Now in its third decade, the Amelia Island Concours d’Elegance is among the top automotive events in the world. “The Amelia” draws more than 300 rare vehicles from collections around the world to The Golf Club of Amelia Island, The Ritz-Carlton, Amelia Island for a celebration of the automobile like no other.
More to come…
About Investor Network (IN Destinations)
Investor Network by JD will have driving experiences as well as dinner for its VIP guest at the event.
REBLOG: Seeking Capital For Your Startup? Remember: It’s About Returns For Your Investor by JD Morris from Forbes
One of the most daunting tasks you are likely to face after having successfully founded a growing startup can be securing enough capital to pay the bills until the expanded operations begin to pay for themselves. Startups seeking funding for their expansions have a number of options for securing capital, but you still need to convince investors that your business is worthwhile as an investment. An understanding of the funding landscape will help hone your sales pitch and increase the odds of a successful capital campaign.
Unfortunately, the American business ideal of steady growth over the long term has been replaced in the minds of many entrepreneurs by dreams of founding a unicorn company that explodes onto the scene and cashing out through an initial public offering. Startup founders need to keep in mind that the likelihood of founding a unicorn is incredibly small, but there are other successful strategies for rapid growth using outside capital. Those strategies should be centered on producing a high company valuation and creating significant wealth for yourself and your investors.
Few modern startups succeed without outside capital.
The Fortune 500 list features a few companies that made it to the top as startups and by expanding the family business. Bill Gates was lucky enough to have a product IBM desperately needed. Jeff Bezos got his seed capital from his parents’ savings and raised $8 million through a series A round from Kleiner Perkins in 1996. Both companies also benefited from fantastic support from advisors and investors. For example, Amazon’s investment bankers played a crucial role in raising debt for them during the dot-com collapse, which resulted in Bezos retaining a large share of the company. When looking at the success of the founders of Facebook, Google, Microsoft and Amazon, you should know that this type of success is even rarer than the unicorn model.
Of course, there is still the chance your company will succeed without the help of outside capital. The bootstrap model, where an entrepreneur can entirely self-fund operations until the company is financially viable, can still work. With luck and products that offer high profit margins, the founder can take home a considerable paycheck. However, bootstrapping is unlikely to land you on the Forbes 500 list of billionaires any time soon. About half of businesses fail within five years, and capital is always needed for rapid growth.
If you are lucky enough to get capital from SoftBank, Sequoia Capital or other mega-funds to stay solvent until an IPO, then you are one of the very rare unicorns. The great IPOs of today tell a unicorn success story. However, there are significant failures. Jawbone’s pivot to health-tracking devices did not keep it from its 2017 liquidation. Dream of a unicorn, but remember, most investors are not looking to deploy capital to develop a unicorn.
Investors know the odds are against you.
Startup investors generally use a high-risk model where they spread their capital among numerous startups, knowing that it only takes one or two to be successful enough to pay back the initial capital investment. Companies that produce such returns are called dragons. Unicorns are more based on valuation. A dragon is one deal that pays the return for a fund after investing in many deals.
Normally two to three startups will provide enough of a return to make a venture capital fund successful, while the others fail to make any return for the fund. Based on this math, startup investors are generally looking for an exit when a company has achieved a valuation that is roughly seven times greater than their total investment in a company, in my experience. Sure, an investor could buy into an existing unicorn, but a high return after the B round is unlikely and often will not cover the losses from their other investments. Most investors need high valuation that will be supported by acquisition valuation versus the longer and riskier path of an IPO.
Laying out a realistic exit strategy is key.
Venture capitalists and startup investors know that most of their bets will be on losers, so if you think your idea is going to be a surefire unicorn that will dominate its market, go ahead and pitch it that way. Investors love to see enthusiasm in a startup, because it lets them know you believe in your company and are willing to put in the work necessary to make it successful. However, you should also lay out a more realistic exit strategy for investors, such as selling the company. I earlier suggested that “entrepreneurs should stop dreaming of the shiny IPO” and focus on being attractive for an acquisition.
Remember, investors are looking for a dragon to show their limited partners (i.e., 700%-plus return). A unicorn can be helpful for venture capital funds to show their investors should they want to raise more money for future funds, but the bottom line is the return they get from investing in you.
