Tag Startups | Jenifer Bartman

February 29, 2016 by Jenifer Bartman

Getting Started: Preparing for the world of entrepreneurial adventure (Discipline)

Published by CPA Canada in CareerVision

The word “entrepreneurial” is often associated with a freewheeling, zig-zagging, devil-may-care, caution-into-the-wind type of attitude. Although it’s true that the ideas and new ways of doing things that are typically associated with startup companies require some creative thought, this is not all that’s needed. In fact, one of the things that is surprising about young companies is just how much discipline they need in order to be successful.

Startups are focused on building: new companies, new products and services, new markets, new ways of doing things. Like any construction project, this is best done by building on solid ground, starting with the site, a good foundation, and using tactics that are tried and true. Although this particular house might include some new features or ideas (think geothermal heating or windows that provide privacy with the flick of a switch!), most construction fundamentals still need to be in place. Why is this the case? Simply because it’s important to put evolution into practice within a stable environment, as combining too many new things at once can cause the structure to come tumbling down.

This type of balanced progress (or evolution under control) resonates well with early stage investors, as it raises the likelihood of overall success. It also serves as a means to manage and mitigate risk, which is something that we have already explored in this series. Understanding that the sound business practices and discipline that are learned in the corporate world shouldn’t be abandoned; but, rather, leveraged and built upon, is a key area of opportunity for anyone entering a startup company.

Why it Matters

When something is young; be it a child, a puppy, or a company, it needs more structure, not less. Think about the last time you learned how to do something: in order to understand the task, your role, and the implications of doing it right (or wrong!), it was necessary to pay careful attention to the lesson, understand what needed to be done (and how), practice, and perhaps take corrective action (or refer back to the manual) in order to get it right. Startup companies really aren’t much different than these examples.

What runs against the grain of what early stage investors know to be true is when young companies do the opposite (remember that devil-may-care attitude?), applying good business practices just about nowhere. If the intent to is make a new way of doing things work for the long term, it has to be supported by the fundamentals; business planning, financial management, implementation monitoring, and defined roles and responsibilities are just a few examples of the discipline that should be in place. In many startup companies, an investor would be challenged to find any of these practices!

Get Started

Benefit from the established fundamental business practices that are typically present in large companies by learning how to incorporate them with discipline into a startup environment:

Dust off that textbook: Although it might have been a while since you’ve held the student viewpoint, recognize what is part of good, old fashioned fundamental business practices and undertake the discipline to learn how to put (and keep) them in place. Areas to think and learn about include planning, budgeting, assigning tasks, monitoring performance, documentation, and roles and responsibilities.

Practice recognizing where business fundamentals can be applied: Regardless of the environment, there is a place for good business practices. Learn how to transfer what you have observed and worked with in a corporate environment to that of a startup business. Resist the temptation to fall into the “it can’t be done” trap; experienced investors know that it can be done.

Learn more about what you don’t know: While in the relative stability of an established organization, take the time to learn more about areas with which you are less familiar. Research, courses, and new job responsibilities are all strategies for learning.

Test your ability to perform on a disciplined basis: What sounds simple “on paper” is typically much more of a challenge when it’s put into practice. Pursue opportunities to take learning to a practical level and be sure to take note of how performance could be improved.

Think in both the short and long term: Short term thinking tends to equate with getting things done, while a long term mindset is more about putting policies and procedures into place. Recognize that investors expect to see both: the track record of what has been achieved and established practices in a business to demonstrate discipline and ongoing value.

When you take the time to think about a startup company in the context of other things that are early in their developmental stage, it is blatantly obvious that much structure and attention are needed in order to shepherd a neophyte safely into the future. By separating the creative process of generating ideas from the disciplined approach of building, it’s possible to fully recognize the stark differences between the two. This is what early stage investors see every time.

