Frequently Asked Questions
Q: How do you get paid?
A: Through a combination of work fees, equity, and deferred consulting fees:
- For materials work, such as models, pitch decks, and business plans, we charge a fixed fee for the project.
- For Advisory Board work, we typically receive a nominal amount of equity.
- For Exit Strategy, Cap Raise, and Business Development consulting engagements, remuneration is usually a blend of retainer, equity, and deferred consulting fees (paid after the deal closes).
- For Interim CFO and BD work, we get paid via a blend of retainer and equity.
Q: What industries do you focus on? What types of companies do you work with?
A: Most of our work is with technology startups, including Internet, mobile, web, social media, net markets, SaaS, online video, RFID, cleantech, and others. However, we are generally "sector-agnostic," and we have worked with companies like Kimochis (kids' dolls); TEL (Lamborghini racing); PenAgain (ergonomic pens); Trevi (backyard fountains and accessories); and many other interesting startups. In general, we work with scalable companies looking to grow rapidly (vs. small businesses such as retail stores, restaurants, etc.).
Q: Why should we hire a startup consultant to help us with our funding strategy / business development / exit strategy?
A: Good question; here are a few reasons why startups choose to work with us:
Experience: We can help level the playing field by bringing significant deal experience to your team. This is important since in most cases, startups are negotiating against much larger business or corporate development professionals who have significantly more resources and who negotiate deals for a living, day in and day out.
Extra Bandwidth: We help reduce the very-significant burden on management. Successful business development deals often take several months of strategy, relationship building, and negotiation. A successful capital raise often takes 3 to 6 months. A successful acquisition often takes 6 to 18 months to complete. All of these types of deals demand full time attention when they heat up. This can become a distraction for the CEO at a time when it’s critical to keep business momentum going.
Leverage: we help get some heat on the deal, both by illuminating the strategic value of your startup, and by increasing the number of parties at the table (thus giving you additional negotiating leverage). When needed, we help protect and support the CEO during tough situations and negotiations, which is particularly important when you’ll be working for the acquirer after the deal closes.
Q: Why should we hire a startup consultant to develop our business plan / financial model / pitch deck? Why not do it all ourselves?
A: Good question; here are a few reasons:
Efficiency: The process of developing a business plan (and related materials like a pitch deck and financial model) can take a huge amount of time-- often 100 to 200 hours. Most startup founders are better served by focusing on their core business, and outsourcing this work. In fact, many of our clients are serial entrepreneurs who "did it themselves" the first time, and come to us when they are launching startup #2. They realize it is much more efficient to bring in an expert who does this every day.
Perspective: Founders are often too close to their own businesses to be able to "see the forest for the trees." Working with a business plan consultant-- especially one with deep startup expertise-- helps bring a fresh perspective to problem solving and a fresh voice to pitch development.
Experience: Over the past eight years, we have worked directly with over 100 startups and have had meaningful interactions with probably close to 1000. In addition, we have founded companies, grown companies, and sold companies. We have worked in venture capital and valuation, and served on the Advisory Boards of about a dozen startups.
The point is, we have seen just about every business model and marketing plan known to man. We have seen companies fail, and quite a few succeed wildly. This is largely a pattern recognition business, and we bring this experience to every engagement.
Q. What else should we doing to prepare our startup for launch and for raising capital?
A: Check out our "Best Startup Websites" page for lots of great information, such as lists of VC bloggers, incubators, business plan competitions, and much more. Also see our Partners Page for other solid startup service providers.