Dr. Earl R. Smith II

Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com

There are many ‘types’ that investors routinely avoid. Angel investors and venture capitalists sit through a lot of presentations in the course of a year and see almost every kind of founder that they want to avoid. Of course, there is a complication. Sometimes the presenters unwittingly give the impression that they fall into one or another of these categories. It is never a tragedy when one of the bad apples is identified and avoided. But it is a tragedy when a legitimate proposal from a competent team is dismissed because they carelessly tagged themselves as one. Investors have to make lots of decisions in relatively short order. It is important not to give the wrong impression in these early meetings. A bit of creative preparation goes a long way towards avoiding such an outcome. Read the rest of this entry »

Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com

The Money Chase is the graveyard of many a start-up. It can drain the energy and resources out of a new company and leave the founders frustrated and bitter. For many, seeking angel or venture capital investment is the most complex and subtle effort they have ever made. Most money chases fail because the founders do not have an investment quality company. The others fail because they either mismanaged the process or misunderstood how a successful money hunt should be managed. Yet others fail because they are simply not credible as entrepreneurs. This article is about that last group. Experienced angel investors and venture capitalist are always on the lookout for them and seldom take them seriously. Here are some types that they normally see and, for the most part, avoid: Read the rest of this entry »

Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com

After the rush of figuring out a new idea for your business and pulling together a team to run it, one challenge faces all entrepreneurs. They must find the necessary financial resources. For some, the ‘money hunt’ can come to dominate their activities. Others find solutions that allow them to at least launch the business. Many companies founder because the team never figures out how to meet this challenge. How you meet this need is one of the most important steps in determining if your company is at least going to have the chance to succeed. Read the rest of this entry »

Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com

I want to state at the very beginning that most angel investors I have worked with do not fall into the categories that follow. For the most part, they are honest, professional and dedicated to helping their portfolio companies thrive. To the extent that they have foibles, they are no better or worse than the rest of us. This article is about that small percentage of angel investors that can really give you heartburn and seriously damage your chances of building a successful business. Here are some of the types that you should avoid. Read the rest of this entry »

Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com

There is a tendency among entrepreneurs to chase money wherever they find it. The pressure to find the financial resources so necessary to build a business can be over-mastering. Most of the time the partnerships which form between founders and angel investors are productive but, in a few cases, I have seen it turn very destructive. Companies that should have realized success have been held back by investor partnerships that have severely limited their potential or, in some cases, doomed them to failure. Read the rest of this entry »

Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com

All investors are bombarded with requests for meetings. Entrepreneurs put a lot of effort into networking and building relationships that will allow them to make a presentation to a possible source of funding. They have honed their elevator speech and given it many times. Mostly the results of these contacts are non-committal or an outright expression of no interest. All investors say no or maybe much more frequently than they say yes. But, there are the times when you say yes and a meeting is scheduled. Here are a few thoughts on how to handle that meeting. Read the rest of this entry »

Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com

I am sometimes asked by investors to ‘parachute’ into a company and give them a quick assessment of conditions and possibilities. Most of the time, the company has been under-performing. Frequently the money that the investors provided has been spent and they are facing the need for follow-on funding. The investors want to know if additional investment is prudent. Generally I am asked to opine on four options: 1) shut it down, 2) sell or merge the company, 3) overhaul the team and value proposition and re-launch, or 4) make an additional investment and stay the course. My first steps are to prioritize those options and present a quick summary of the strengths and weaknesses of each. I also focus on the threats and opportunities that will most likely present themselves. Read the rest of this entry »

Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com

The closing table is no place to finally come to terms with the fact that you are about to sell your interest in a business that you may have spend years building up. It is no place to come to terms with the fact that tomorrow morning you will wake up and either have no place you have to be or nowhere near the authority over the people you built into a team. Coming to terms with the facts of life may mean that: Read the rest of this entry »

Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com

In the aftermath of two important developments – the election of a new and transformative administration in Washington and the financial and economic downturn, I have found myself working with companies that are in need to refocus and, in some cases, reinvention. For the most part, these companies are well established, mid-market businesses with proven management teams, established customer bases and value propositions that historically served them well. Many of them are government contractors with long-standing relationships with clients and programs – established contracting vehicles – and a business model that drove them through years of growth. Lately something is not working nearly as well as previously? Revenues may have flattened – customers may have started to seek other alliances – the business development team has begun to lose traction – business is not going as well as it had. That is generally when I am contacted by either the CEO, Chairman of the Board or the lead investors. Read the rest of this entry »

Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com

One of the most difficult decisions that a founder faces is when and to whom to sell his interest in a business – a business that he might have spent a considerable part of his adult life building. It is a decision that is often made and unmade many times along the way. Frequently and after much work and discussion, a founder will end up deciding not to sell. The result is lost time, resources and reputation. Read the rest of this entry »