New Tip: A Foolproof Guide to Raising Capital for Startups

We tackled the question for startups as well as public companies. We discussed the nine tests that entrepreneurs must pass in order to get a big check from a venture capitalist. These tests are used by investors to decide two broad questions: Is the venture targeting a market that's now small but expected to get big fast? Is the entrepreneur a great CEO?

Operating in a market poised to explode with growth. If your startup is pursuing a market that's already big, it will face lots of other rivals. And that means the venture capital firms will be competing with other such firms that have already invested in the market, thereby raising startup valuations and reducing their expected investment profits.

Venture capitalists want to invest in a company targeting a market that's small now but that will become big fast because that means they and the startup are likely to face less rivalry at the beginning. Therefore, the startup will be valued less and the venture capitalist will be able to boost potential returns.

Startups can be proactive when seeking capital by learning to think like the venture capitalist will.

To test whether your company will appear to a venture capitalist as being in a market poised to explode with growth, obtain objective data to answer the following questions:

1. Does your startup deliver so much benefit to customers that many of them would be willing to pay you more than it costs to produce and deliver the product?

2. Will rapidly growing technologies (such as smartphones or virtual reality machines), business models or social changes (like retirement of many baby boomers) boost demand for your product?

3. Will potential customers take a risk on doing business with your startup because they have a significant unmet need that no other companies are solving?

4. Are leading companies (such as Google or Facebook) already working to solve the problem?

Assessing if the startup is led by a great CEO. If your startup is going after such a market, the venture capital firm wants to know that your company can operate well enough to take a big share. To pass that test, you must be able to devise a great product and attract and motivate industry-leading talent. In short, if you are the head of your company, you must be a great startup CEO. Here are some additional questions to answer in this regard:

5. Do you have a winning track record (such as having been the captain of a successful sports team or having sold a previous startup at a huge profit) and the passion to keep winning?

6. Can you identify and manage business risks like growth outstripping your team's capabilities or a competitor stealing your great product idea?

7. Are you smart and curious and do you learn by doing lots of inexpensive tests of your guesses about which strategies and tactics will solve your pressing business problems?

8. Do you know more about your industry than your rivals and can you articulate a compelling vision for its future?

9. Do you have charisma, integrity and the ability to attract, hire and motivate top people?

If you can answer yes to all these questions, you should have no trouble raising millions in capital.

Chances are good that you're scratching your head and wondering how you could possibly come up with the answers in a way that would not come off as empty bragging. If you're in that camp, get out and talk to people who know the market and who have worked with you. 

Talk to customers and industry experts about your product idea. If customers think your product is a must-have-now item and industry experts are nervous about the potential competition, then you are on the right track.

And to settle the question of whether you're a great CEO, ask your colleagues if they consider you to be one and can provide compelling examples of positive answers to the last five questions.

My students were particularly daunted by the five tests of being a great startup CEO. I reassured them that the most important of these tests is the ability to hire and motivate an A team. If a startup CEO can do that, he or she can hire others who can excel in the other four areas.

My students are humble but I hope by the end of the semester to have helped them see that they can flap their wings and fly out of the nest to achieve startup success.

New: Three Design Tips for Creating Signs That Attract Customers

In this tech-centric, high-paced world, we’re often talking about advertising and marketing online and over mobile. But when it comes to really grabbing people’s attention, sometimes a good, old-fashioned sign can be your best bet. More than half of small-business owners find in-store signage and graphics effective in attracting customers, according to the results of a nationwide survey commissioned by FedEx Office.

To get the most out of your signage, Budev believes there are three important design principles all business owners need to keep in mind when designing banners, posters and other signage.

1. Compelling color. The choice of color plays a huge part in a well-designed sign. Think of “Coke red” or “McDonald’s yellow.” Often, color can help convey a brand’s identity.

“Studies have shown that 80 percent of the recognition of a trademark is due to its color,” Budev says.  

Another important consideration: trendy colors. Some business owners may feel compelled to convey their personality via signs that use current, modern colors. But “care should be taken to consider longevity when designing static signage,” Budev warns. “Today’s color of the year could be tomorrow’s eyesore.”

2. Contrast for readability. A sign’s contrast will usually determine its readability. Contrast, therefore, is a huge factor for any engaging sign.

“Most signs will include either text or graphics in the foreground, with a continuous background color,” Budev explains. “The contrast between these two items is critical to the viewer’s retention of the content.”

