7 Tips to Successful Fundraising for Young Entrepreneurs

In reading the start-up and tech blogs these days, one would think investors are chomping at the bit to fund startups like yours. But as is true with most situations in life, you shouldn’t believe everything you read.
Don't get me wrong, there are certainly examples of big and fast rounds and companies where money landed in a founder’s lap. But this isn't the norm, nor should it be expected. Fundraising is hard, no matter what anyone tells you.
In September, my company CrowdTwist, a customer relationship and loyalty platform in New York, raised $6 million from backers including SoftBank Capital, Fairhaven Capital, kbs+p Ventures, Bertelsmann Digital Media Investments and others. Here are some honest lessons I learned after raising that Series A round of financing:

1. Time is not your friend.
   Fundraising is in many respects a full time job and the inertia of your company won't take a vacation. Your customers, users, employees and everyone else involved will continue to require your attention even though you're in the midst of a draining and consuming fundraising process. So the shorter this process takes the better. Moving fast and efficiently can also help stave off second thoughts among investors. Similar to a house that sits on the market, the longer a deal sits, the more questions and concerns are raised. Why didn't XYZ fund do it? What have others seen that I'm not seeing?
2. Know who you want to work with…
   Long before you're ready to raise your round, think about the funds and people that you'd eventually like to work with. Begin to build relationships with these people and funds well before you need to ask them to participate. When it comes time to formally begin fundraising, the conversations will be much smoother and simpler since a previous relationship exists. Mark Suster, entrepreneur and venture capitalist, has a good post on this topic, “Invest in Lines, not Dots.”
3. …Then, check them out.
   As our world becomes increasingly connected and more intimate, there is more communication among founders than ever before. This is a good thing. Ask other founders if they've had experience with certain funds or partners. How did they behave as an investor in the good times and even more importantly, in the difficult times?
4. Stay in the driver’s seat.
   Don't start fundraising until you are ready. No matter who comes knocking or expresses interest, the process should be on your terms and when you're ready. As Roger Ehrenberg, the founder and Managing Partner of IA Ventures, once wrote: “There is a chasm a mile wide between interest and conviction.”
5. Coordination is critical.
   It's vital to have answers to simple questions like how much you're raising, why you’re raising it, how you plan to use capital, other players in the market, etc. Once the process moves forward into deeper diligence, you must make sure your business’ other stakeholders are aware of your fundraising effort. From customer calls and potential customer calls to tapping internal resources, you’ll need their cooperation to get things done.
6. The flow of information is absolute.
   For better or for worse, you need to assume that once your deal is on the market, everyone knows about it. What you tell one partner or fund can quickly circulate across funds — and even coasts for that matter. If one firm passes on your deal, others will quickly find out. This isn't to say that investors are conspiring against entrepreneurs — that's certainly not the case, however, people talk and you need to know that.
7. Deadlines are a must, but flexibility is key.
   If given the opportunity, many investors will take more time. Time means results, data points and additional proof points by which to make an investment decision. So you need build in that urgency to keep the process moving forward. Find a meaningful event that will drive the firms involved towards a decision and ideally a term sheet. Still, if you have an investor or firm that you really love and they need a bit more time to get their partnership or work in order, don't hesitate to honor that request. Nothing replaces a great long-term partner.

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SEO 101: The Basics Every Entrepreneur Should Know

The story goes that in ancient times (B.C. – and I don't mean before computers) women of ill repute would have a symbol carved on the sole of their sandals. As they walked through the dirt and mud of the streets, the symbol would be impressed on the road, and men could follow the trail to their "business" location. This makes advertising the second oldest profession in the world.
If you have a business, of course you want the world to beat a path to your door, or at least the right customers coming to buy. Advertising has long been the route businesses would take. Smart businesspeople knew that this included signage, any publicity you could get and word-of-mouth as well as the traditional paid print, radio and television ads.
Well, now the marketplace has moved off the street, and tools such as marks on the bottom of a sandal or the biggest sign and best location, while still serving a purpose, have made way to finding a way onto that first page of Google when people search for your product or services. It's all about SEO — Search Engine Optimization. You may have heard about it and even have a basic understanding of what it is and how it works, but are you prepared to focus your website to use SEO to your best advantage?
Here are some basic tools and ideas you can use to start paying at least some attention to optimizing your website for Google and any other search engines your customers may be using.
Pay for it: You can ensure that your website has a premium position by paying for it, as either pay-per-click or as an ad on the side when your search appears. However, this can get expensive with no guarantee of impact and savvy searchers often skip the paid sites when looking for resources.
Register: Most search engines provide opportunities to register your site, but this is a long slow process with much less impact on your search position than the engine's own search algorithms. In other words, they'd prefer to find you on their own, so help them out with tool number three below.
Make your website spider-friendly: Spiders are the automatic search programs that wander through the Internet and look for sites that should be included in a search. These spiders look for certain items and including them gets their attention.

