Innovations: The Neglected 97% – Entrepreneur Interview #1
Innovator, entrepreneur, CEO, founder…are you feeling neglected? Do you feel that you would be in the 3% if you could just crack the investor code? You can you know. We know you can. When you read this entrepreneur interview you’ll see why we know.
Venture Capitalists invest in about 1% of the companies they see. Angels only slightly more, about 3%. What about the neglected 97%? Many of these neglected have strong CEOs and teams. Many have spotted an unfilled need and found a way to fill it. Yet your efforts to raise capital (or another round of capital) are so far frustrated. You have a great deal at stake having invested a great deal of your time, resources and reputation. You also have a great deal to gain, as does the world. This blog post and the ones that follow address the frustration of this neglected 97 % possibly you.
These posts present interviews with participants in Entrepreneur’$ Bootcamp, a program with unexpected results. Entrepreneur’$ Bootcamp is a program now jointly offered by Intelliversity and George Kenney, the co-founder of venture capital firm Shepherd Ventures. Attendees are pleased as much by the unexpected results as they are by the intended results. As intended, Bootcamp certifies CEO’s and senior executives of innovative companies to launch and scale their companies. This certification makes these teams credible to professional investors. It’s the unexpected results that are revealed by this and following blog posts.
George and Shepherd Ventures have proven the value of Bootcamp through its track record in venture capital investing, having twelve of eighteen selections surviving, at least three times the average for VC firms. An additional twenty firms have attended Bootcamp since Shepherd Ventures completed allocating its first fund. 50% of this new group of companies are now funded and half of the rest on their way to funding. This is a truly outstanding record of success. This and the following posts provide you with interviews with many of these Bootcamp participants. While maintaining confidentiality, you’ll hear the details of the unexpected results they achieved as well as the expected results.
Interviewee #1 is a professional services company already in revenue at the level of $10M per year achieved over a decade. Yet it’s CEO and team is frustrated raising $3M to $5M to enable more rapid expansion using automation. Its business is facilitating relationships between buyers and sellers in a specific commercial field – a specialized B to B marketplace. I interviewed a senior executive of this company, brought in later in the life of the company, not one of the founders, but sharing the founder’s vision of expansion at an accelerated rate with new technology. Questions are in italics. Answers are paraphrased in normal type.
What’s opening up for you out of Bootcamp?
We came to Bootcamp envisioning accelerated growth to around $40M over five years. The process of Bootcamp highlighted a larger vision that was hiding in the shadows of the original vision. Through Bootcamp, we’ve now clarified this larger vision and can now project a $110M+ business over 5 years and accelerated growth beyond that.
What’s opening up for you personally?
One of the most important things a leader must realize is to separate working on the business vs in the business. A by-product of Bootcamp has been to work ON the business. Bootcamp gave us “permission” to take a step back and re-evaluate where we’re going and what’s important. And to help us maximize our personal opportunity for wealth by creating a whole new business. In other words, through Bootcamp, we began to create new value propositions that in effect are a separate business. It’s also given us a way to bolster through re-messaging and repositioning our existing business to improve it as well. It also allowed us to consider decisions around restructuring (product, financial model, sales model, management) to enable the new vision and expansion of the original business.
How has this possible repositioning affected you personally?
I have identified a level of confidence in the vision that I would not have otherwise had.
For investment purposes, this resulted in opening up an exciting new opportunity for me personally, to build upon my 25 years of experience, to fill a new need. Originally we had a concept for an idea that we had vetted. Before this, we were successful providing our clients a way to compress the supply chain — disintermediation. Through Bootcamp, we found a number of new revenue streams permitted by automation. We’re migrating away from being a slow-moving tugboat to a fast-moving speedboat. For example, we found that the data we generate through our activity is itself becoming valuable, in addition to the serving of individual clients.
What’s possible for you as a company from this repositioning?
The opportunity is actually much larger than the 0riginal pitch to investors shows, which had to be focussed and presented in an exciting and yet believable way.
What’s created is an opportunity to be on the forefront of a breaking frontier that no one else has been able to harness. By moving to the forefront of a breaking frontier, it became much easier to excite investors. The opportunity for funding opens up the new opportunity.
In terms of management, without funding we will now receive, we cannot attract the talent at the C-level and all levels to make it work. The opportunity arises for me to work side-by-side with other very smart people we bring on board. Also personally, a huge jump in my standing in the business community.
What’s become possible in terms of investment?
In terms of attracting investment, I have focus, framework, and structure for pitching effectively. In order to accelerate, we were willing to take on a mentor, respecting that mentor based on their track record. We earlier had a firm we paid $50K. At 1/5 the price, with Bootcamp, we got mentors who we respect and who provide real new information about pitching to investors and what kind of pitch would work. There’s no way we would have the deliverables coming out from the other firm that we get with Bootcamp. From Bootcamp, we get the actionable guidance for raising capital, guidance from investors who’ve been there on both sides of the table many times before and were successful.
On top of the guidance given, it’s hard work and most people would quit. The program encouraged and drove this hard work.
What was this process like?
We started out building a new presentation and messaging around our own innovations. What we did not do until several weeks into the program is to come back around to our roots. We’re now able to say what we always thought we wanted to say, but didn’t believe it would fly, didn’t believe we had the right to enunciate our full vision. We now know it’s ok to express the full vision. Before that, we wanted to be guarded and conservative, “painting the gray”. We thought we had to be more guarded and conservative than we really had to be. I’m willing now to really shake up world. Fear of offending some will remain a huge barrier unless we position the conservative mentality as an advantage.
$4M for growth is now possible!
Key Takeaway – An appalling 97% of innovations never get the funding, first, second or third round they need to get off the ground or to scale. If you are a CEO, Innovator, Inventor, Founder or Entrepreneur in that 97% you are bound to feel neglected by investors. In this series, we are committed to showing you how others have succeeded by getting the coaching they need from investors about investors. Entrepreneur$ Bootcamp, our coaching program, raises your likelihood of getting funded from 3 to 50%.
There is a true saying. You can’t coach yourself. You sure can’t coach yourself from the perspective of a mindset you don’t understand. That’s why as investors, we know what you need to know.
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