by Christine Comaford-Lynch
illustration by Barbara Hranilovich
Entrepreneurs looking to get a business up and running should make sure they’re not enacting one of these scenarios.
Securing financing for your business means taking risks and making mistakes. Growth strategies are often fraught with mistakes and misfires. So what are some of the most common strategic errors I’ve seen fellow entrepreneurs make during my career as a serial entrepreneur, former venture capitalist, and angel investor? Well, you may simply be the wrong executive to pitch a start-up. You may have approached the wrong financing source. Or your timing might be wrong to sell via a mass retailer.
Here is my take on how to identify and turn a bad situation around—I’ve seen the following three real-life scenarios repeated way too many times. (I’ve changed the names of the entrepreneurs in the examples.)
1. Wrong executive to pitch a start-up.
Phil wants to finance and launch a media company. His business plan is top-notch, and Phil is a great guy, but he’s been fund-raising for 18 months. He’s only trying to raise $300,000 from angel investors, and he knows a lot of them. He hasn’t brought home a paycheck in two years, and tension is high in his household. Phil has had a spectacular career starting little companies within big companies. He has solid recruiting and leadership skills, designs compelling products and events that customers want, and can sell management on giving him the budget he needs.
What’s broken: I’ve sat in on a few of his financing pitches, and he just isn’t selling his vision when it’s to a room full of strangers. He feels uncomfortable, and this appears as a lack of confidence, lack of commitment, lack of passion. The result? No one’s buying.
How to fix it: Enough is enough! We’ve learned a great lesson: Phil can sell his ideas to management, but he can’t sell himself as CEO and executor of his vision to strangers. Now is not the time for Phil to be an entrepreneur. Instead he should become an intrapreneur by starting his new company within a larger company. He has a proven track record there, and several large media companies have been trying to recruit him. Maybe he’ll be ready to lead a start-up later—but now isn’t the time.
