Do Entrepreneurs Need Work-Life Balance?

Entrepreneurs always talk about the work-life balance, and how to achieve it. As a woman, I have so much respect for those women out there who are successful mothers and entrepreneurs. I mean, being in a happy and healthy marriage is difficult enough. Couple that with raising children and running business? That seems nearly impossible to me. Perhaps that’s why so many women I know choose one over the other.

What We Sacrifice

To build a company from the ground up requires tremendous focus, drive and commitment. For me, it took precedence over the mundane things in life – like coming home early enough to make dinner for my husband, or being “present” while my blackberry was buzzing away with important emails (that of course I had to check immediately!). For the last few years, my business came before my personal life. When we went on vacation, I spent half the time on my laptop and phone, and the other half wondering what I could be accomplishing if I was working. When I made plans with family or friends,  I often bailed last minute because I was either working or too exhausted. When I spent time with my husband, it was usually because I connived him into coming with me to some networking or social event. And starting a family? Unquestionable until I accomplished X, Y and Z.

The irony is, before we got married, my husband and I constantly argued about having kids. I wanted kids right away, while he wanted to wait a few years. Boy, did we argue about it. But as soon as we got married and started our company, the tables suddenly turned. In fact, if my husband ever brought it up, I’d remind him of all the things we need to still accomplish beforehand. Eventually we stopped talking about it. My husband knew that growing the business and building my real estate portfolio were more important to me than anything else.

The Rude Awakening

Keys to Successful Venture Capital Investing: Due Diligence

 What are the Basic Items to Look for in a Business Proposition?

There are six critical components to look for in this first stage of evaluation.

1. The Numbers Should Be Properly Presented

Everybody in the investment business lives and dies by “the numbers.” This means that the investor cannot proceed without accurate figures on a company’s past performance. Anything less than accurate and detailed (and in most cases, certified financial statements) will lead the investor into a business risk that is probably not worth the business opportunity. To repeat—no investor should make an investment without accurate historical figures.

In addition, current financial statements are an absolute must. All too often, investors are given financial statements that are ancient history. The older numbers do not reflect how the company is doing at that current moment. You should not accept any statements older than two months. Make sure the entrepreneur gives you current (either monthly or quarterly) interim financial statements, or don’t invest. Any entrepreneur who sends you poorly prepared or stale financial statements does not deserve financing.

Another thing to look for is the entrepreneur’s knowledge of the financials. You must make sure that your entrepreneur is able to explain the numbers in detail. If that cannot be done, it is a sure sign that the entrepreneur does not live and die by the numbers and, therefore, will be a poor match for you. As an investor, you must live and die by the numbers.

If an entrepreneur cannot produce accurate financial projections, he or she should hire an accountant to prepare them. However, even if hiring an accountant, the entrepreneur should still know most of the numbers by memory if he or she intends to live and die by the numbers. If you ask the entrepreneur about the financials and the answer is, “These financials were put together by my accountant and I cannot tell you why certain projections do certain things,” the small business person does not understand the numbers. This is a clear sign that you will have problems in the future unless a new member of the team is brought in to handle that side of the business.

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6 Secrets to a Successful Start-up

How do you know if your company will succeed? Venture capitalists give their perspectives on traits that define the best start-ups.

It's every entrepreneur's most pressing question: Is this company going to make it?

All companies need to have the basics: a solid business model, a viable market, and a brilliant product or service. But the most important-- and unpredictable-- indicator of success is the entrepreneur. Do you have what it takes?

Despite the popularity of 25-year-old Internet entrepreneurs, there’s no one template that guarantees greatness, says Rory O’Driscoll, a managing director with San Francisco-based Scale Venture Partners. "I've seen a 25-year-old serial entrepreneur run great a company and I’ve seen a 45-year-old with no entrepreneurial experience also run a great company," he says. "But there are certainly commonalities between those whose companies are successful."

Here, O’Driscoll and some of his colleagues in the venture capital world share their perspectives on the less tangible elements of start-up success.

1. Be flexible. Always. This encompasses both flexibility in your business goals and personal flexibility, which some entrepreneurs find harder to achieve. Could your company pivot easily if necessary? Could you adjust to new circumstances? More importantly, are you willing to alter your personal start-up dream if it doesn't match reality?

"Most business ideas fail,” says Bryan Roberts, a partner in the Palo Alto-based venture capital firm Venrock. "The successful companies are the ones that can take that initial idea and morph it one, two, or three times into a better version."

Understanding venture capitalists

Here are five simple tenets to consider.

1.    Be Okay with No.

Insiders call it the elegant turndown. When a VC can decline a deal and end the meeting with the entrepreneur still feeling good, the elegant turndown has been achieved. The VC will rarely want to go through the lengthy process of educating the entrepreneur on why the deal doesn’t work for them. As a result, they often say things like “Our allocation for your sector is complete”, “Call me when you reach $X level of sales” or “Call me when you find a lead investor”. The real reason is rarely revealed because it will only lead to an argument and simply wastes time. Just move on.

2.    Understand their focus and that they can help you.

Most VCs have a specific target investee of a particular sector or stage of growth. Don’t pitch them if you don’t fit their investment criteria which is usually detailed on their website. Also, don’t think that you can convince them to invest outside of their criteria. The VCs are investing money that was entrusted to them by institutions and pension funds based on a funding model which restricts their investment activity. So if they fund IT, don’t bother pitching your medical device. The right VC for you is well experienced and connected in your sector. The right VC will work on your business with you. Don’t target just the cash, target cash that comes from hands that can help move the company forward.