January 7, 2016 by Jenifer Bartman

Getting Started: Preparing for the world of entrepreneurial adventure (Early Stage Financing)

Published by CPA Canada in CareerVision

One thing that most start up companies have in common is a lack of resources, including people, capital, and “stuff”. The root of this shortfall (or the thing that can resolve it) is money, something that can be hard to come by in the startup world. Once entrepreneurs have exhausted their own funds, and often that of friends, family, and anyone else they can convince, the only remaining option is to find an investor. This is a big step for many young companies, as it represents the first time that the money ask goes outside of “the circle”.

There’s another important reason why approaching an investor is such a significant step, and it is simply this: most entrepreneurs have no idea what investors need to know in order to make an investment decision. Put another way, investors, be they experienced angels or institutional funds (such as venture capitalists) have very specific expectations in terms of the information they require. This includes content and format, as well as fitting within the investor’s particular mandate. While it might sound simple, it’s anything but, and most of what investors receive doesn’t meet their needs at all.

Life in a corporate job usually doesn’t involve spending time in this area, especially in terms of just how critical it is to success. Financing matters are typically handled by others, and access to this type of external party is limited. In this series, our focus is on understanding the significant differences between a startup environment and the corporate world so that you can place a greater amount of emphasis on developing some of the skills that will serve you well in advance of when they’re actually needed. So far, areas we’ve considered include risk, rejection, and money. Understanding the expectations of early stage investors couldn’t be more important!

Why it Matters

Entrepreneurs tend to show a lot of confidence when discussing the topic of investors. They’re excited about the product/service they’ve developed, and generally expect that others will be equally impressed. Comments like “so-and-so wants to invest” or “is ready to cut a cheque” are often heard, but as the process moves forward, these seemingly slam-dunk situations tend to fade. Impressed or not, entrepreneurs are often left to wonder where the money went.

A big part of the reason for this is that young companies lack the ability to package an investment opportunity in a manner that meets the needs of investors. Be it the business plan that lacks context, too much emphasis on the product, or a financial forecast with questionable assumptions (or none at all; startups can’t forecast!), investors aren’t buying. Entrepreneurs tend to respond by offering up information that is used to run the business, or even worse, more technical information, in the hopes that the tide will turn. No such luck.

Get Started

Not understanding the needs of early stage investors is a very common problem in the start up world. Rise above it by taking the time to understand what investors want to know, well in advance of when the bank account is empty:

Research the topic of early stage financing: Venture capital and angel investing are specialized areas that are not understood well, and reading about it in a text book isn’t sufficient. Tap into resources produced by investor networks, associations, and similar sources to understand how it works and the preparation that is required.

Recognize that investors have specific needs: Many entrepreneurs simply do not do this. They believe that all they have to do is provide “what they have” and the investor will adapt. In a world where deal opportunities vastly outnumber the supply of capital, this isn’t likely to happen anytime soon.

Learn how to write a business plan: Bypass the folklore that “investors don’t read business plans”; they do. In addition, they challenge entrepreneurs on their business model, target markets, and the financial outcome of implementing the plan. All of these areas are very difficult to address well in the absence of having developed an investor ready business plan.

Network with experienced advisors: Those who specialize in the area of early stage financing have a clear understanding what is needed to raise the likelihood of getting to yes. Although there are no guarantees in life, their expertise can be invaluable. Look for those with a demonstrated early stage financing background, such as a former venture capitalist.

Practice accepting rejection gracefully: As simple as it sounds, doing this well can be the difference between ultimately receiving capital and burning your bridges. Chances are, you won’t raise money on the first (or even on the tenth!) try, so learn how to make the most of these interactions by asking questions, seeking out network contacts, and leaving a professional impression. Too many entrepreneurs do the opposite.

