rate for services rendered.

     

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

    How To Determine Potential Startup Costs?

    How to Determine Startup Costs? From The Startup Garage

    How To Determine Potential Startup Costs?

    Startup expenses are the costs incurred before the business opens its doors.

    Many first time entrepreneurs underestimate the amount of startup expenses that it will take to launch their business.

    Before you start making your first expenses, it is important to create a plan of your initial financing so that you know exactly what it will cost.

    When creating your startup expense plan, it is important to understand the different types of costs your startup will incur: expenses and assets.

    Expenses are the costs that occur during the startup phase for operations, such as travel, rent, supplies, marketing materials, legal fees, and business incorporation fees.

    Assets, also referred to as capital expenditures are one-time costs of buying assets such as inventory, property, or equipment.

    Determine Your Startup Costs

    To estimate your startup costs, start by brainstorming all of the various expenses and assets that your company will phase before you begin selling to customers.  Next begin to assign actual costs.  You may need to do some searching online, call service providers, and reach out to professionals.  Some of the most common expenses and assets include:

    –        Legal

    –        Collateral (sales and marketing literature)

    –        Inventory

    –        Consultants

    –        Accounting

    –        Rent and deposits

    –        Research and development

    –        Assets (leasehold improvements, fixtures, signage)

    –        Long-term or fixed assets (land, plant, equipment, furniture)

    –        Website or app development

    Timing is Everything

    Remember, your startup costs are incurred before you generate any income from the business.  Be sure to develop a budget for all of your startup costs as well as some additional funding as most businesses are not profitable for some time.

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

    I Have a Great Idea, What’s Next

    I Have a Great Idea, What's Next from The Startup Garage

    I Have a Great Idea, What’s Next

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    You have a great idea and want to start a business, so now what? One step I like to recommend to new entrepreneurs is that you start with a self assessment. The idea is for you to learn more about yourself, your personal and financial goals and how committed you are to getting your business off the ground and successful. Once you have completed an assessment, read through it again to see if your passion, business idea and personal and financial goals align with one another.

    If you determine that your goals and business idea align, you now need to make the distinction between that great idea and a great business business. An idea is usually a product or service that will be sold to a particular group of people. A business is the vehicle, strategy, and system around the idea that makes it profitable. This includes strategies for how to produce the product or service, how to distribute it, how to market it, and how to turn all of that into a profit.

    Take the time to answer the following questions to develop a clear concept of your business:

    • What business do you want to start?
    • What product/service do you plan to sell?
    • Who will buy your product/service?
    • Why will they choose your business?
    • When will customers buy your product/service?
    • How will customers know about your company?
    • What will you charge customers for your product/service?
    • What you are going to do different?
    • How is your business going to stand out and succeed?

    Once you have answered these questions and have a clear direction of your idea and business concept it is time to write a business plan. A business plan will set the foundation for your company, and then it will be time to launch.

    Whether you have a question about Launching your Business or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

    Trademarks, Copyrights, and Patents

    Trademarks, Copyrights, and Patents from The Startup Garage

    Trademarks, Copyrights, and Patents

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    When starting a business, one thing to think about is security. Not just the security of your business in general, but security of your ideas and what you have created. This is where things such as trademarks, copyrights, and patents come in to play. These are ways to assure that your business is safe from plagiarism and knockoffs. Trademarks are used to protect things such as business logos, names or anything that is put on your product to distinguish it from other products. A copyright protects things that are written such as any literature, books, music, or visual and performing art. A patent is the protective right against anything that is a physical invention.

    Most startup companies will want to trademark their businesses to ensure that no other company has or uses the same name or logo. Trademarking can be done simply online at the United States patent and trademarking website www.uspto.gov. An attorney is usually not required for trademarking, but it may help things go a lot smoother. The average cost for trademarking is between $200 and $500.

     

    Theoretically, a completed work is copyrighted, but sometimes it is important to file a copyright to avoid infringement. If your new startup company needs a copyright, whether it is for a book, or significant document, it can be easily done online as well. First you must visit www.copyright.com, and then choose the type of work you are copyrighting, and fill out the application. It is that simple, and it will only cost $35 online or $50 if you would like to file the physical papers by sending them through the mail.

