How To Start A Vlog For Your Business The Right Way?
Every Entrepreneur Will Encounter This Question From Investors When Fundraising. Here's The Right Way To Answer It
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That said, if you've ever fundraised before, you'll know that investors aren't exactly clamoring to invest in your company if you tell them you're raising so you can pay yourself, and your employees, and run your company.
So, what are you supposed to say? Perhaps, "In order to grow 5000%?" That's better, but it's not particularly believable, regardless of whatever number you throw out. At this point, you may be thinking that the answer is obvious. Clearly, you need to describe how you will grow by 5000%. But no, that's wrong ... Or at least, it's not entirely correct.
Related: 6 Tips for Raising Your First Round of Funding
The goal is to raise the next round
If you're a true startup aiming for meteoric growth, you'll always have the next round — even if that next round is an acquisition or an IPO. That's the nature of the venture treadmill: Taking the equity financing will keep growing the total value of the company more than not taking it.
If that isn't the case, you've already exited, you're not a "true" startup and are likely a "normal"/lifestyle business (which is fine, but you have less need to worry about fundraising), or the company is dying.
Needing the next round is essentially definitional for a startup. There's enough significant growth ahead that investment now pretty much always makes sense. While that may be true overall, it doesn't answer the question every entrepreneur will encounter during fundraising:
Why now?
The crux of that question isn't merely a tactic to draw out more information or delay the round. It ultimately gets at why an investor should put in money this round. Similar to "I will grow 5000%," the answer of "because I'll be worth much more in the future" is not the wrong answer— it's just not specific enough.
What will you do with the money this round?
Now that we've gotten through that:
You're going to grow (5000% or otherwise).
You'll be worth much more next round.
Your target in fundraising is just to get to the next round, not to "never fundraise again" (which implies your growth will cap out quite soon).
This is the roadmap for what you are supposed to say. But more than that, this also informs how you should scale your business and what to prioritize. What you truly should answer for investors is: What metrics will
Do you achieve using the money now to raise the next round?
Why is this the right way to answer — and plan your business?
This is concrete, realistic (because a startup needs to keep raising money), and gives investors a sense of what they are buying. "A rocket ship of a company!" is a naive answer. Better investors want to know what metrics will be achieved, which is to say, what appreciation will I get on my equity/money if I invest now?
What valuation appreciation is the investor actually buying with this chunk of money? You can't answer that question unless you nail down what you'll do to get to the next round.
That informs how big the round should be (how much money is required to hit the metrics) and also gives a baseline for evaluating whether or not the price is reasonable (what will the company be worth if the team actually executes and achieves these metrics) and finally, a sense of whether or not it is realistic (do I believe that you'll actually be able to hit these metrics, with this amount of money, and in the amount of time you have until the next round?).
Of course, these answers aren't just useful for investors. They also become critically valuable for you as a founder. It informs how you should execute and what metrics you should prioritize. There's always too little money and too little time in a startup. If a question of prioritization arises later, you'll know what's most important: Those metrics that most impact your next round's valuation and your ability to get there.
This will help clarify your thinking
As an entrepreneur and VC, I find that too many founders think about fundraising the wrong way. First-time founders especially are mystified about what they're supposed to say or show investors to get them interested. And when they're actually in meetings, they get endless questions.
It has made certain founders think that fundraising is purely about presentation skills and charisma. In truth, that's definitely part of it. However, it isn't all of it. And if you get past the early stages of your startup, the weight will be more and more towards the "rational" framework outlined here of "what is the investor buying this round?"
There's no reason to keep raising questions and keep getting frustrated. Align your pitch with the answer to this question, how much money you're asking for by when, and your execution plan for achieving metrics to reduce conflict with your investors, frustration in fundraising, and short-circuit a lot of the back-and-forth. Happy fundraising.
How To Start A Vlog For Your Business The Right Way
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'Right Is Right And Wrong Is Wrong:' Local Business Hurt By DOT Right-of-way Taking
Sep. 12—It's been three years since a right-of-way man walked into Del-Ray's consignment shop in Waynesville and told Scott Oates the state would be taking the front of his property for a round-about construction project on North Main.