• Position commonly-searched keywords in your page titles: take a moment to determine what words or phrases people might use to search for your services. For example, if you sell tacos in your community, be sure your titles mention tacos, your community's name, Mexican food, tostadas, and any other word that people may use to search for a restaurant like yours.
• Add content regularly: it's good to have something new on your site at least once a week, and three times a week is optimal. This can be blogs about anything related to your site. For example, you might talk about how to make any bagged tortilla chip taste fresh (put them in you toaster-oven to get them warm just before eating) or what's special about your salsa. It can also include something as simple as weekly specials and up-coming events.
• Make your content rich and readable: yes, you want to make sure your keywords are used regularly, but if your copy reads like a vocabulary list of Mexican food items, the spiders will see this as spam and boom, you go to the back of the line.
• Keep keywords in text form: If they are part of a picture, flash or java script, the spiders won't be able to read them.
• Revel in rich links: Is there a Hispanic culture website in your community? Provide a link to them and see if they will link to you. Your community's chamber of commerce, any restaurant associations and any other non-competing organizations. Quality is more important than quantity.
• Caption your photos. Those spiders can't read your jpegs, but they can read captions. This is another good place to position some keywords and phrases.

Finally, do a before and after check. See where your search position is before you make any changes, and then see if your changes affect your position. This is not a fast process, but it can reap serious rewards in better search placement and more customers at your door.

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Top Tips to Make Your Website SEO Friendly

There is a saying, "build it and they will come," but this definitely doesn't always apply to websites. The best way to get people to your website is to make sure it's search engine optimized. It can be a tricky balancing act between writing engaging content and ensuring the Google spiders can find you. But here are a few tips to help get it right.

Keyword Research

Choosing the right keywords means you can target people who are searching for your particular topic or area of expertise. They should be your starting point before you even start writing. First consider who you're targeting and where your potential audience is — are they mainly in one country or spread around the globe?
Once you have a list of potential keywords you can use tools such as Google AdWords Keyword tool or Wordtracker to choose the best ones to use. As well as using keywords in your copy, don't forget to slip them into title tags, meta descriptions, heading tags, alt text, internal links and more.
There's no firm rule for the optimum "keyword density", or number of times to include words in your text. Of course it will depend on the words or phrases chosen, and the length of the text. As a rough guide, make sure they're in the page title or subtitle, and two or three more times on the page.
Good keyword research is the basis of any strong SEO campaign and it will also provide excellent foundations for expanding your website later.

Target Search Engines

Google is the world's most popular search engine, and the main target for most SEO efforts. But it's not the market leader everywhere.
If you're looking for readers or customers in China, then Baidu is the most popular search engine, while Yandex dominates in Russia. The Japanese still love Yahoo! while South Koreans prefer Naver. Many of these tips will apply across all search engines. But it's worth taking time to research the nuances of the main ones when targeting specific countries.

Good Content

Search engines may not be able to distinguish good writing, but human readers definitely can. Creating high-quality, well-researched content is the secret to hooking users once they've found your site, and keeping them coming back. Don't underestimate the importance of thoroughly checking spelling and grammar.
A clear, easy-to-read layout, with clever use of videos and images will help make the right impression. You'll need to have a system in place to keep your pages fresh and regularly updated. Search engines, as well as readers, prefer websites with fresh, unique content.
If you choose to translate your website for international users, don't rely on automated translation tools. They might be useful for understanding the gist of text, but they're not yet a match for human writers. It's worth paying native-speaking translators to ensure your text is fluent, readable, and error-free.

