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Startup Opportunity, Win a Chance to Pitch Your Idea

The Onswipe CEO and new Author Jason Baptiste is giving away a chapter from his fantastic new book The Ultralight Startup: Launching a Business Without Clout or Capital and an opportunity of a lifetime for one entrepreneur to meet four of the best venture capitalists today to pitch their idea.  The venture capitalists include Andy Weissman, Partner at Union Square Ventures, Alex Finkelstein, Partner at Spark Capital, Brad Feld, Parter at Foundry Group, and David Tisch, Managing Director of Techstars NYC and Angel Investor. To enter, go here and fill out some simple information about your startup. The winner will be selected by April 20th, 2012.

The following is an excerpt from Onswipe CEO Jason L. Baptiste’s new book The Ultralight Startup: Launching a Business Without Clout or Capital.

If you pay attention to the headlines about startups getting millions of dollars of funding from investors, venture capitalists, or partnerships, you might think the fund-raising process happens overnight. It all sounds so easy: Some entrepreneur with a thousand dollars in his pocket creates a great PowerPoint investor presentation, secures a few meetings with important people, and bam! A handshake, some signatures, and the deal is done.

The reality is a little trickier. Fund-raising is a process, and although the right pitch might come in handy, in this chapter I’ll discuss the practical start-to-finish way to think about fund-raising that will get you the money you want in the end.

The Real Purpose Of Raising Money And Why it Might not Make Sense For You

More often than not, entrepreneurs raise money at the wrong time and it destroys their startup. This is an understandable mistake, because the press, the outside world, even your peers put a lot of emphasis on raising money.

If you pitch investors too soon, they may get the wrong notion about your business and decide to pass. Although they have the option of coming back to you at a later date, that is highly unlikely. But even if another opportunity does come along later on, they’ll always remember you as the one they passed on the first time around.

There is no one reason why an investor passes, What matters is whether they pass on you based on a full picture of what your company really does. But on the off chance that a startup is able to raise money at the wrong time, it will certainly have a negative impact on fund-raising at a later date.

When is the right time to Fund-raise?

There are seven questions you should ask yourself when deciding if you are ready to fund-raise:

  1. Do you have a technical cofounder? If you have a technical cofounder or someone who is focused on product, you are far more likely to raise money. Product drives the growth of a company; having a product-driven founder can generate growth.
  2. Do you have a demo? If you have a working demo, then you are much more likely to raise money since you can show an investor what your company does. Onswipe was able to fund-raise because we could show investors firsthand exactly what we do. Show, don’t tell.
  3. Do you have any customers? Companies with customers are more likely to raise venture capital than those without. If you don’t have customers yet, you should make this a priority, as it shows proof of traction in the market. It’s not about the amount of traction, but the proof it shows in your model.
  4. Are you ready to bring more people on board? You need to be ready to manage other people and expand your team. If you are not ready for this, then you are not ready to raise venture capital. Venture capital lets you do one thing in the beginning: Hire more manpower.
  5. Have you rid yourself of other obligations? If you are not 100 percent committed to your startup you should hold off on raising money. Many entrepreneurs try to fund-raise while still at their current job. Though it’s good to begin a startup before you quit your job, it takes a whole lot more time and effort to raise money.
  6. Is your business large enough? Most companies are not large enough to be backed by venture capital. To raise venture capital, companies should be in multibillion-dollar markets or have the potential to make revenues of more than one hundred million dollars a year.
  7. Are you able to devote the majority of your time to fund-raising? Fund-raising is a time-consuming process that will completely slow down all other fast-moving aspects of your company. Be prepared to put business development, product development, and any marketing you may be doing on hold, or at least slow them down for a while. Put together a strategy for keeping operations going while fund-raising. I suggest spending 50 percent of your time on fund-raising and 50 percent on continued operations and product development. One founder should still be moving product development forward.

 

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15-Year-Old Founder of Online E-Reuse Business Named Next Teen Tycoon by VerticalResponse

From the Bay Area to New York, online startups to pop-up shops, there is an entrepreneurial spirit that’s sweeping across the country – and it doesn’t discriminate by age.

