Have you ever wondered why some startups are able to land funding while so many others struggle to do so? What is it about those startups that were able to attract not only the attention of venture capitalists, but also make them rip out their checkbooks and fall over themselves signing them? Is it a great business plan? An ace team of business types and star programmers? Sheer luck?
Or do you find yourself pondering over what goes on in the heads of those venture money types? After all, you have an excellent product in the works that is sure to take over the world! Surely they see the genius of it all? So you find yourself asking, “But why aren’t they investing in me“?
If these are the kinds of questions you have, the book “Start-Up Guide for the Technopreneur, + Website: Financial Planning, Decision Making and Negotiating from Incubation to Exit” is likely to be of help. Written by David Shelters, managing director of Bangkok, Thailand-based investment banking and financial advisory firm Karon Business Consulting, the book should be an eye-opener for aspiring and new technology entrepreneurs and can help you navigate the dangerous waters known as venture capital. Even better, Shelters has over fifteen years of entrepreneurial experience as a founder, co-founder as well as an advisor to numerous United States-based and Asia-based startups.
According to Shelters, the challenge for many entrepreneurs is that they are not familiar enough with issues of finance to recognize what questions they need to ask and answer in order to learn. “Too many times I have witnessed start-ups with very promising and innovative products fall victim to financial starvation,” says Shelters. “Other times venture capitalists impose such suffocating control to impede the innovative energies and development efforts of the founding partners, resulting in either underachievement or eventual failure of the venture.”
Some of the blame, at least it reads so from the start of the book, can be attributed to the unrealistic expectations of startup founders – that venture backers should value passion as much as they do. Not so.
“Prospective investors are not looking for an opportunity to financially support someone’s hobby,” Shelters cautions. “It is good and advisable that investors recognize that you have a passion for what you are doing. However, when interacting with prospective investors or current business partners, it is important to project your entrepreneurial venture as, first and foremost, an attractive business opportunity.”
The rest of”Start-Up Guide for the Technopreneur” then runs the entire gamut of issues that entrepreneurs may face in funding, from incubation and progressive stages of development to a possible financially profitable exit. Th book explores the various fund-raising stages that a startup is likely to go through, and covers various financial models such as private equity, debt funding, public funding, incubation or accelerator programs that may all seem a little overwhelming to the new technopreneur (but which is all-so-important). There’s an entire chapter devoted to crafting a business plan, another on creating a financial plan, as well as one on tactics when negotiating with prospective financiers.
If you’re a startup founder that needs to understand and work out the financial aspects for your company, “Start-Up Guide for the Technopreneur” is a must-read.