For example, you might consider a dark color on a very light background, or the opposite of that -- black on white or white on blue. Pairing similar colors can decrease a sign’s readability.

“However, a weak color contrast can be strengthened with an outline or drop shadow around the foreground lettering,” Budev says. “Adding a border around the text or graphic also increases reading speed

3. Yes, size matters. Simply put, the larger the letter, the easier it is to read. This is especially important if you’re creating roadside signage or signs that will be displayed at a significant distance -- at a conference, for instance.

“A good rule of thumb might be 10 feet per inch of letter height,” Budev says. “So lettering with 10 inches of height may have the best impact at 100 feet distance.”

Different typefaces also affect legibility, Budev says. While you may want a flowery script to convey a certain style, it may be difficult for people to read it over greater viewing distances.

New Tip: How To Give Your Business A Name

Seems its a day to focus on startups and potential entrepreneurs, our last article was on risks to consider when launching a startup, if you missed it click here.

...to this article's topic

What's in a name? A lot, when it comes to small-business success. The right name can make your company the talk of the town. The wrong one can doom it to obscurity and failure. Ideally, your name should convey the expertise, value and uniqueness of the product or service you have developed.

Some experts believe that the best names are abstract, a blank slate upon which to create an image. Others think that names should be informative so customers know immediately what your business is. Some believe that coined names (that come from made-up words) are more memorable than names that use real words. Others think they're forgettable.

In reality, any name can be effective if it's backed by the appropriate marketing strategy. Here's what you'll need to consider in order to give your small business the most appropriate and effective name.

Enlist Expert Help to Start

Coming up with a good business name can be a complicated process. You might consider consulting an expert, especially if you're in a field in which your company name may influence the success of your business. Naming firms have elaborate systems for creating new names and they know their way around the trademark laws. They can advise you against bad name choices and explain why others are good.

The downside is cost. A professional naming firm may charge as much as $80,000 to develop a name. That generally includes other identity work and graphic design as part of the package, according to Laurel Sutton, a principal with Catchword Brand Name Development. Naming services that charge as little as $50 do exist, but spending a reasonable amount of money early for quality expert advice can save you money in the long term.

What's in a Name?

Start by deciding what you want your name to communicate. It should reinforce the key elements of your business. Your work in developing a niche and a mission statement will help you pinpoint the elements you want to emphasize in your name.

The more your name communicates to consumers about your business, the less effort you must exert to explain it. According to naming experts, entrepreneurs should give priority to real words or combinations of words over fabricated words. People prefer words they can relate to and understand. That's why professional namers universally condemn strings of numbers or initials as a bad choice.

On the other hand, it is possible for a name to be too meaningful. Common pitfalls are geographic or generic names. A hypothetical example is "San Pablo Disk Drives." What if the company wants to expand beyond the city of San Pablo, California? What meaning will that name have for consumers in Chicago or Pittsburgh? And what if the company diversifies beyond disk drives into software or computer instruction manuals?

How can a name be both meaningful and broad? Descriptive names tell something concrete about a business -- what it does, where it's located and so on. Suggestive names are more abstract. They focus on what the business is about.

Consider "Italiatour," a name that was developed by one naming company to help promote package tours to Italy. Though it's not a real word, the name is meaningful and customers can recognize immediately what's being offered. Even better, "Italiatour" evokes the excitement of foreign travel.

When choosing a business name, keep the following tips in mind:

• Choose a name that appeals not only to you but also to the kind of customers you are trying to attract.
• Choose a comforting or familiar name that conjures up pleasant memories so customers respond to your business on an emotional level.
• Don't pick a name that is long or confusing.
• Stay away from cute puns that only you understand.
• Don't use the word “Inc.” after your name unless your company is actually incorporated.

Get Creative

At a time when almost every existing word in the language has been trademarked, the option of coining a name is becoming more popular. Some examples are Acura and Compaq, which were developed by naming firm NameLab.

Coined names can be more meaningful than existing words, says NameLab president Michael Barr. For example, "Acura" has no dictionary definition but the word suggests precision engineering, just as the company intended. NameLab's team created the name Acura from "Acu," a word segment that means "precise" in many languages. By working with meaningful word segments (what linguists call morphemes) like "Acu," Barr says the company produces new words that are both meaningful and unique.

Barr admits, however, that made-up words aren't the right solution for every situation. New words are complex and may create a perception that the product, service or company is complex, which may not be true. Plus, naming beginners might find this sort of coining beyond their capabilities.