Thinking that your product or service is so great that investors will line up to put money in is a path to failure. If there is a scenario out there where all of the stars will line up to secure easy capital, chances are, it won’t be your company. These are rough lessons that are best learned before they happen, so take the time to understand the complex world of early stage investing and prepare for it.

in Career / Early Stage Financing / Entrepreneurs / Financing 0 comments

October 8, 2015 by Jenifer Bartman

Getting Started: Preparing for the world of entrepreneurial adventure (Rejection)

Published by CPA Canada in CareerVision

Chances are, you’ve had some real success in your life thus far. Perhaps, you’ve graduated with a business degree, obtained a professional designation, won a job or two, and maybe even received some awards or honours along the way. Although you might have experienced some disappointments, they tend to pale in comparison to the accomplishments that are well worth celebrating.

As you progress in your career, the odds are that you might experience a setback or two unlike anything you’ve encountered thus far. As the stakes get higher, the likelihood of success can get proportionately smaller, and what keeps us trying is the realization that the potential rewards are often greater. Having said that, in the corporate world, jobs can be like buses, with another one coming along at any moment. If you miss the first one, sit tight, as another opportunity isn’t far away. There is a certain kind of comfort in this.

Working with a start up company can be quite different in this regard, and it’s important to understand the implications if you’re considering making the switch from a corporate job. In this series, our focus is on understanding the significant differences between a startup environment and the corporate world so that you can put a greater emphasis on developing some of the skills that will serve you well in advance of when they’re actually needed. So far, we’ve considered the implications of risk, the ever expanding job description, and money. Let’s talk about rejection.

Why it Matters

If you’ve met someone who works with a startup company, they can probably tell you lots about the upside; the excitement, thrill of doing something new, and the opportunity to “chart your own course” (they will soon learn otherwise!). What they probably don’t talk much about are the odds of getting to the point of real success, which can be startlingly bleak.

With an abundance of new ventures launching wherever you look, the reality is they are challenged to find the necessary resources, customers, and capital to be successful. In a world where demand far exceeds supply, many upstarts don’t last very long. This reality is particularly true in the case of seeking the necessary capital to expand products, market effectively, and support growth. Many entrepreneurs consider this to be the easy part, as who wouldn’t want to support their venture? As the months go by, it becomes clear that just getting an investor meeting is difficult, much less making a pitch and getting funded.

In reality, the odds are stacked against startup companies. Chances are that your venture will be rejected again and again; by potential customers, investors, and partners. Those that work with startup companies, regardless of their level of success in life thus far, are likely to face rejection in a way that they never have before. This can be disheartening, as well as quite a shock to the system.

Get Started

Although no one likes to spend time thinking about the downside, doing so is a good way to strategize to get to a better place. This includes planning to face rejection and how to rise above it:

Develop sound problem solving skills: Those who find resilience in difficult times tend to have an ability to think creatively and solve problems. As simple as it sounds, many people just aren’t very resourceful and lack the ability to determine what to do next. Practice problem solving by approaching situations with a Plan B, Plan C, and even a Plan D. Make it a “game” for yourself to strategize how you might get over hurdles, even in situations where they don’t actually occur.
Adopt a flexible mindset: Those who last the longest during difficult times perhaps have the greatest ability to be flexible, in terms of adapting to circumstances that are different than what was expected. If funding isn’t received when anticipated, or turns out to be less than planned, surviving the setback can be all about how flexible a company can be.
Learn about early stage financing: Since financing is so integral to success and so elusive at the start up stage, it’s an important area to learn about, sooner rather than later. Understanding how this niche area works and what investors look for can help you to be better prepared to respond to challenging situations.
Have an outlet for countering setbacks: Rejection and setbacks are stressful, and having a coping mechanism for challenges that are unlike anything previously experienced is important in order to keep going. Find what works for you, be it creative interests, sports, exercise, or meditation and practice on a regular basis. The startup world is truly a marathon and it’s important to develop longevity.

