10-Second Tips: Raise Money

An important stage in any company is to raise money. The 10-Second Internet Manager provides many tips on talking with early and public investors. Here are a few of those tips along with community discussion.

"Choose an investor for the partnering possibilities, not just the financial terms. What extra value can they bring to your long-term business?" —10-Second Internet Manager

"No matter how many people you meet with or how bright they are, there are only about 10 questions you'll ever get about your business. Identify them and master your answers." —10-Second Internet Manager

"The immediate outlook sucks. But the long-term outlook is fantastic." Mary Whitman, Third Avenue Value Fund, on AVX, as reported in The Industry Standard (March 26, 01)

"In an entrepreneur, you're looking for someone who is driven, has high integrity, surrounds himself with good people, and is a team player. You definitely want someone who is proud of the fact that he has hired a lot of people smarter than him." —Jeffrey Feldman, Red Herring

"You need to demonstrate that the money you will spend is just like your own!" —Hemont C.

"Internet companies can generate high margins only if computing and communications enable the creation of economies of scale." —J. Bradford Delong, Fortune

"When a venture capital firm gets serious about a start-up, it asks for a list of customers and strategic partners. VC's often spend an hour or more talking to just one reference." —Alex Grove, Red Herring

"The number of "eyeballs" on a Web site accounted for 77 percent of the variation in acquisition price {examination of 42 internet acquisitions in year ending September, 2000}." —Rajgopal, Kotha, and Venkatachalam (Stanford GSB research paper #1616)

"I once worked with a man named Cecil Rose...He said that any start-up that promises to have profits in less than five years is a phony, but any startup that doesn't have a positive cash flow in 18 months is also a phony." —Peter Drucker (8/22/00 Bus. 2.0)

"We look at the strength of the idea and the talent of the entrepeneur... founders need to have an aura that resonates with new hires, key fund-raisers and other important people." —Jeff Levy of eHatchery LLC (December, Fast Company)

"There is a 5-step program for "managed growth": build customer loyalty, spend more efficiently on marketing, expand into higher margin products, manage capital more effectively, keep operating costs stable." —Kenny Kurtzman, CEO of Ashford.com (8/21/00 S.J. Mercury)

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