An easier solution is to use new forms or spellings of existing words. For instance, NameLab created the name Compaq when a new computer company came to them touting its new portable computer. The team thought about the word "compact" and came up with Compaq, which they believed would be less generic and more noticeable.

Test Your Name

After you've narrowed the field to four or five names that are memorable and expressive, you are ready to do a trademark search. Not every business name needs to be trademarked, as long as your state government gives you the go-ahead and you aren't infringing on anyone else's trade name. But you should consider hiring a trademark attorney or at least a trademark search firm before to make sure your new name doesn't infringe on another business's trademark.

To illustrate the risk you run if you step on an existing trademark, consider this: You own a new manufacturing business that is about to ship its first orders when an obscure company in Ogunquit, Maine, considers the name of your business an infringement on their trademark. It engages you in a legal battle that bankrupts your business. This could have been avoided if sought out expert help. The extra money you spend now could save you countless hassles and expenses further down the road.

Final Analysis

If you're lucky, you'll end up with three to five names that pass all your tests. Now, how do you make your final decision?

Recall all your initial criteria. Which name best fits your objectives? Which name most accurately describes the company you have in mind?

Some entrepreneurs arrive at a final decision by going with their gut or by doing consumer research or testing with focus groups to see how the names are perceived. You can doodle an idea of what each name will look like on a sign or on business stationery. Read each name aloud, paying attention to the way it sounds if you foresee radio advertising or telemarketing in your future. Use any or all of these criteria.

Keep in mind that professional naming firms devote anywhere from six weeks to six months to the naming process. You probably won't have that much time, but plan to spend at least a few weeks on selecting a name.

Once your decision is made, start building your enthusiasm for the new name immediately. Your name is your first step toward building a strong company identity, one that should last as long as you're in business.

New: Consider These Risks When Launching Your Startup

Starting a business has never been more exciting. The startup economy is rich with opportunity, innovation and potential. But at the same time, it is also fraught with high-stakes risks. And while it may be scary to take that leap of faith, jumping into the deep end of the startup pool is significantly less intimidating once you understand and assess these risks.

In my experience as a serial entrepreneur (having sold one company and taking another public), I have found there are five key risks in starting any business. Fortunately, if you are able to identify these risks early on and determine how to approach them, you will up your chance for success.

1. Product risk. Decide what you are selling. It seems like an easy thing to determine -- especially for an entrepreneur. But the ability to explain what your product is, the problem(s) it solves, and why it’s worth investing in is much harder than it seems -- and it must be your top priority when starting a business. If you can’t do that, you can’t expect people to pay attention, let alone part with their investment dollars.

This is a controllable risk: You need to ensure the product addresses a big enough market, and the right opportunity within that market, at the right time. It is imperative to do the research, know the landscape, and be able to clearly articulate how your business fits within the context of this landscape.

2. Market risk. Knowing your customer and why, how and where they buy related products is arguably the most important risk factor to assess before launching your product. Research this thoroughly. Identifying these routes to market, and whether you can build them effectively, in a timely fashion and within your budget, could easily determine the success of your business. If the market risk falls in your favor and you get into your market early enough, there’s no reason why your business can’t succeed.

3. Financial risk. First-time entrepreneurs are fortunate to have tools such as Kickstarter and Indiegogo that enable crowdfunding to get money in the bank. In addition, friends and family, angel investors and traditional VCs are all fertile sources of this necessary life blood.

Make sure to identify key business milestones and schedules that clearly identify the points in time when equity or debt investments are necessary to reach the next major milestone. If you can articulate your business plan, growth path and reach each milestone successfully, this builds the confidence in your potential investors to write the next check.

. Team risk. There is no way that one person can vanquish every risk.  That’s why it’s important to have a great team and a personal sounding board -- a mentor, confidante or even a startup incubator to help prepare for each challenge. Your team is also great for bouncing around ideas to build a product, bring it to market and maintain successful growth.

Think through your role as an entrepreneur and allow the team to do what it does best. Invest in people who believe in your product and instill a sense of confidence that they can help get your company across the finish line.

5. Execution risk. Many entrepreneurs can become so mired in the details that they completely lose sight of the overall company trajectory and strategy. Alternatively, some company founders remain at a high level and overlook crucial details that result in major problems. What I discovered early on is that a dichotomous approach of assessing the details, at least in the early stages, while maintaining a keen focus on overall business execution, will ensure the highest likelihood of long-term success in building a great company It is essential to strike a balance between being the micro-manager and the 30,000-foot-view strategist.