Choose the Right Domain Name

Ideally your web domain name should be short, memorable and include one or more of your keywords. However, the best ones get snapped up quickly and you might have to pay quite a bit to get hold of one of them. In this case, don't shoehorn in keywords to the detriment of your website name. Stuffing your url with keywords will make it harder to remember, less user-friendly and more prone to typing errors.
If you're considering globalizing your business, snap up those top level domain names. For example, if you use the .com address now, think about the .jp, .fr and .cn addresses too.
This is the most effective approach for SEO. But if you feel it's too expensive or time-consuming at this stage, you can create sub-directories or sub-domains as part of your main site.

Keep the Design Simple

It's best to keep the design of your website simple, well-ordered and easy to navigate. Frustrated users will often give up if they can't find the information they're looking for. Consider your color schemes carefully. Avoid bright garish backgrounds, or yellow or pink text that's hard on the eyes.
Cascading Style Sheets (CSS) keeps the design separate from the content of your website, which means you have greater flexibility. If you decide to localize your content later you won't need to redesign it from scratch.
Unicode UTF-8 is also a great tool as it caters for over 90 different scripts, so globalizing your content will be much easier later on if it's encoded properly from the start.

Social Media

Social media is becoming an increasingly important part of SEO. The Google algorithm is taking more account of social media links now — meaning you should too. It's worth developing a strong social media presence, and making sure your content is shareable.
Add Facebook, Twitter and LinkedIn buttons to your blog posts. And use all three (and more) to spread the word about your website. Of course, social media is all about building relationships, so get chatting and sharing with other users in your field.
SEO is an ongoing process and you won't get results overnight. It can take a lot of work to climb the search engine rankings – and regular effort to stay there. But the payoffs can be huge, as you can reach a growing, global readership.

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Funding Your Startup Might be Easier than You Think

The issue of raising funds for a new business is a worry that's notorious for giving entrepreneurs sleepless nights. Often, an entrepreneur will have terrific ideas, plans, and projects, but they lack the funds to go anywhere with their ideas. This can obviously be a real setback for many people and has the potential to stop some from even trying to start a business.
Below are a few sources of funds that, depending on your circumstances, you might be able to tap into. As with most things in business, each source has both advantages and disadvantages. They've all got their own procedures and processes as well. We won't go into all the information you'll need for each source, but this should, at the very least, get you thinking about the possibilities:

Funding That Could be Available to You

Family and Friends

Although it can be a very uncomfortable thing to do, turning to friends and family when seeking funds is the first option for many entrepreneurs. Your family and friends are the people who care about you the most and will be most likely to help you out. If you are known to be trustworthy, your friends and family are much more likely to lend or give you the money that you need.

Individual Private Investors

When raising the required funds to finance your new business, approaching a private investor is an option that you may want to consider. These are typically people with a high net worth and will often times use their wealth as a tool to encourage young entrepreneurs who live in their community. If you are aware of any private investors in your area, taking your business idea to them just might pay off big. One example of a wealthy person who uses his wealth to encourage young people in Seattle is Bill Gates. Imagine having someone like Mr. Gates backing up you and your!

Private Investment Companies

Also known as "venture capitalists," private investors are another option to try when looking for business funding. These folks are much more selective where granting funds to entrepreneurs is concerned. Venture capitalists prefer to provide you with the money that you require to start your business in exchange for a portion of the business, rather than loaning the money for interest. In these cases, they enter the picture as partners. Never forget that private investors can be very tough, and will often require that they receive a controlling interest in your company. (A 35%-60% equity stake is fairly common.)

Commercial Banks

Not much explanation is needed when it comes to commercial banks. It's pretty common knowledge that they are a major source of funding for entrepreneurs. Higher interest rates and sometimes collateral are part of these funding deals. The one thing you absolutely need to get bank funding is a formal, comprehensive business plan — and a lot of patience. The approval process can take months.

Government Grants

In the United States and around the world, city, regional (state), and federal governments typically budget some money to encourage development of small and medium scale companies. People who qualify for this type of money will be given grants. If you are a citizen of one of these areas and are able to fulfill the necessary requirements, you very well may qualify for a government grant. The obvious advantage of a grant is that it doesn't have to be paid back. The down-side is that the application process can involve a lot of red tape. If you're going for a grant to fund your startup, consider hiring a grant writing specialist.

