> Hi Newbie
> I own a small/tiny company with a partner now for seven years with no debt
> except for our building. ($9M last yr revenue and 23 employees)
> We were lucky enough/able get going with credit cards a wing nut and a
> prayer.
> Whilst we never had a prayer of getting any money from a bunch of MBAs I
> also didn't want to work for a bunch of blow dried smart arses that had
> never built anything in their life except maybe a pine box derby car.
>
> I did try to do a start company up during the mid nineties/start of the dot
> com boom using VCs.
> I will never forget demonstrating a piece of hardware, a working prototype
> that was very finished. (There are now several successful versions of this
> product on the market)
> One of the VC/dot com wonder boys that was in the process of losing billions
> for his investors looked straight at me as said "well this is not the
> internet".
> I said I could go back through my presentation but I don't recall ever
> saying that it was "the internet" I did say that it does connect to the
> internet.
> This boy genius said that companies that make hard ware are
> dead.............I suppose he didn't fund the IPod either.
>
> My old boss I used to work for at another company is now a partner in a VC
> firm on Sand Hill road.
> We were talking at mutual a friend's wedding a while back and I asked him
> for some tips about acquiring venture capital for a very capital intensive
> project I have in mind.
> The short story of what I took away from his counsel was this.
> When you pitch your idea it should be good enough that VCs are competing to
> give you money..........if you have to beg someone to give you money then
> you will only end up selling your soul for a bowl of porridge.
> You need to structure a deal where you are still in
> control............ownership is not necessarily control.....the Ford Family
> owns very little Ford stock but they effectively control the company.)
> Make damn sure when you do take "the money" that you ask for enough to get
> the product to market.
> If you have to come back with your hat in your hand once again the devil
> will own your soul.
> Also whilst they do care if the concept will work many entrepreneurs like my
> early self think that if the product works great and fulfils a market need
> then that makes it a good idea to VCs, It takes a team to get a product to
> market and they will care more about your team that you can assemble than
> about a working prototype. A smart energetic kid with out a seasoned team is
> a smart energetic kid with no experience. My old boss would say that you
> gotta ask your self do I want to send this kid to school with my money?
>
> Not all VCs are young and dumb and many like my old boss are very smart and
> they offer lots of good counsel but they do know how to structure a deal so
> that at the first sign of trouble you now work for them instead of them
> providing funding for "your" company.
> Does that make sense?
>
> I also know many startups that failed precisely because they had money up
> front.
> Yes there are capital intensive projects that need loads of cash up front
> but many do not need a lot of cash up front.
> If you have no money then it forces you to be creative.
> If at all possible I would do the route that my partner and I took.
> Make a product that works and start selling it now.
> Live cheap as possible and take the money from those early sales to improve
> the product.
> Listen closely to your customers they will tell you what improvements they
> want and how it should work. (no market research is as good as joe
> customer telling you what he likes and or hates about your product if you
> have to pretend you hate your boss on the phone with your customers and let
> them vent this is pure marketing gold!)
> With out money you are forced to be disciplined.
> You will learn quickly when you are making a mistake and how to become
> comfortable making tough decisions that business/running a company requires
> in the long run.
> I have a meeting.
>
>
>
> Best Regards,
>
> Phillip Coiner, Chief Technology Officer
> GPS Source, Inc.
> 64 N. Mission Drive
>
> Pueblo West, Co 81007
> Phone: 719.510.4552
> E-mail:
pcoinerEraseME
.....gpssource.com
>
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