Some risks you can control, and others you can’t. To be a successful entrepreneur, you need to take counsel from others on how to mitigate risks. But never allow one person to have 100 percent influence in the decision-making process. Participate, evaluate the risks and don’t be afraid to pivot. 

New: A Simple Trick For Making Your Resume Stand Out

n these challenging times, so many resumes come in for a single job opening that companies have trouble finding the best candidate. Also, interested applicants have difficulty getting their resume in front of someone that will invite them to an interview. A successful resume is one that gets you through the door, generating a job interview for you. Once you are in the building, you take your best shot at winning that job.

Employers are looking for the BEST FIT. They have a problem and they need to solve it quickly. They will only take a few seconds to look at your resume and they will quickly determine if you're worth their time to talk to.

From experience, these are the most common problems with the resume:

• CAREER OBJECTIVE - People like to announce their career objective and aspirations on the top of their resume. We have been led to believe that this shows you to be a highly motivated and ambitious individual. This is a mistake. The decision maker is wasting valuable seconds reading about your career objective and may move on to the next resume. No one cares about your career objective. Nobody cares. NOBODY. The decision maker has a problem and they want the answer to just one simple question, "CAN YOU HELP ME SOLVE IT?"
• EMPLOYMENT HISTORY - The recruiter or the decision maker will quickly glance over the job descriptions of your previous jobs, looking for commonalities, similar skills or experience that match the job opening that you're applying for. If your job description doesn't clearly show that, it's over. You're done.

Here is a quick and easy way to correct it, improving your chances of getting a phone call:

• Replace Career Objective with QUALIFICATIONS - The recruiter or decision maker is looking for someone that closely matches the job opening so make it easy for them by listing all of skills and experience at the very top of your resume. If they want to read the rest of your resume, they can, but they don't have to. You told them everything they needed to know. You gave them what they were looking for. If the position requires a certain level of experience in a particular skill (ex: 5 years of customer service experience), add up all of your years of customer service experience from every job you've had and list it in bullet points. If a college degree is required, list it here. If you think a particular skill is helpful (ex: fluent in Cantonese), list it here.

For example:

Qualifications:

• Bachelor's degree
• 7 years of customer service experience
• 3 years of outside sales experience
• Fluent in Spanish
• 6 years of healthcare experience, etc...

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New Tip: Eight Compulsory Features of a Successful Blog Post

When it comes to marketing online, you’ve probably already heard that “content marketing” is one of the best ways to spread the world about your site and position yourself as an industry expert. But content marketing is not the same as churning out blog posts day after day. 

There’s more to a great blog post than just words on a screen. What follows is my list of essential ingredients for a successful blog post. If you’ve been focusing on just publishing words each day, step back, consider this list, and find out how your blog might improve. 

1. The article needs a point 
I’m surprised at how many blog articles have nothing to say. Well, maybe they have plenty of things to say, but they don’t have a point. An article is supposed to communicate a point.

When your article has a point, it gives readers something memorable to latch onto. They are more compelled to share it, comment on it, and engage with it. An article with a point is an article that accomplishes a mission and is therefore successful. 

There’s another benefit to having a point: Using specific keywords. As part of a content marketing effort, you probably went through the exercise of planning the keywords to target, and creating content that would advance those keywords. Now, you can implement those keywords by writing an article with a succinct point.

2. Images
You won’t see an article on my blog without an image. It just doesn’t happen. I know that content is the most important thing for search engines and crawlers, but I’m not writing great stuff so crawlers can read it. I’m writing content so you can read it. And I know that you want pictures.

Your goal isn’t just to add eye candy, though that’s probably a good thing. Your goal is to add strategic images that help your readers, and enhance your content.
3. Structure
This is one of the most-overlooked aspects of an article. In order to communicate a concept, you need to organize your thoughts. Otherwise, you’re going to have a scattered assembly of sentences and statements. That accomplishes nothing.

When you have a structure, it will be reflected in the layout of the article. An article will have headings, subheadings, paragraph breaks, and maybe a bullet point or two. All of these features provide flow for the reader, and make it easy to skim and digest content.