Public Funding

Investment bankers supply this source of funding. If your company has grown in size and you are seeking funds in order to diversify or expand, selling shares to the public could be viable option for you. There is one major draw-back with this type of funding, however. Since your business will now become a publicly traded company, you are taking a risk of losing control of your company if something should go awry.
The bottom line is that lack of funds should never be an obstacle that stands between you and your dream of building a very successful company. By utilizing one or more of the options above, you have a good chance of getting your idea off the ground. And we didn't even cover bootstrapping, which is a popular method of true entrepreneurs everywhere.

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6 Key Elements of a Good Business Plan

YoungEntrepreneur’s Ask the Expert column seeks to answer readers’ questions about everything from starting and running a business to raising funding and growth strategies. To follow the column on Twitter — and to ask a question — use hashtag #YEask, or leave a comment below. Your query may be the inspiration for a future column.
Q: How essential is a traditional business plan? What should a good business plan include?
- Erin McIntyre
Grand Junction, Colo.
A: I started investing in startups in 1996 and have seen plenty of business plans. I always get them from people who are seeking some of my money and from entrepreneurs who are starting a capital raising campaign.
Unless you have a spectacular track record as an entrepreneur or an exceptionally great new business idea, you cannot raise capital without a business plan. I have invested in six startups and three of those were sold for a total of $2 billion. The other three went out of business.
Related: Lean Startups Need Business Plans, Too
And even in that tiny sample, there were clues to these different outcomes in the business plans. Simply put, the business plans that resulted in successful outcomes contained deep insights into the customers who ended up buying the company’s products. The ones that failed, did not.
Despite that simple — and as an investor — critical insight, 99 percent of the business plans I see are missing that critical ingredient. Before getting into all the key elements of a good business plan, you should make sure you do a great job at conveying your understanding of the customer.
Here’s how. First, you have to figure out the group of customers that you want to sell to. Then, you have to develop an interview guide — a list of questions such as why current products don’t meet their needs, what an ideal product would look like, how they decide among competing vendors, and where they perceive an unmet need.
Related: The Good, the Bad and the Ugly of Business-Plan Competitions
You should then interview at least 20 potential customers and make sure your analysis of their answers to these questions is in the business plan. Your analysis should include key quotes from those potential customers that reinforce the conclusions.
A good business plan should cover these six topics.
1. Executive summary: If you had two minutes going down an escalator with a potential investor, you should talk her through your executive summary. This should answer questions such as: What is your company’s mission? Why is it important to you? Why do you think your company can make money pursuing that mission? What is your track record of winning? How much money do you need? What kind of return can I expect if I give you the money? Why?
2. Business/product description: If you have more than two minutes, the investor will want to know more details. The business/product description should describe your company’s mission and present the details of the product that you have in mind to achieve that mission. This description should also focus on specific product attributes that you think will make it better than the competition.
3. Target market: This section details which group of potential customers your company will target. It describes why you picked that market, its revenues and growth rate, the key factors driving growth, and typical net profit margins in that market. This section must, in my opinion, also present the results of your customer interviews.
4. Plan to gain market share: Here you will explain the key factors, ranked by importance, a potential customer uses to decide among competing suppliers. It will also describe how well those customers perceive that competitors perform on the various factors. It will next describe how your product will outperform competitors on the key factors. Finally, the plan to gain market share section will set market share goals and describe what your company will do to achieve those goals
5. Management team: This section will present biographies of the members of your team. If you have no prior entrepreneurial experience, investors will be looking for signs that you and your team are winners — this could show up in outstanding academic, athletic, or extra-curricular accomplishments.
6. Cash forecast: This section is in some ways the least believable for an investor. Here, investors are really looking to see whether you put in enough effort to make a detailed estimate of how much cash will be needed to achieve your goals and what revenues and profits will ultimately flow from that investment. The key here is to develop realistic assumptions and to prepare for investors to ask you questions about why you chose them and your sources of information.
To me, the most important part is how well you understand the customers — if you do a good job with that, I think you will boost your venture’s odds of success considerably.

Read more stories about: Ask the Expert, Business Plan, business planning, Peter S. Cohan

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Business Idea Center: Online Businesses

Domain Name Broker Match marketable domain name owners with willing buyers.