Preparation won’t end rejection, but it might help to make it less frequent. It will also put you in a better position to withstand the many setbacks that will come and find the ingenuity and wherewithal to keep going. The entrepreneurial world isn’t like where you’ve been. You’ve got to train for it.

in Career / Early Stage Financing / Entrepreneurs 0 comments

July 27, 2015 by Jenifer Bartman

Getting Started: Preparing for the world of entrepreneurial adventure (Managing Money)

Published by CPA Canada in CareerVision

Although you might think you know the meaning of the phrase “the buck stops here”, working with a start up company will reveal an entirely new definition. Call it life or death, the last quarter, the final frontier; money matters in a way that it never has before, and is a topic that will find its way into most conversations, from morning til night.

In comparison, most who work in the corporate world think about money in just a handful of ways: the paycheque (and when it’s coming), annual raises (and the likelihood of getting one), what the next job pays (and is it worth the trouble), and perhaps, whether the company has a budget for a particular initiative or event. Most of these interactions seem distant, somewhat detached, and of a lesser frequency. In a lot of ways, there is a relative amount of stability in these periodic musings.

Working with a start up or, what investors often refer to as “early stage”, company can be an exciting place, but it’s important to fully consider what’s involved before making the switch. In this series, we will do exactly that, so you can make an informed choice, and perhaps, benefit from placing a greater emphasis on developing some of the skills that will serve you well in advance of when they’re actually needed. So far, we’ve considered the implications of risk and the ever expanding job description. Let’s move to the issue of money.

Why it Matters

Start up companies are often born from ideas, not to mention the endless enthusiasm of the entrepreneurs who lead them. As with building a new home, start ups have a tendency to need everything, from supplies, to people, to technology. These are basic costs that are often funded by the founders and typically have little to do with attracting customers. Before long, a young bank account can find itself empty, and often much more quickly than expected.

With some of the novelty having worn off, (but, enthusiasm not dampened), entrepreneurs start to more fully appreciate just how much is involved in attracting and maintaining customers. Familiar phrases at this stage include “long sales cycle”, “it’s more work”, and “not what we expected”. Converting leads into sales and having the resources to fulfill the needs of customers require money, and guess what? It’s often needed in advance of receiving customer payments, which makes the need for cash flow management (and actual cash) all the more critical.

Those who work in the start up world need to find comfort with this “edge of the razor blade” existence, otherwise what they’re trying to build probably won’t be around for very long. The reality of being in this situation can be a shock to the enthusiastic system of those who truly believed that the world couldn’t live without their product.

Get Started

Building a new relationship with cash can be difficult, especially when it’s unexpected. The good news is that you can plan for it, making the transition less daunting. Here’s how to get started:

Review your expenses: Take a look at your current expenses to fully understand what they are (you might find some surprises during this process!). Identify items that could be cut or reduced, and think about the lifestyle changes you could make, if necessary (is now really the time to get rid of your roommate?). This will provide you with a baseline of information and some alternatives for when you’re ready to enter the start up world.
Build a war chest: Cash in the bank provides both security and options, and saving in times of a steady paycheque is seldom regretted in the future. Recognize that working with a start up could (and likely will) result in unexpected expenses and an uncertain income stream, so take advantage of cash flow while you have it.
Take cash flow management to a new level: Cash flow forecasts are often something that is part of an accounting education; mechanical, at best, with less emphasis being placed on accuracy and outcomes. Start ups live and die by their cash flow, and if you haven’t managed money in an environment where results are everything, expect a white knuckle ride. Take the opportunity to get some practical experience by managing your own cash flow and see how well you do.
Expect the worst: You might be wondering where the “plan for the best” portion of this phrase went; no need to mention that, as entrepreneurs have it covered! You can be a valuable resource by planning for the downside that will happen, particularly in terms of money. Be sure to build in contingencies for delays and potential customers that will change course midstream.

