Stephan LittleCEO Managing Partner at Zero Limits Ventures
Bio

Founding partner at Zero Limits Ventures - an advisory, consulting, and venture investment firm specializing in: - Growth Capital and Funding - Valuation Growth Strategies - High-Return Mergers, Acquisitions & IPO I help top-shelf companies who are stymied by a lack of capital or expertise to dramatically reinvigorate growth and aggressively increase company valuation.



Recent Answers


Lots of good input here already. I concur with most of it. Make sure the NDA offers mutual protection and provides for a remedy that is reasonable. I would also suggest adding 'non-circumvention' language.


Wow, lots of questions here. Let me try to hit them in order:

"Should I get a job or find investors?"

IF you have access to enough investor capital (not debt and not your savings) and you can get to MVP and still maintain ownership of a sizable majority of the business then do it.

IF that means debt financing then only use the debt lines the cost of which can be carried by returns generated by the use of funds.

I would prefer to offer a convertible note to prospective investors that can be easily extended throughout both friends and family and seed rounds (up to $2M to $3M) to get to proof in the market.

If you can get to revenue and earnings fast enough then you can avoid equity dilution all together.

IF you cannot secure that find of funding AND you cannot produce enough revenue from your business to deliver sufficient earnings for you to live on, then by all means, you should find a way to make the money you need and not burn all your savings or mortgage your home

If that means short term contract work that's great. Particularly if you can find log term work that is relevant to the business you're building.

If that means taking a job then do that. IF you do that, then yes, be transparent with your employer and let them know you're working on your own business also.

Hope this helps....




YES! You certainly can sell a services business; and, if it is positioned and prepared properly, for pretty great returns too. There are a number of different exit strategies available to you, not ALL of them acquisition. For instance; we have helped service business owners transition (exit) from their business without selling the business, but instead by retaining a minority interest and receiving large (7 figure) royalty checks for years after their departure.

That said, IF acquisition is what you want each of the dozens of strategies available to you really begin with identifying prospective buyers, understanding their motivation for acquisition and pivoting your company into alignment with those motivations.

I explain the process in more detail here: http://www.zerolimitsventures.com/cadredc

Hope this helps! Good luck.

Steve


Keep in mind that investors invest for returns. Telling a prospective investor that you want his or her money to grow your business but don't plan on ever generating a liquidation event that pays him or her a dividend is not likely going to work; angel or not.

You may be better served with debt financing where returns are generated in the form of interest payments not equity value growth.

BUT, if equity financing is the plan, you're going to want to develop a strategic exit plan right from the start.

That means identifying prospective buyers, strategic channels etc and characterizing the value drivers for each right up front.

You'll find prospective buyers come in a number of forms; competitors, bigger versions of you, strategic partners, private equity, etc. Each will value your business in different amounts for for different reasons. Understanding this is vitally important for you to navigate to securing the right money, from the right sources, with the most favorable terms.

Once you've qualified and quantified each of them, then determine what (specifically) you're going to need to do to align your business with those prospective buyers generating the highest returns.

This will drive your business model and go to market strategy and define your 'use of funds' decisions. This in turn result in a better, more valuable business whether you exit or not.

Do it this way and you'll have no trouble raising money from multiple sources.

You can learn more about the advantage of starting with a Strategic Exit plan here: http://www.zerolimitsventures.com/cadredc

Good luck.

Steve


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