Building on this spirit, VerticalResponse announced the three winners of its “Next Teen Tycoon” online video competition. The company – a leading provider of self-service marketing solutions for small businesses including email marketing, social media marketing, online surveys, event marketing and direct mail marketing – launched the national contest in mid-January with the goal of advancing teen entrepreneurship. It drew nearly 40 video entries from teens all over country hoping for a chance to win prizes totaling $10,000.

“At VerticalResponse, we’re all about helping small businesses succeed, no matter how young the owner,” said Janine Popick, CEO of VerticalResponse and one of the contest judges. “At a time when we still don’t know what the economy will be like tomorrow, it is so inspiring to see these enterprising teens take charge of their own future. All of our contestants should be proud.”

Eleven finalists were chosen via public online voting, and a panel of judges selected the grand-prize and two second-place winners from the finalist pool.

Grand Prize: iReTron – New Uses for Old Gadgets

Fifteen-year-old Jason Li, founder of iReTron, nabbed the grand prize and will receive $4,000 in “seed money” to grow the business, as well as a free trip to attend the 2012 TEDxTeen conference in New York. iReTron encourages people to turn in their old cellphones and other electronic devices for cash. The devices are then sold abroad, where there is still a demand. View the teen entrepreneur video by iReTron here.

“I started iReTron with the hopes of creating a way for everyone to help the environment,” said Jason, a sophomore at Saratoga High School in Los Gatos, Calif., near San Francisco. “We made our public debut at the Green Festival in San Francisco last year, where I spoke in front of 500 people. We’ve completed more than 500 transactions so far. We’re working with high schools, colleges and other companies to let people know it’s easy to be green.”

Second Place: a1000x – Showcasing Artists for a Cause

As a second-place winner, 16-year-old Jack Uesugi of Wahiawa, Hawaii, will receive $2,000 to help grow his business, a1000x (a Thousand Times). a1000x partners with local artists and helps market their designs while participating in social entrepreneurship. The company prints, sells and promotes limited-edition clothing and other merchandise featuring these designs, and a portion of all profits goes toward social causes. View the teen entrepreneur video by a1000x here.

“We’re called a Thousand Times because whatever you do in life, you want to do it big. You want to do it a thousand times better and put a thousand times more effort into it,” said Jack, a junior at Island Pacific Academy. “You’ll find that in the end, you’ll get the same in return.”

Second Place: StudioVictus – One-Stop Shop for Multimedia

Four high school seniors from Destrehan, La., near New Orleans, also will receive $2,000 to help further their multimedia company, StudioVictus. Co-founders Austin Bergeron, Matt Duhe, Joe Solito and Joshua Stoker officially launched the business in November and offer a variety of services such as photography, Web design, videography, graphic design and app design. The company recently designed the official New Orleans Hornets mobile app, and works with a growing number of local businesses. View the teen entrepreneur video by StudioVictus here.

“With the seed money, we plan to make huge investments in our company,” said Joshua, who attends Destrehan High School along with his three co-founders. “Company work shirts for professionalism on the jobsite, business cards and other advertisements to promote our company, a studio lighting kit for our photography work, and some money for Web hosting.”

Finalist Prizes and Judges

All 11 finalists will receive two best-selling books, “Your Starting Point for Student Success” by America’s top young speaker, Arel Moodie, and “Entrepreneurship” by Steve Mariotti, founder of the Network for Teaching Entrepreneurship (NFTE).

Both Moodie and Mariotti also served as contest judges, alongside Daniel Brusilovsky (CEO/founder of Teens in Tech Labs); John Jantsch (small business consultant and founder of Duct Tape Marketing); Janine Popick (CEO of VerticalResponse); Ramon Ray (small business expert and editor of SmallBizTechnology.com); and Nicole Marie Richardson (executive editor at Inc.com).

“For 30 years, I’ve been working with schools and teaching young people how to run a business, and I think we are truly at an incredible time when it comes to youth entrepreneurship,” said NFTE founder Mariotti, whose organization holds several competitions per year including the World Series of Innovation and Elevator Pitch Challenge. “The students in the VerticalResponse contest have the motivation and courage to act on an idea and make it happen, and that’s a large part of what being an entrepreneur is all about.”

To view all 11 contest finalists, visit http://www.verticalresponse.com/TeenTycoon.