One of the main reasons why young businesses fail is simply because they run out of money, and this can have little to do with the quality of the product or service that they provide. Surprisingly, growth actually requires cash. Learning how to work with money in advance of having to do so is a bonus on all levels: improving your comfort level (or managing your anxiety), providing realistic information, and increasing the likelihood that the company will survive. You hold the key to ensuring that the buck stops on solid ground.

in Career / Early Stage Financing / Entrepreneurs 0 comments

June 2, 2015 by Jenifer Bartman

Getting Started: Preparing for the world of entrepreneurial adventure (Responsibilities)

As published by CPA Canada in CareerVision:

If you’ve ever come across someone who works with a start up company, chances are, they will tell you how exciting it is. The thrill of building something new, perhaps, with products and services that the marketplace hasn’t seen before, not to mention the fun associated with dreams of hitting it big. It’s not uncommon for entrepreneurs to accentuate the positive, as they view start-ups as what being in business is all about. “In on the ground floor”, “there from Day 1”, “Microsoft before it was Microsoft”, risk/reward mentality. What could be better than that?

Although working with a start up or, what investors often refer to as “early stage”, company can be an exciting place, it’s important to fully consider what’s involved before taking the leap. Those who haven’t spent much time around the start up world might be surprised to find out what the flip side of opportunity looks like. In this series, we will consider exactly that, so you can make an informed choice, and perhaps, benefit from placing a greater emphasis on developing some of the skills that will serve you well, in advance of when they’re actually needed.

In Part 1, we considered the issue of risk. Let’s move to what just might be the dark side of the start up world; the ever expanding job description.

Why it Matters

Yes, mother told you there would be days like this; that is, days that don’t end due to what seems to be an endless task list of urgent “to do” items. It’s true that early stage companies attract individuals for their particular skill areas, such as engineering, sales, and a host of technical capabilities. All of these areas are essential to developing and moving a young upstart forward. What isn’t often part of the discussion is the long list of “other duties as assigned”, which could include tasks that you might consider to be well below your pay grade. This isn’t quite the same as your corporate job; you know, the one that actually has a description.

The bottom line is that start-ups have limited resources, in terms of people, time, and money. When things need to get done, there isn’t the luxury of delegating lesser tasks to a staff group or putting up the cash to resolve it. In a world of empty bank accounts, the buck stops with those who are around what is often a small table. Running errands, formatting documents, making the coffee, or cleaning up the workspace are necessary, and although it might sound funny, it’s amazing how foreign all of this can be after spending a few years in a large, established company. And in addition to these required, but time wasting tasks, you’ve also got to get your real job done; urgently!

Get Started

Working for a start up is an adjustment; there’s no two ways about it. And although the need to pitch in and do what’s required might sound petty, it’s surprising just how much of a shift this can be from what might be the norm in the corporate or professional services world.

Here’s how to get started:

Mindset is key: The secret to doing menial things well is having the right attitude. Check yours to ensure that you’re not looking down on tasks that you might consider as “someone else’s responsibility”, but rather, taking pride in a job well done and a willingness to help. Once you do, you’ll start to notice how many people are not willing to do so.
Organize where possible: Although you can’t plan everything that will come your way, it’s amazing how much actually can be organized when you make the effort. Look at the responsibilities that you have on a daily, weekly, and monthly basis and plan how and when to get the work done. When the unexpected comes along, the majority of what needs to get done won’t get derailed. This approach is one that will serve you well wherever you go and is a tactic of the highly productive.
Set short term goals: Keeping a keen eye on what needs to be achieved in a day, for example, can be helpful in planning your time and checking in to ensure that your task list stays on track. This approach can also be used to create the “positive pressure” and sense of urgency that deadlines tend to generate, creating windows of time for completing some of the more less than stellar items.
Plan for setbacks: Start ups tend to have more than their fair share of setbacks, with lots of time being spent at Square One. Recognize this, and take progress for what it is, as there will be days when the only success you’ll be able to point to is those menial tasks. Learn that even these are worth something.