Oates learned the wider road footprint would claim all 16 parking spots in front of his store, render his entrance door unusable, and hamper semi-trucks from pulling into the delivery bays.
"I said 'Help me understand how I am going to operate? How am I going to get couches and mattresses out the front door? How am I going to get my semis in and out of here?'" Oates recounted. "And he said 'I don't know.'"
When the right-of-way agent told Oates what the Department of Transportation was offering, Oates felt it wasn't enough to compensate him for the loss.
"I explained the reason I couldn't take that. I told him I wasn't trying to make any money, I was just trying to be fair," Oates said. "He left and two weeks later they sent the sheriff's office in here with an eminent domain letter and took it from me. They gave me one offer, and one offer only. No negotiation."In hindsight, Oates wonders if he came across as too soft that day.
"I told him I was a man of faith, and I didn't believe we should have to sue each other, that we could work this out," said Oates, a devout Christian.
- The state's buy-out offer was placed in escrow at the courthouse for Oates to go pick up.
- "They said 'If you go get it, that means you agree to the offer,'" Oates said.
- Three years later, the money is still sitting in the escrow account.
The DOT has eminent domain rights, so it doesn't need a property owner's permission to take right-of-way for road projects. The DOT makes an offer based on its assessment of fair market value, and if a property owner doesn't like it, their only recourse is to sue.
Story continues
Oates has decided he has no choice but to go that route.
"I didn't want to get a lawyer, but right is right, and wrong is wrong. It's wrong how they treated me," Oates said. "They've not been by, they haven't come in to talk to me, nothing."
Tip of the iceberg
Oates' story is a harbinger of what many businesses will soon be facing along Russ Avenue. Russ Avenue is slated for a major redesign that will lop off-road frontage for numerous businesses to make way for the wider footprint.
Right-of-way agents began buying out property along Russ this summer in preparation for road work to begin next year. Hardee's — which will be taken wholesale — has already closed.
"I've already been contacted by some owners on Russ Avenue who are starting to go through this," Oates said.
When construction started on the roundabout project in May, the front of Del-Ray's was blocked off with traffic cones and detour signs.
"We saw a substantial drop in business that first month," Oates said.
During construction, he's also dealt with excessive dust and run-off funneling onto his property due to grading.
"The water pours up against my building and cakes mud along it," Oates said. "The dust got so bad it shut down my air conditioner."
The state's buy-out offer doesn't account for the loss of business that Oates has suffered during construction. Nor does it account for his loss of parking.
He's calculated that he can fit six parking spaces along the side of his store — hardly enough to replace the 16 he's losing out front.
"We get up to 1,500 customers a week. There's no way we would be able to handle that no more," Oates said.
The buy-out offer also doesn't cover the cost of building a new entrance on the side of the shop because the new road footprint will render his existing front door unusable. And the curb cut into his side parking lot will be practically impossible for his semi-trucks doing deliveries to navigate.
"My question to them was 'How do I get my semis in here to continue to do business?'" Oates said.
But he never had the chance to flush those things out with the right-of-way agent.
"They've not been by since. They haven't come in to talk to me, nothing," Oates said.
Labor of love
Del-Ray's has over 5,000 consignors who bring in their used clothing, accessories, furniture, and home decor to resell.
"We put hundreds of thousands of dollars back into the community, real money back into people's pockets," Oates said.
Del-Ray's has also built a loyal customer base, like Haven Greene, who's been shopping at Del-Ray's since it opened.
"They go above and beyond with their customers. I feel like I'm part of their family," Greene said.
Del-Ray's has also expanded into new furniture and mattresses at rock-bottom discount prices.
Colleen Rathbone, who has worked at the store since day one, said the Oates' Christian philosophy extends into their business model.
"Scott wants people to be able to have nice stuff they normally couldn't afford," Rathbone said.
When Oates and his wife, Jennifer, decided to start Del-Ray's 11 years ago, they quit their steady, good-paying jobs at the paper mill and as a nurse to become entrepreneurs. It was a leap of faith, but they were successful enough to pay off the building free and clear within a decade.
"The good Lord has blessed us," Oates said.
Now, the Oates are fighting to hang on to what they built.
"This is our retirement. We invested all our money, all our time into it, everything," Oates said. "We were counting on it."