return to homepage

Duquesa Marketing Newsletter – February 2012

DUQUESA MARKETING NEWSLETTER               February 2012

Quick Links
Find us on Facebook   View our profile on LinkedIn   Follow us on Twitter   View our videos on YouTube   Visit our blog 
Related Articles
There Is Always Money to Fund Start-ups Just Be Focused and Creative – It’s Never Easy


Where Does the Money Come From?

Do Not Shortchange Funding Needs – Too Little is Worse Than Too Much

Click Here to Subscribe to Our Newsletter
Duquesa Quote of the Month:
 ”A bad workman blames his tools”,

13th century French proverb

Tip of the Month:
Taking shortcuts is to entreprneurship as the asp was to Cleopatra

Recently I reviewed a Business Plan that was submitted with a goal of raising a $2 million angel funding round. The product was a Hair Care Accessory that had real commercial potential. If I were grading the plan in one of my classes I would have given it a solid B. I was smitten with most of the assumptions that the document detailed to support the projects viability, except one. 

There was only one very major red flag that any Venture Capital investor would seize upon and consider a disqualifier; the $2 million angel funding round. The question that is always asked when a prospective Entrepreneur presents to Venture Capitalists (VC) is this: “How much have you invested of your personal capital into this project”. In some way, shape or form this question always pops up. It is usually not well answered. 

In this case the Inventor wanted the $2 million for salaries, a manufacturing facility, travel, staff and offices as well as for inventory build and Marketing. My job is to prepare Entrepreneurs for the rigid cross-examination they will surely receive from the VC panel that examines investment opportunity. I quickly had to refocus my prospective client that funding sources want to know what you are going to do with their money, as well as what you are not going to do with it. Building fixed overhead falls into the category of what you are not going to do with investment monies. 

Ask yourself, “Would you invest in you”? If you will not invest monies and assets that you own in your project why would anyone else. For decades banks required a significant down payment before loaning money to buy a house. Housing was considered a great investment for those who had equity in the property. About 20 years ago underwriting standards were loosened and today we see what having no skin in the game has done to housing and the economy. 

(Please click here to read the entire article)