Business Partners and Investors: Check those references

1951 Buick

1951 Buick (Photo credit: Hugo90)

I started my working life in the car business.  I quickly came to the conclusion that people spend more time researching the purchase of a television than a car.  In other words, people buy cars on emotion and looks. 

When engaging with business partners do not connect based on first impressions.  In my last company after a failed situation, we were fond of asking each other the definition of “assume” (ass-u-me).  We assumed many facts that had we checked first, we would have gone a different direction.  

Here are a few ideas for how to check out various business partners before hooking up:

  • If you are thinking about merging with another business, try co-locating before actually combining the companies, especially now when space is easy to come by.  There is nothing like pulling an 18 hour day with someone to determine your compatibility.  It is much easier to unwind a shared location than a legal entity
  • When choosing a VC or investor, check their references, both successful and not.  Mark Suster wrote a blog on this subject recently that gives several great tips.  It is definitely worth a read.
  • When looking for a service provider (lawyer, accountant etc)  ask them for references for similar businesses.  Make sure they understand your business as you do not want to pay their hourly rate to teach them.  
  • When checking references, ask each reference for an additional reference, preferably one that no longer does business with the person your checking on.

Take your time and do this right.  You do not want to end up “married” to someone you just can’t work with. 

Enhanced by Zemanta
Share

Think like an Angel Investor

PlainsAngels InitiativeYou are invited to join us in learning how angel investors look at potential investments. Plains Angels invites entrepreneurs and other business minded people to join local angel investors  in the due diligence training sessions starting with Negotiating Terms / Group Investing February 28.  These ongoing training events will take place every month on the 4th Thursday.  You can see the entire schedule of events at tikly.co/PlainsAngels/

Besides my work at the BIZ, I am also the organizer of the Plains Angels.  The Plains Angels is an angel investor forum  based in Des Moines but serving the mid west.  One of the elements of this group is a series of classes on due diligence.  For those who have raised capital, you know that Due Diligence is a broad and complex topic.  The Plains Angels offers these training classes on a number of due diligence topics.  The best part is these classes are open to anyone with an interest in the Due Diligence process.  If you are contemplating raising capital for your company or own a company where you may someday sell or merge, these classes are a great resource. 

 

Share

Where Do Entrepreneurs Get Their Money? Brad Feld Recommendation

During Brad Feld’s presentation to Thinc Iowa, he recommended the Kauffman Sketchbook series title The Money Game.  This is an extremely well done piece on where entrepreneurs get their money.  This is worth more than  the 3 minutes and 34 seconds it takes to watch

Share
Continue reading →

Number one thing you can do to raise money? Learn to Pitch!

I have seen marginal ideas funded and great ideas shot down for the same reason, the pitch.  While business plans, financial plans, market research, product development and the rest are all absolutely important, they can all be undone in a 10 minute pitch.  Learning to pitch is straight forward.  You need to practice.  Start by […]

Share
Continue reading →

Equity Investments, How do I value my company?

For many raising capital for their startup, the key question is how do I value my company?  Valuation of the company is the basis for determining the amount of equity one gives up to an investor for a given amount of investment.   Agreeing on a valuation with your potential investor may be one of the […]

Share
Continue reading →

Des Moines Turning Into Hub for Entrepreneurs. The BIZ on Iowa Public Radio

I had a great time on today’s River to River show on Iowa Public Radio.   River to River is Iowa Public Radio’s talk program that focuses on the news, issues and events in Iowa.  Ben Kieffer, host of the show had done his homework and was prepared with great questions and some wonderful guests.  Joining […]

Share
Continue reading →