“See people for who they are, and not who you want them to be.”

I’m sure many of you have friends who want to start a company with you, yet they have nothing to their name (other than your friendship) that proves their value as a potential business partner.

They have no track record of putting in long hours on weekends.

They don’t take on side projects.

They don’t know what it’s like for a struggling entrepreneur who, in spite of his constant efforts, has never been in the black.

I don’t think I’ll partner with friends like these.  At least not in the beginning.  Enjoying a conversation about a mutual vision is one thing; fulfilling that vision after years of non-stop frantic work is a different story.

Show me, instead, the person who has been practicing, prepping, and conditioning himself for start up work…  He’ll have the tenacity to keep plowing away, even when the light at the end of the tunnel wanes from time to time.

A few months later, we went our separate ways.

I wanted to focus on making sales and gaining some traction.  He wanted to take care of international patents and ensure that his design could never be stolen.  That’s a bit oversimplified, but it was ultimately this fundamental difference in our approaches that caused the split.

A few months prior, I was talking with someone about an idea he’d been wanting to pursue for years.  I distinctly remember him saying, “You’re free to take this idea from me and run with it, I’ll probably never get around to it anyways.”  And he said it as though he’d just blessed me with a million dollars on the spot.  What a saint!  He didn’t realize, however, that (A) I don’t usually care about an intangible idea unless it was mine to begin with, and (B) I don’t have the energy, time, or money to waste on someone’s half-baked concept when it has no legs.

The most difficult hurdles for realizing any idea are gaining traction and building momentum. The vultures that you think are going to swoop in, steal your idea, and be more successful than you are usually imaginary (I think it’s actually far more likely that your business partner will screw you over, rather than some stranger who catches wind of your idea).  Being protective of an idea is fine to an extent, but it’s counterproductive when you become paralyzed by your own paranoia.

If you’re in the early stages of getting an idea off the ground, it’s silly to sit around and count your chickens.  You haven’t accomplished anything yet!  I think it’s more important (and practical) to put your energy into these things:

• Determining whether your idea is solving a problem or not.
• Developing a deep understanding of the industry you’re going into, on both a macro and micro level.
• Finding a way to be first in a category (even if it means creating a new category).
• Building a narrow and loyal customer base.
• Actually getting those people to buy.

Worry about the patents and NDAs for when they’ll actually matter.  No point in stressing over paperwork if it’s only protecting a hypothetically successful idea.

Stop being so defensive.  Just go out and make something happen!

So, what about Venture Capitalists? How can an aspiring entrepreneur get money from them?

I was able to listen to five very experienced entrepreneurs judge several different business plans last Friday. It was for an event called “Venture Adventure,” where investors reviewed students’ business plans, gave them feedback, and the winners got prize money. Because I was keeping track of time for the judges, they let me sit in on their discussions. They were all filled with years of wisdom, so I took a lot of notes on how they were judging the applicants. Without further ado, here are my notes on…

How to Get Money from VC’s

1. Provide a story, prove you have an opportunity (not a product, not an improvement), then tell them how you’ll deliver.
2. Show that you have a sincere (and healthy) passion for your idea.
3. Explain why your idea hasn’t already been done. You aren’t the first to think of this. There might be a reason your idea isn’t on the marketplace.
4. Establish credibility by doing independent/primary market research.
5. Explain how you plan on delivering your product/service to the customer.
6. Know what differentiates you from the competition.
7. Consider ALL costs, including salaries, office supplies, etc.
8. Be modest. If you’re a 20-year old sophomore in college, don’t tell the investors you’re going to be the CEO. You don’t have experience. Say you’ll be hiring one instead.
9. Don’t tell investors that part of your exit strategy is through an IPO (initial public offering). These are rare, and most investors view this as a cop out. It’s better to say you’ll be working towards being acquired.
10. Never promise to give a return on the money you’ve borrowed. You’re liable to get sued that way. Instead, offer the investors a solid set of milestones you plan on achieving. Also, know what a safe harbor is.