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SUCCEED BY FAILING (Ralph Keyes)
Gast plaatste een vraag in Columns en octrooiblogs
One would think that the most successful people in business were determined to succeed and not to fail. Not necessarily. In some ways it’s just the opposite: those who focus too hard on succeeding don’t do as well as those who can tolerate failure. In a rapidly changing economy you are likely to confront as much failure as success. You will then, of course, confront a natural fear of failure. This is perfectly normal, and not even a bad thing necessarily. Fear can motivate, and make one concentrate harder. It can even be stimulating. Those who found businesses seem to thrive on the anxiety they confront and the excitement it creates. Entrepreneurs are renowned for their excitement-craving temperaments. If anything, they prefer the dark clouds and thunderclaps of impending catastrophe to clear days of smoothly humming businesses. Research on entrepreneurial attitudes suggests that orderly settings cause these risk takers more pain than chaotic ones. "We have days when it's kind of smooth," the owner of a food manufacturing business told Inc.magazine, "but those are not my greatest days" The founder of a restaurant chain concurred. "My eyes light up when I hear of a crisis," he said. Ask any founder of a thriving business how things are going and you'll get an aggravated recounting of payrolls to be met, debt to be serviced, insurance to be bought, and the need to expand. Running the business is a million headaches. But ask that person what it was like to start an enterprise and watch his or her face light up. Getting a business off the ground is a heroic experience: one thrilling story after another of bill collectors pounding on the door, creditors whistling through the keyholes, and eating bologna sandwiches on the floor by candlelight because the furniture was repossessed and electricity turned off. Color comes to entrepreneurs’ faces as they recount such stories, and excitement rings in their voice. Today’s entrepreneurs would have been yesterday’s explorers, scouts, and warriors. The evolution of society has depended on their adventurous spirit. The best business-founders see their failures as footsteps on the path toward success. Silicon Valley entrepreneurs consider failures “rites of passage,” “learning experiences,” and “steps on the road to success.” It's a truism in Silicon Valley that a high tolerance for failure underlies this sector’s dynamism. There you are told repeatedly, “Failure is tolerated here.” A reluctance to try something new, they say, is worse than trying something new that fails. Among these business creators there’s almost a cult of failure, a cocky pride in their ability to take a hit and come back swinging. Microsoft’s Bill Gates was recently depicted in Fortune magazine as a risk-taker whose success has grown from the realization that “you have to try everything, because the real secret of innovation is to fail fast." There are sound management reasons for being more accepting of failure and less impressed by success. That is not an altogether modern insight. The attitudes of today's entrepreneurs differ little from those of yesterday's inventor-moguls: Thomas Edison, the Wright brothers, Henry Ford. Ford called failure “the opportunity to begin again, more intelligently.” He spoke from experience. Before the Ford Motor Company took, two previous ventures of his had crashed and burned. Like contemporary innovators, earlier pathbreakers saw much to be said for business setbacks. According to IBM’s Thomas Watson, Sr., "The fastest way to succeed is to double your failure rate." A study of 40 successful entrepreneurs found that most had run one or more businesses into the ground. Yet the vast majority said if their current venture collapsed, they would start another. Don't they ever learn, the more prudent among us wonder. Well, no. That's why entrepreneurs keep plugging. Getting knocked down. Trying again. On the floor. Back on their feet. Like wirewalkers, venture founders know that whoever gets on the wire may fall off. They just don't consider this sufficient reason to stay on the ground. -
informal investors
nah plaatste een vraag in Financiering
Ik kreeg van een collega in Amerika, de volgende tien redenen voor informal investors om zich te formeren in een groep in plaats van alleen te opereren. Het lijkt mij goed ook een idee te hebben hoe de andere kant denk over de investeringsrisico's. NUMBER ONE: SHARED RISK One is truly a lonely number. Individuals investing in a group environment allows for shared investment risk across multiple opportunities. This also leads to a later discussion topic, diversification. NUMBER TWO: LEVERAGED INVESTMENT Perhaps the most important reason to form a group is leverage. Pooling money makes possible investment deals graced with negotiation for better pricing and preferential treatment. NUMBER THREE: DIVERSIFICATION When the corpus of investment capital raised from among a group of angel investors is applied across a variety of deal types, diversification is achieved. This reduces risk as it increases the probability that not all of the deals may be affected the same way by market conditions or other factors. Conversely, one or another of the deals may suddenly sparkle as development efforts bear fruit given a changing set of market conditions. NUMBER FOUR: DEAL FLOW There is no real secret to getting in on good deals. They go where the money is. Areas of high capital concentration attract entrepreneurs who have business opportunities investors want to see. The pool of early stage money is a powerful attractant to capital hungry companies on the road pitching their opportunities to find "smart money". The smart money of angel investors sees deals often never seen except by angel groups that have the reputation for putting money into early stage companies. NUMBER FIVE: SIZE MATTERS Pooling of angel investment dollars builds a cache ready to handle the development of an early-stage deal through to exit. Whether the additional dollars go toward follow-on needs of the business or to assume the full financial burden of a new company, size matters in achieving investment success. NUMBER SIX: TAX INCENTIVES Take advantage of the government's tax policies in your angel career. Governments, including local, state, and federal, recognize the role of assisting new businesses through tax incentives rewarding angel investment if the right business entities are created. This may be an LLC or another vehicle structured to make the early-stage investments. The state has provided that qualified groups that invest in qualified companies can immediately receive 20% to 30% tax credits for state income tax. NUMBER SEVEN: SHARED EXPERTISE Pooling talent makes investigating, investing, and helping manage a portfolio of companies possible. Pooling experience helps provide the mentoring young managers need in a variety of situations. NUMBER EIGHT: GROUP SYNDICATION Attracting other investors to complete financing requirements is often made possible by having significant investment by a "local lead angel g roup". Angel groups often share or syndicate investment opportunities with other groups. This allows for investment group portfolio companies to complete financing rounds, as well as, exposing groups to additional deal flow. Syndication is a critical element in early stage financing. Angel groups typically have an investment threshold and need other groups to participate in company financing to be successful. This is an essential part of the exit strategy from a specific deal by the angel group and, subsequently, the payouts to individual angels from the profits of the group. NUMBER NINE: STRUCTURING THE EXIT Significant equity investment is required to leverage traditional financial and credit sources from local banks, finance companies, and other lenders. Getting the size of equity investment right and showing the next round of investors that more than one visionary angel believed in the deal set the stage for exit of the angels at the time the deal's market expansion requires venture capital. NUMBER TEN: CAPTIAL IS PRIMARY Start-up and early-stage companies have many needs but the greatest is early-stage, patient, high-risk capital. Many of the other needs, such as space, equipment loans, tax incentives, workforce training, and even temporary management support, can be subsidized through numerous community and economic development initiatives that are fairly uniformly available any where. But it is access to operating capital, usually available only through equity, that is the lifeblood of the pre-profit companies. This money makes it possible to meet the payrolls, market the products, and grow the company. Almost always, this money must come from angel investors who serve themselves while serving the company if they have organized into an angel investment group to take advantage of reasons one through nine above.