    Patents are the most important protection devices for inventions. A patent will ensure that your invention can not be copied by anyone else to make profit. This is why the patent process is a little bit longer and more difficult. First, you must ensure that your product has not already been invented. You can find this information by looking at www.uspto.gov. Now you must decide which category your invention falls under; utility, design or plant. A utility patent is for an invention of a machine or article of manufacture. A design patent is for an invention of a new and original design of an article of manufacture. A plant patent is exactly what it sounds like, a patent for an original plant that was created and reproduced.

    Next you must fill out the correct application at Uspto.gov. In most cases an attorney is highly recommended. This is important to make sure that your patent is filed and protected correctly. Patents are not cheap so it is important to make sure that everything is done correctly and uniformly. A patent runs anywhere from $1,500 to $15,000 depending on the type.

    A business is important to protect, and so are your ideas and inventions. The use of trademarks, copyrights, and patents is imperative to providing the protection needed against infringement, plagiarism, and stealing.

    Whether you have a question about Trademarks, Copyrights, and Patents or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

    Overcoming the Fear of Starting a Business

    Overcoming the Fear of Starting a Business from The Startup Garage

    Overcoming the Fear of Starting a Business

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    There are thousands of startup articles that offer advice on the methods, processes and mechanics for starting a business. However, the inner, personal workings of starting a business are just as important as your business plan and capitalization strategy. If you are not mentally prepared to start your business, you will be stopped dead in your tracks.

    Perhaps one of the largest personal inhibitors to starting a business is the fear of doing just that. There are numerous fears that most entrepreneurs face, including the feat of quitting one’s job, the fear of losing one’s hard-earned savings, the fear of failing, the fear of not being there for one’s family…the list goes on and on.

    While these fears are completely natural and can actually help motivate you to be successful, there are a few techniques that you can use to ensure that your fears do not debilitate you.

    • Say yes to your inner voice that’s been elbowing you to start this venture. In fact, write down your reasons for starting your business and remind yourself of these reasons and of your commitment on a continual basis. Believe in yourself and your business.
    • Create a journal or idea board where you constantly write down new goals, ideas, emotions, commitments, etc. This will keep you motivated and excited about your venture.
    • Visualize your success. Determine what success looks like for you, make it tangible and specific: “In 3 years, I will know that I am successful because I am working less than 30 hours a week, taking over $75k/year in salary, attending all of my kids soccer games and going on a date twice a month with my significant other.”
    • Similarly, create affirmation statements and repeat them to yourself. “I am going to sign 3 new deals this month.” Keep a constant list of affirmation statement on hand and read them daily, sometimes multiple times per day.
    • Become concretely aware of your beliefs. Prioritize yourself, your business, your family, your money, etc. Be aware of your beliefs and do not allow yourself to stray too far from what is important to you.
    • Empower yourself with knowledge. The more you know about your business, your finances, your competitors, your customers, various business strategies, etc, the better and more informed you will feel about the decisions you make.
    • Take baby steps. Start your business part-time while maintaining your full-time job. This will allow you to determine if entrepreneurship is right for you and if your business is truly a good idea while mitigating the risk of failure.
    • Be realistic with your expectations. If your expectations are too low, then you likely are not suffering from the debilitation of fear. On the contrary, if your expectations are too high, than your fear of not meeting them is likely valid. Be sure to align your expectations with your resources, be that time, money, support, knowledge, relationships, etc.
    • Continually build your non-financial capital. Your business relationships and advisors as well as your personal support systems can often be the most effective way of getting through the tough times that you will certainly face.
    • On a practical note, be sure to continually shake up your routine so that you do not fall in a rut. Refuse to make excuses, accomplish unfinished tasks and check them off your list.
    • Lastly, accept your fear and face it head on. Know that it is better to have tried and failed than to live with regret of what you could have done. The latter will be far more disappointing.
       

      Whether you have a question about starting a business or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!