3.    Understand their fund cycle.

The age of their fund is also critically important. Take a look through their new releases. When did they launch their fund? If it was more than six years ago, that fund is not relevant to you. Venture funds typically operate on a 10 year term. VCs generally target exits of four to seven years post investment. A fund that is now more than six years old is no longer doing new deals. At most, they will do follow-on rounds in their current portfolio companies. At this time however the VC will likely be trying to raise the next fund. If this is the case, they will start forming a watch-list of companies for the next fund which could open as early as year seven or eight of the previous fund.

4.    Understand their workload.

Why Big Questions And Bad Decisions Make Better Entrepreneurs

“Good decisions come from experience, and experience comes from bad decisions.”

This quote from an unknown author might be the most apt description of my life as an entrepreneur. Some decisions will change your life, but only if you ask the right questions.

In 2007 I was faced with one of those decisions — what to do with my life. I was finishing my masters degree in Management of Innovation and Business Development at Copenhagen Business School. The economy was bullish, industry was growing and graduates were in high demand. Like many of my peers, I got a steady influx of news about recruiting events and even a few interview requests too. At the same time, there was my study-mate Gus.

Gus and I spent many nights enthusiastically discussing different startup ideas, which always lead me to the same perplexing question: “should I get a job, or should I start a company?”

I sought advice from friends and family, but informing my decision became a public opinion poll that made my head spin. The problem was, depending on who I asked, I would get a different answer. When I talked to my mom the answer was (obviously): “take the job, Kasper,” while some of my college friends would urge me to follow the startup dream.


One night I was sitting alone in my kitchen. A friend’s girlfriend had sublet me her apartment. She had for some inexplicable reason chosen to paint her kitchen walls a bright shade of pink. So, there I was, surrounded by this rosy hue and completely consumed by that nagging question: “what should I do with my life?”

Smart Grid VC Funding shows signs of life

After remaining flat in the past four quarters, VC investments in Q3 2012 saw a significant uptick. Smart grid venture capital (VC) funding showed some signs of life in Q3 2012 with $238 million in 12 deals. The rise in funding was mostly due to $136 million raised by Alarm.com, a security and home automation company.

VC funding in the last three quarters had been relatively weak (Q4 2011 - $66M in 10 deals, Q1 2012 – $62M in 10 deals, Q2 2012 - $66M in 9 deals), whereas VC funding even without the Alarm.com transaction exceeded $100 million this quarter.

“The Alarm.com funding deal and the acquisition of Vivint for $2.2 billion by Blackstone Group is part of a growing trend where home security companies have expanded into home automation,” said Raj Prabhu, Managing Partner at Mercom Capital Group.

We expect to see more transactions in this niche where security, cable and telecom companies expand their offerings to cover the whole ‘connected or digital’ home services which would include everything from communication and automation services to solar installations.”
 
• Q2 2010 - (Landis+Gyr $165M; OpenPeak $52M)
• Q3 2010 - (Trilliant $106M; Nexant $43M)
• Q4 2010 - (OPower - $50M; AlertMe $24M; Ice Energy $24M; Tendril $23M)
• Q3 2011 - (Six deals out of 10 in Q3 were for $10 million or more)
• Q3 2012 – (Alarm.com $136M; GridPoint $23.3M)
 

Apart from Vivint and Alarm.com, other companies in the home security and home automation business include AlertMe, Intamax Systems, Control4, iControl Networks, Home Automation Inc., APX Alarm and Xanboo among others.
 
Source: Mercom Capital Group, llc, Oct 2012

France's search for its Small Business Act

"A shock of confidence" is what the report on the competitiveness of 65 pages cites. Louis Gallois,  Commissioner General for Investment, is turning in his report today Monday 5 November to Jean-Marc Ayrault, France's Socialist Prime Minister.  

Among the measures advocated by Louis Gallois, a 30 billion euro payroll tax cut and 20 other measures on competitiveness beyond costs. These should be announced by the Government on Tuesday. Mr. Gallois wants to go fast and defends the idea that employers and unions need to be involved in the recovery.

The report provides an overview of the state of the industry and the economy as a  French government source considers "extremely worrying". Three figures illustrate the "stalled" French economy in "the decline in the share of industry in value added, from 18% in 2000 to 12.5% ​​in 2011, the market share of French exports decreased from 12.7 % in 2000 to 9.3% in 2011 and the balance of trade excluding energy, that swung 100% to negative numbers, from +25 billion euros in 2002 to -25 billion in 2012. "As defended for several months by the Medef, the country's Business Council regrouping all major companies, the 30 billion euros of tax cuts relate to both payroll taxes (up to 10 billion) and employer taxes (up to 20 billion). All wages up to 3.5 times the minimum wage would benefit from the reduction in contributions, which would be offset by an increase in CSG, VAT and other environmental taxes.

Sensitive to the stability of companies, the report suggests, as the economic newspaper Les Echos revealed Monday that the Government needs to commit "not to change five key investment incentives" during its 5-year term: the R&D investment tax credit, the Dutreil tax break on the ownership and sale of businesses, the territorial economic contribution, and tax incentives for start-ups and for investment in SMEs. 
"SMALL BUSINESS ACT" 
Mr. Gallois' report also proposes to "condition State support to large corporations only if it is associated  with their ability to involve their suppliers and subcontractors." It recommends resuming research on shale gas and identifies three priorities for the General Commission for Investment: technology, health and life sciences, and cleantech for the transition to green energy.  

The report proposes to align the conditions of export credits and guarantees to "the highest level" found at our competitors. It also espouses the idea of creating a US-style Small Business Act for French SMEs. He also hoped that the taxation of life insurance contracts is in favor of those invested in equities.He also recommends that employees' representative are involved, "with a vote" on the boards of companies with more than 5000 employees. He proposes to double the number of work-study programs and to implement a continuing education program "attached to the person" and not to their company.

Translated to English from an article in Le Monde newspaper.