Author: 40Billion

Art mends kids’ lives positively. Donate to GLOBAL ArtXchanges Fund for Youth Art Supplies :) *ad

http://igg.me/p/298359/twtr

http://www.40billion.com/profile/1039189851

Did you catch 40Billion’s founder, Cornelius McNab, on WREK “Let’s Talk Business” radio show today? If not, listen at http://soundcloud.com/40billion/business-crowdfunding-pioneer

There is a $40 billion gap in funding for startup entrepreneurs. What are YOU doing about it?

Many small-business entrepreneurs raise initial funding for their business ideas by borrowing money and getting gifts from their friends and family… Over $100 billion per year already.

40Billion.com just makes it easier, more scalable, and more fun for entrepreneurs and their friends and family to arrange business loans, gifts, and donations. And it’s about time!

Thermometers are instruments that measure temperature. Thermostats are devices that control the desired temperature.

The difference between the two is critical.

Thermometers are reactive. They sit by passively and accept whatever conditions their environment has created for them.

Conversely, thermostats exert control. When the environment isn’t quite right, perhaps it’s too hot or too cold, the thermostat pro-actively adjusts to obtain the desired conditions.

Successful entrepreneurs are typically thermostats. Think about it.

There is an interesting game theory model known as the Prisoner’s Dilemma. The dilemma is illustrated as follows:

Two suspects are arrested by the police. The police have weak cases against both of them. So, here’s what they do…They hold the suspects in two separate cells. Then, they tell each that if they implicate the other, they will get leniency. If not, they are told, they will get harsh treatment.

What typically happens in this situation is that each prisoner decides to implicate the other in order to get a lesser sentence. As a result, the police end up convicting both suspects.

What is most interesting about the Prisoner’s Dilemma is that both suspects made rational decisions (the decision to implicate the other) based on the available information (which was that if you implicate the other you’ll get leniency, and if not, you’ll get harsh treatment).

But the problem was that the available information was lacking. The key missing information was that the police had a weak case. And, as a result, the better solution for the suspects would have been to keep their mouths shut, in which case, they both would have walked.

In business, this scenario often occurs, and unfortunately entrepreneurs often act as prisoners. For example, the entrepreneur who fails because they sought out bank loans and venture capital even though they weren’t ready for bank loans or venture capital, and they should have sought angel investors or friends-and-family funders.

Information and knowledge are the key. Entrepreneurs who lack the key information and knowledge become prisoners. They make perfectly rational decisions. But these decisions are often flat-out wrong because the information on which they made these decisions was flawed.

That is why the best entrepreneurs continuously invest in education. E.g., did you know that 40Billion provides informative business startup guides? In these quick startup guides, you’ll discover useful tips for:

• Funding your business through friends & family, angels, banks, and VC’s
• Writing a business plan in 13 easy steps
• Forming a company as a sole proprietorship, partnership, LLC, or corporation
• Managing cash flow so you don’t run out of money
• Protecting your ideas and intellectual property through patents, trademarks, copyrights, and NDA’s 

Download the short MP3’s and listen to them on your computer or in your iPod, while at home, in the office, or on-the-go. Then, download the easy-to-use templates that come with each startup guide.

Go to http://www.40billion.com/startupguides/ and get educational tips to help you avoid becoming a prisoner.

In a poll of over 140 people, we found that a good business plan is the #1 most important factor in deciding whether to fund a friend’s or relative’s business.

Business plans are critical for setting goals and mapping out your plan to achieve those goals. They are also critical in order to raise capital.

However, there are some funders and investors that say they don’t need a business plan. Rather, they just want to see a company slide presentation and/or a 1-3 page Executive Summary.

So, at this point you are probably asking yourself, “So, do I, or do I not, need a business plan?”

The answer is a resounding “YES.” Let me explain.

A key reason for creating a formal business plan is the knowledge that comes out of it. Specifically, the business plan process forces you to make a lot of key decisions about your business. For instance, writing down your marketing plan forces you to determine the marketing tactics you will employ.

Likewise, the business plan development process forces you to assess your market, identify customer segments and customer needs, and determine the strengths and weaknesses of your competitors. This is all critical information that you need to successfully operate your business.

The U.S. Small Business Administration, in a study called “The Small Business Economy,” found a direct correlation between a business’ success and its creation of a formal business plan. That’s because the business plan development process forces you to really think through the business and make informed decisions.

Likewise, the business plan development process gives you the information that you need to include in your investor slide presentation, executive summary, and your Raise (fundraising profile on 40Billion). For example, one section needs to include your financial projections and uses of funding. Another section must talk about your marketing plan. All of this information comes directly from your business plan.

In a poll of over 140 people, we found that a good business plan is the #1 most important factor in deciding whether to fund a friend’s or relative’s business. So, the best thing you can do as an entrepreneur to increase your chances of success and raise money for your business is to turn your idea into a business plan.

The second best thing you can do is upload your business plan or executive summary on 40Billion.com when you start a Raise, and let funders download your business plan document easily with just one click.

Don’t have a business plan yet? Need help writing your business plan? Use our informative business startup guide to discover quick and useful tips for writing a business plan. Download the short MP3 audio file and listen to it on your computer or in your iPod, while at home, in the office, or on-the-go.

Then, download the easy-to-use business plan presentation template that comes with the startup guide at http://www.40billion.com/startupguides/ today.

Without a doubt, the biggest mistake made by entrepreneurs is pursuing the wrong funders.

Just like a specialized surgeon, most funders have areas which they feel very comfortable with, and others that they don’t.  For example, even the most attractive clean-tech company might be quickly thrown in the trash can by a funder whose core focus is pharmaceutical deals. 

If you are going after the wrong funders, no matter how good your company is, you probably won’t get funding.

Rather than blindly reaching out to thousands of funders, it is important to create a list of those that will actually have an interest in your business. The key factors to look at in creating that list are:

• Relationship
• Location
• Industry Preference
• Stage Preference
• Companies Previously Funded

It is estimated that over 50% of new businesses generate funds from friends and family of the entrepreneurs. However, for many entrepreneurs, the main challenge that they face is locating the right people who are most willing and able to fund their ventures. Recognizing this common problem, 40Billion has created a unique solution called Funding Probability.

As the name suggests, the Funding Probability tool helps users estimate the probability that each person in their social network will become a funder or investor. The tool is based on a proprietary algorithm, which ranks each of the user’s contacts and indicates funding probability with an easy scale of High, Medium, and Low. The “High” probability contacts are those individuals who are most likely to provide funding to a particular business venture, and the “Low” probability contacts are individuals who are least likely to fund it. Based on this scale, the system is able to match the user’s venture with the most promising funding sources in their social networks.

Since launching a prototype of the Funding Probability tool, we’ve seen promising results as 9 out of 10 actual funders in the entrepreneur’s social network on 40Billion were ranked either High or Medium on the funding probability scale.

The Funding Probability feature saves entrepreneurs time and resources that they often spend chasing unlikely funding sources. Fundraisers can access the tool by clicking Invite Your Friends on their business fundraising profile page (i.e., their Raise), and 40Billion takes much of the guess work out of raising money.

We have several Marketing Intern positions open for the Spring semester, and we are accepting resumes from qualified students at top business schools, colleges, and universities.

Please review the job description and requirements at http://www.40billion.com/view_job.asp?jobid=1215833919_142201191445, and send us your resume today.

Cheers,

– The 40Billion Team