Category: Online Businesses Startup Costs: $2,000 - $10,000 Franchises Available? No

E-Bargains Help people save a buck by compiling online deals in one spot.

Category: Online Businesses Startup Costs: Under $2,000 Franchises Available? No

E-Commerce Consultant Use your web smarts to help others grow their online businesses.

Category: Online Businesses Startup Costs: $2,000 - $10,000 Franchises Available? No

eBay Consultant Teach others to sell on eBay as an eBay consultant.

Category: Online Businesses Startup Costs: Under $2,000 Franchises Available? Yes

Genealogical Researcher Love research? Help others go through their family tress as a genealogical researcher.

Category: Online Businesses Startup Costs: $2,000 - $10,000 Franchises Available? No

Information Consultant Use your strong research skills to start an information consulting business.

Category: Online Businesses Startup Costs: $2,000 - $10,000 Franchises Available? No

Internet Trainer Use your web savvy to help others get online.

Category: Online Businesses Startup Costs: $2,000 - $10,000 Franchises Available? No

Online Art Prints Sell art prints to customers anytime, anywhere with an online store.

Category: Online Businesses Startup Costs: $10,000 - $50,000 Franchises Available? No

Online Children's Camps Help parents find the right camp for their kids with an online directory.

Category: Online Businesses Startup Costs: Under $2,000 Franchises Available? No

Online Contract Forms Contracts are a part of everyday life for businesses. Cash in on this need by offering the forms online.

Category: Online Businesses Startup Costs: $2,000 - $10,000 Franchises Available? No

Online Contractors Directory Contractors are always in need. Help others find them with an online directory.

Category: Online Businesses Startup Costs: Under $2,000 Franchises Available? No

Online Diet And Fitness Convenience is key for people trying to lose weight. Give it to them with programs and tips online.

Category: Online Businesses Startup Costs: Under $2,000 Franchises Available? No

Online Entertainment Coupons Make cheap entertainment even easier to find by putting coupons online.

Category: Online Businesses Startup Costs: $10,000 - $50,000 Franchises Available? No

Online Franchise and Licensing Opportunities Start a database for those seeking opportunities to buy into a business.

Category: Online Businesses Startup Costs: $10,000 - $50,000 Franchises Available? No

Online Recycled Renovation Products You know what they say, one man's junk is another man's treasure.

Category: Online Businesses Startup Costs: $10,000 - $50,000 Franchises Available? No

Online Researcher Have your nose in the net all day? Monetize your research time.

Category: Online Businesses Startup Costs: $2,000 - $10,000 Franchises Available? No

Online Scholarship Directory Applying to college can be an anxiety-inducing process. Help students-to-be make their education more affordable.

Category: Online Businesses Startup Costs: Under $2,000 Franchises Available? No

Online Spokesperson Directory Create a database of people who can help businesses with their PR efforts.

Category: Online Businesses Startup Costs: Under $2,000 Franchises Available? No

Online Trade Show Directory Compile information about trade shows across the globe online.

Category: Online Businesses Startup Costs: Under $2,000 Franchises Available? No

Online Vitamin Sales The current focus on health and anti-aging products makes it the perfect time to capitalize on this market with an online store.

Category: Online Businesses Startup Costs: $2,000 - $10,000 Franchises Available? No

Public Opinion Service Love surveys? Start a public opinion service.

Category: Online Businesses Startup Costs: $2,000 - $10,000 Franchises Available? No

Web Design Create professional, beautiful and functional websites for your clients.

Category: Online Businesses Startup Costs: Under $2,000 Franchises Available? No

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Business

Business Idea Center: Online Tutors

Online Tutors

Business At A Glance

Startup Costs: $2,000 - $10,000

Home Based: Can be operated from home.

Part Time: Can be operated part-time.

Franchises Available? No

Online Operation? Yes

Next Previous

Business Overview

Harness the power of the Internet to take educational tutors from around the globe online via your own specially designed 'tutor directory' Web site. You can create a Web site that exclusively specializes in helping people find qualified educational tutors in their community. The site will have to be indexed by tutor type and geographic location for internal search purposes. However, this is a relatively easy programming challenge to overcome. Once again, these sections could include math tutors, science tutors, English, English as a second language tutors, and more. Visitors to the site who are seeking a tutor to help them or their children with their studies would simply select the category of interest and view the listing to find an appropriate candidate. In exchange for an annual listing fee, tutors would receive a headline listing that is linked to a pop-up page. The pop-up page could give full details and information about their tutoring programs, qualifications, and contact information.