ABOUT JD MORRIS
Mr. Morris (JDM) focuses on serving on the board of advisors and board of directors of several private companies. His family of Special-Purpose Vehicle (SPV) invests in a wide range of businesses. JDM has helped close more than $91 billion in deals—leading more than $7 billion in enterprise value of these deals.
He has been a speaker at various industry forums, has been quoted in numerous leading publications, and has made several appearances on Bloomberg, CNET, CNBC, ESPN, and many media outlets. Mr. Morris hosted an educational radio show about financing deals and other hot topics after Bloomberg morning news.
Mr. Morris received a B.A. in economics with mathematics from Hampden-Sydney College in Virginia, where he worked in the development office to pay his way through college. He is an Omega Rho Honor Society student in Washington, D.C., with The George Washington University (GWU). JDM is currently working on finishing a program under MIT Sloan Business School, as well as the MIT Computer Science & Artificial Intelligence Laboratory (CSAIL).
Investor Network by JD has a group of MIT alumni that are investing in companies founded by MIT alumni and students. Today we profile one of their investments into Voiceme.AI LLC.
DISCLOSURE: Investor Network does not invest in companies, but is a networking group help facilitate forming special purpose vehicles (SPVs) with like-minded people. This investment was picked by a group formed by MIT Alumni. The group has invested in 7 companies to date this year with Voiceme.AI closing this month.
The MIT group has made two investments in this MIT alumni’s company to date.
VoiceMe.AI connects the deskless workforce using an AI-powered voice assistant that is optimized for executing communication and improves:
Job Completion Rate
Data Capture and Retention
Our solution enables hands-free enterprise messaging – think of a mobilized Slack for employees on-the-go where communication is executed and received via voice. VoiceMe.AI’s platform currently consists of an Android app that can work seamlessly with off-the-shelf, third-party ear devices that are either Bluetooth or wired. Our proprietary Natural Language Processing, Natural Language Understanding, and Named Entity Recognition models have been custom built from the ground up around the informal, conversational, communication domain.
DISCLOSURE: From Voiceme.AI LLC executive summary (not IN content).
ABOUT INVESTOR NETWORK
Our network started post World War II with several friends that meet during the war and started investing in companies in Lancaster Pennsylvania. Today we have investors from around the world forming special investment vehicles (SPV) to co-invest in companies together. They own large cash flowing (EBITDA) global private business together down to simple seed investment in a startup through as SPV. Members of Investor Network form groups to invest in areas of interest. We are currently expanding our George Washington University, Massachusetts Institute of Technology, Southern California, and Bay Area Groups.
Join us Monday Feb. 3rd, 2014 at 5pm Pacific for Investor Network Nights for few deal and some great speakers! Real Estate, Seed Capital, Hedge Funds, Venture Capital Funds, and more for accredited and non-accredited investors deals!
Deals do get done in December. Have a great deal? What an introduction to BlueRun Ventures or many of our other VC and Private Equity friends? Just check my LinkedIn profile for great introductions:http://www.linkedin.com/in/jdmorris
SAMPLE OF DEALS FUNDED THIS MONTH:
AppFirs $8.7 million Series B round
ClickFuel $4 million Series B round
Cloudera $65 million series E round
Flexion Therapeutics Inc. $25 million series B round
Kapow Events $1.6 million series A round
Kona Medical $10 million series C round
Restore Medical Solutions $2.5 million A round
Zafgen $21 million series D round
PROFILE OF BLUERUN VENTURES:
About BlueRun Ventures:
BlueRun Ventures is an early stage venture firm focused on mobile opportunities in key global markets. Since inception, BlueRun has focused on working with mobile startups to shape the ever-evolving ecosystem. We choose key geographic markets where mobile is a driving force in the way consumers and businesses interact with each other. Today, we have offices in Menlo Park, Beijing, Shanghai, and Seoul.
Mobile is today’s pervasive computing platform and will only continue to grow, overtaking desktops and traditional software. At BlueRun, we think of the mobile ecosystem as more than just devices. Mobile embodies software and services, platforms and applications, infrastructure and brands. It is the first and most often used computing interface for consumers and therefore integral to their lives. The opportunities we see in the ecosystem are just beginning to unfold and we look for passionate entrepreneurs who will make those opportunities a reality.
How we work
We focus on early stage opportunities and we work actively with our companies to build value. The investment is just the beginning. Our investments are partnerships and we help our entrepreneurs reach their goals of bringing disruptive,positive change to existing markets.