Last Updated Jul 29, 2011 11:43 AM EDT
"The phrase I hear ad nauseam, to my absolute dismay, from aspiring young entrepreneurs around the world is, 'if we just get 1% of the market, we will be a [insert insane, improbable, nearly impossible, profoundly unrealistic valuation here] company.'
I wish I could physically hit people with a textbook or other blunt object every time I hear this phrase. But I don't think that's legal in most places. Perhaps, then and only then, would young people listen the first time around -- and think twice about saying those hideous words ever again.
My first venture was an utter failure -- mainly because we worried too much about what others 'wanted to hear' or 'needed our business to be' rather than executing the tasks at hand and focusing on real revenue generation. Bottom line: If the business had been successful, money would not only have been easier (and more realistic) to obtain, but also might have come to us. That's why I always tell young people to avoid investors -- or pitching for investment -- as long as you can until you have your house in order. Otherwise, trying to raise money could just have the adverse effect of its intention and bankrupt the company.
Track record, proof of concept, and management are all I want to hear young people say when they pitch for investment. Leave the hypothetical nonsense and the 'things you think you need to say to an investor' at the door. Investors can tell how seasoned and ready you are based not only on the business you run, but on the words you speak."
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