There’s a certain pride that comes from the achievement of what isn’t exactly glamorous; the marathons, the mountain climbs, the cross country treks. In order to survive the start up journey, it’s important to recognize that it’s not the quick sprint to success that entrepreneurs tend to imagine. But, like many of the climbs that have characterized your path thus far, it might just be the time of your life.

in Career / Entrepreneurs 0 comments

April 2, 2015 by Jenifer Bartman

Getting Started: Preparing for the world of entrepreneurial adventure (Risk Management)

Published by CPA Canada in CareerVision

So, you want to work at a start up, or maybe, with that young company that looks like it’s going finally to raise some investment capital. What could be more exciting than that? Or, you might be at a place in your career where we’ve all been: one of seeking out new opportunities and fields where the grass is greener. But, before you leave that corporate job, there are a few things you might consider, because, well, how to put it? Working for a start up is different. Is that bad? You ask. Or, is that good? You wonder. Well, the reality is, it could be both, but really, it’s just different from the world of larger, more established organizations.

Although working with a start up or young (what investors often refer to as “early stage”) company can be an exciting place to be, it’s important to consider some of the other aspects of the opportunity fully before making the switch. Those who haven’t spent much time around the start up world might be surprised to find out what the flip side of opportunity looks like. In this series, we will consider exactly that, so you can make an informed choice, and perhaps, benefit from placing a greater emphasis on developing some of the skills that will serve you well, in advance of when they’re actually needed.

Let’s start with the issue of risk. Although risk, in general terms, can be one of those theoretical areas, when working with a young company, its existence is not only evident, it’s very much real.

Why it Matters

Start up companies, or those in the early stage of development, are usually not short of ideas, enthusiasm, and ingenuity. Their world is often one that is emerging, including new technologies, new ways of doing things, and new markets. The reality is, that although start ups can sometimes lead to success, they more often than not lead to failure (or, more gently put, a learning experience). This might sound like an obvious statement, however, many who are involved in the start up world become so focused on the opportunity that the downside doesn’t matter much. In reality, however, it is always there. A lack of experience (or attention) can result in not seeing the downside for what it really is, including the risk that is associated with it.

Get Started

One of the things about risk is that the greater you understand it, the greater the opportunity to overcome it. Too many entrepreneurs fail or refuse to acknowledge its existence, resulting in circumstances that too often cannot be overcome (and leaving many wishing they could turn back the clock). In addition, the stresses of living in a risky world, day in, day out, can be too much to bear.

Get started on the right foot by putting risk in its place from the beginning:

Seek out risk management opportunities: Risk management is a learned skill, so if you’re currently working with a large or well established organization, it can be a good opportunity to learn how to identify and manage risk. This represents valuable knowledge to address risk in future roles, and your start up partners will thank you for it.
Conduct an honest assessment: Since working with a young company could (and often does) mean uncertainty in a number of areas, ask yourself honestly if this is an environment that fits well with your lifestyle. Can you adapt to an uncertain income stream? Does moving away from a stable environment create feelings of discomfort? What will you do if the business isn’t successful? Ask the tough questions now and be mindful of both your logical and emotional perspectives.
Plan for the unexpected: In advance of moving into an environment of higher uncertainty, take advantage of where certainty does exist. Saving, completing professional development programs, and seeking out learning opportunities all can be done well in a stable environment and can be something to lean on in leaner times.
Balance risk and reward: Although it’s true that young companies can be risky places, they can also have rewards, including new experiences, an opportunity to contribute significantly, and commercial success. You might even also get the chance to own part of the company to share in future financial performance. The key point is that risk and reward should be considered in balance, as seeing a situation only for its rewards can lead to trouble.

There might come a time when a start up opportunity presents itself and must be quickly pursued, regardless of your state of readiness. Based on the inherently risky nature of early stage companies, this can be a mistake. Rather than becoming frustrated with the situation, why not get started to plan for becoming well equipped to make the leap to playing a key role in a young company? If this one isn’t right, you’ll be better positioned when the next one comes around.

in Career / Entrepreneurs 0 comments