Here’s the model you should follow:

• Introduction: Set the stage for your discussion.
• Make your point. Explain it. 
• Make your next point. Explain it. 
• Do this for as many points as you have.
• Conclusion: Wrap up the article with a call to action. 

That’s the general idea. However, it needs some specificity depending on the type of article you’re creating. In my Advanced Guide to Content Marketing, I discuss 12 structures to help you have an organized approach to virtually any type of content.
4. Unique content
First, you need to have something unique to say, from a thematic perspective. In other words, you don’t simply want to make the same point that everyone else is making. You need to have a unique angle, approach, or spin. 

Second, you need unique content. You hopefully wouldn’t copy and paste content from another site onto your own. But you may be tempted to do a link roundup or “best of the web,” in which you curate a list of articles that you’ve found to be interesting. 

I think this is a fine idea, and it can certainly help you to establish thought leadership and gain readership. However, because of the risk of duplicate content, I’d suggest doing this infrequently. Unique content is more likely to be linked and shared. People are going to go to your content because it’s one of a kind.

5. Substantial length
Ah, the perennial question: How long should my blog post be? 

The short and easy answer is, as long as it takes to say what you need to say. But -- and this is a significant “but” -- longer is better. 

My research, experience, and data all point to long-form content performing better in social sharing, search indexing, organic traffic, and conversions. If you’re regularly creating content that is in the 1,000- to 1,500-word range, you’re doing well. If most of your articles are about 200 to 300 words then you could probably beef up a bit.
6. Internal linking
An internal linking strategy -- for which you link to other, related posts within your own site -- and can serve to enhance and deepen the overall value of a website. It isn’t complicated. Here are the basic points:

• Create enough content throughout the site. You’re going to need stuff to link to.
• Create text links with diluted anchors. No optimized anchors allowed. In other words, the text of the links (the part people click on) shouldn’t contain keywords.  
• Link internally to “deep pages.” The deeper the link is within your site, the better. A good example of this is linking to pages that are not your home page, or any other major page on your website.
• Use links that the reader will be interested in. You want them to engage with your content and site.
• Link to relevant data on your site. Topical relevance between the pages will bolster the authority of both pages. 
• Use enough internal links to make it worthwhile. I’d suggest anywhere from 3 to 10 internal links per post.

7.  Attention to proper spelling and grammar
When I first drafted this article, I wrote this point as “Make your article grammatically impeccable.” And then I changed it. It needs to be proofread and copyedited...at least.

Let me share a thought or two about mistakes. To err is human. Mistakes happen. Now and then, a typo will slip through. Work to avoid it, but be prepared to accept it. Being human has its drawbacks. 

Here’s a helpful approach to proofreading and copyediting your articles: 

• Just write the article. Don’t nitpick, parse, check thesaurus, or fix your spelling. Simply put the content on the page -- structured, organized, but not proofed. 
• Wait a few hours. A day is even better. You’ll be able to look at it with fresh eyes when you go in for the copyedit phase. 
• Copyedit the article. Here’s where you give the article a renovation. You may change entire paragraphs, elide sections, alter wording, and adjust your approach. Your goal is to make the copy read well. 
• Proofread the article. Examine every comma, apostrophe, capital letter, and spelling issue. This is where you make sure your article will pass muster in a college-level composition course. When you’re done, proofread it again.
• 8. A call to action 
  The call to action is the magic ingredient that makes a blog post worth it all. You have all this wonderful long content with an amazing point, a beautiful structure, internal links, great images, and flawless style and grammar. Now what? 
  Every post needs a call to action. The reader is ready to respond, to do, to click, to engage. What do you want them to do? Whether it’s capturing an email address, visiting another page, purchasing a product, or downloading an ebook, you need to have an explicit call to action for each article, every time.
  Call to actions are the key to bringing in more conversions. Truly effective calls to action begin and end with strong, compelling copy. 
  So, write your copy, but don’t stop there. Write your call to action as well.
  I could have ended this list by telling you “Write a conclusion.” Of course you need a conclusion. Any article needs to have a clear ending. But somewhere in that ending needs to be an appeal -- the reader should be invited to take the next step or do the next logical thing. 
  If you scroll to the end of this post, you’ll see an example of my call to action. It’s at the end of every article.
  Conclusion: Churning out content on a blog is not the path to success. Carefully consider your strategy in light of these eight points. If you have an approach that follows this methodology, then you’ll start to see significantly higher success rates with your content marketing
  
  
  so what other must-have blog tips would you suggest?