Related Business Ideas

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Sailing School
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Online marketing

inShare50

In their book, The Ultimate Guide to Google AdWords, 3rd Edition, authors Perry Marshall and Bryan Todd lay out the fundamentals of Google's pay-per-click advertising system and detail how businesses can build campaigns to increase search engine visibility, capture clicks and increase sales. In this edited excerpt, Marshall and Todd discuss how to determine which keywords can attract the highest number of potential customers.
What keywords will you use to reach your market? Answering that question the right way can spell the difference between your Google ad campaign's success and failure. Ultimately you're out to hunt down the top one or two keywords that will bring you the most paying customers, and tweak your entire sales process around that. That's what the most successful advertisers we know are doing now.

Related

• 5 Ways to Take Customer Loyalty to the Next Level

Ultimate Guide to Google AdWords, 3rd Edition

By Perry Marshall and Bryan Todd

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AdWords displays related sponsored listings along with unpaid listings that result from a Google search. One of its huge advantages is that it links you with people who are already sold on the concept that you are promoting. You don't have to talk them into anything -- they're already on Google looking for what you've got. You just need to figure out the keywords they use to describe what you offer so that you can connect with them. To answer this question, you need to describe what you're promoting as clearly as possible -- and identify who wants to buy it, in other words, your ideal customer. Here are four tips that can help you get started building your own Google ad campaign.
1. Define your perfect customer. We recommend that you stop right now, pull out a piece of paper and write down a one-sentence description of your ultimate money-in-hand-and-ready-to-buy paying customer.
Those are the people who already know something about the type of product (or information) you sell or the service you offer. These people probably don't know about you, but they do know about your product. Often they have an immediate problem and have decided to go online looking for a solution. They may have already made up their mind about how they want to solve the problem. Now they're searching Google, trying to locate the product that fits their solution and then buy it.
Your description may look like one of these:

• My best prospect is someone who already believes in non-pharmaceutical and natural remedies for migraines and is searching for the best one to buy.
• My best prospect is someone who has already made up his or her mind to buy pottery via the web.
• My best prospect already knows that pay-per-click management services exist and is proactively searching to hire one.

Keep your customer description in front of you as you go through the keyword search process.
2. Identify the keywords that potential customers are using to search for your products and services. Head to Google's keyword tool and enter some phrases that you think reflect customers who are in that mind-set.
Let's take the migraine example. A starter idea would be "natural migraine remedies," because that would seem to specify people who are looking for a "natural solution," something for "migraines" as opposed to more general issues, and "remedies" as opposed to facts or data or information.
Related: 5 Common SEO Mistakes and How to Avoid Them
Based on that search, Google gives a decent-sized list of keywords. We can now go through the list keyword by keyword and compare each to our written customer description, choose the keywords we feel are a fit and ignore the ones that aren't. You may end up with no more than one to two dozen keywords. That's perfectly fine.
3. Determine the number of people searching on those keywords. For your one to two dozen keywords, you can go with what Google's keyword tool has already told you. Or you can take each one and do a further keyword tool search on it and add in totals from other variations that you believe would fully match your written customer description. Consider search volume when choosing your top keyword or keywords.
4. Determine how much money advertisers are making off a keyword. You can judge this by how much the keyword costs. You're looking for the keywords where the money is. The market has its own way of answering this. The maximum cost per click that people pay represents the upper limit of the money available in that market.
Head over to Google's traffic estimator to find this out. You can collect as many relevant keywords as you want, and then make an educated comparison to find the best fit for your customer profile. You're off to a great start when you've got 6 to 12 tightly matched groups of keywords. Ultimately, you're best off with a one, single bull's-eye keyword.
The most important thing to know about a Google campaign is that it's not a single technique or something that you set up once and forget about. The real power in Google AdWords comes from logging in every few days and making constant refinements that increase your traffic, two, five or even 10 times. The number of visitors grows even while your cost-per-click declines over time.
Related: The 7 Deadly Sins of SEO
Read more stories about: Online marketing, Google AdWords, Search engine marketing

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