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10 Questions From Young Entrepreneurs About Startups Posted: 26 Sep 2019 07:59 PM PDT Who says you can't start a business when you're young? These days, more and more young entrepreneurs who are full of great ideas, passion, and drive are launching their own companies—any many are finding success. I recently had the pleasure of serving as a mentor to a number of young entrepreneurs as part of the innovative U.C. Berkeley-Hass Entrepreneurship Program, which is under the outstanding leadership of Rhonda Shrader and Adeeba Fazil. The program offers undergraduates, graduates, and alumni an opportunity for career counseling, professional networking, and more to help boost their entrepreneurial endeavors. The young entrepreneurs I counseled had some great, creative ideas for different startups, and many of them had already gotten some early traction in their businesses. They also had some great questions—questions that many entrepreneurs, young or old, have about starting, growing and financing a business. So I thought I would share my answers to those questions here. 1. I'm Just Starting My Business. What Kind of Entity Should I Set Up?The founders of a company must initially determine whether to organize the company as a limited liability company (LLC), general partnership, a sole proprietorship, or a corporation. If formed as a corporation, the company must also determine whether to file an election to have it taxed as an "S corporation" rather than a "C corporation." S corporations are corporations that elect to pass corporate income, losses, deductions, and credits through to their stockholders for tax purposes. Stockholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates (so called "flow-through taxation"). This allows S corporations to generally avoid double taxation on the corporate income. A C corporation under federal income tax laws is one that is taxed separately from its owners. Generally, all for-profit corporations are classified as C corporations, unless the company validly elects to become an S corporation. A C corporation does not have limits as to who could be the stockholders (as S corporations do). And C corporations may have different classes of stock (such as preferred stock and common stock), which is not allowed for S corporations. Venture capitalists will typically only invest in preferred stock in a C corporation. An LLC is another entity that provides limited liability to its owners the way C and S corporations do, and an LLC also provides flow-through taxation to its owners. So what type of entity should a founder form?
For a comprehensive discussion of tax issues in startups, see Pay Attention to These 9 Essential Startup Tax Issues. 2. Where Should I Incorporate My Startup?Corporations are formed pursuant to a state's laws. Many people recommend incorporating under Delaware law, but my preference is to incorporate in the state where the business is located, as this will save you some fees, filings, and complexities. You can always reincorporate later in Delaware if desirable. 3. I Have a Great Idea That Has No Competition. How Can I Protect It So Others Don't Steal My Idea?Ideas are a dime a dozen; it's the actual implementation of an idea that is more important. If it's truly unique, get a patent for it (visit www.uspto.gov). You may get some protection through copyright, trade secret programs, or NDAs—but not a lot (see The Key Elements of Non-Disclosure Agreements). You can't worry too much about someone stealing your idea. The best thing to do is implement the idea and get a lot of traction for it. If you think there is no competition for your idea, you are likely dead wrong. I've had multiple entrepreneurs over the years tell me they had no competitors, something I was able to quickly disprove with a simple Google search. 4. How Should Equity Be Divided Among My Co-Founders?There is no one correct answer to this question. But you should discuss it with your co-founders and agree upon it up front to avoid any misunderstandings later on. If you are the original founder and the brains behind the idea, a good argument can be made for more than 50% ownership. The split should take into account the following:
5. Do I Need a Technical Co-Founder for My Business?If you are not a technology expert, and technology is going to be crucial to your startup, then it will be helpful to have a technical co-founder (or, at the very least, a senior-level hire who can handle the key technology functions). Investors and incubator programs like Y Combinator often like to see technology-oriented co-founders. But that doesn't mean you have to give this co-founder 50% of the equity. 6. How Can I Come Up with a Great Name for My Startup?This can be difficult. First, brainstorm a bunch of different names, then do a Google search to see what is already taken—I'm betting this will eliminate 95% of your choices. Make it easy to spell. Make it interesting. Don't pick a nonsensical name so people won't have a clue as to what your business actually does (with all due respect to "Google" and "Yahoo"). Do a trademark/tradename search on the name, then make sure you can get the domain name (see 12 Tips for Naming Your Startup Business). Every good ".com" domain name is already taken; however; I usually only recommend obtaining ".com" names. Ultimately, 99% of domain names are available to be bought—you just have to be prepared to pay for it. Do a "WHOIS Search" at networksolutions.com to find out the contact information for the owner of the domain name you're interested in, and offer to buy the name. Don't be naive and offer $500 for a premium domain name. You will be ignored. Be willing to pay a fair amount for a good name (see Key Steps in Obtaining a Great Domain Name). 7. I Have an E-Commerce Business. How Can I Drive Traffic to My Website?To be honest, entire books are written on this topic. But, in brief, the key ways are as follows:
8. What Are the Biggest Mistakes Made by Startup Entrepreneurs?New entrepreneurs can make many mistakes, but here are some of the most common:
9. How Can I Raise Angel or Seed Financing for My Startup?If you only have an idea and little or no progress in executing that idea, you likely won't be able to obtain angel or seed financing from professional investors. So, in that situation, you will have to rely on family and friends, or perhaps consider crowdfunding sites such as Kickstarter or Indiegogo. Most professional seed or angel investors want to see some traction in the business, such as:
The more traction you have obtained, the more likely you will be able to raise financing and get a desirable valuation. How can you get investors interested in you? Investors get inundated with unsolicited executive summaries and pitch decks from startups. Most of the time, they ignore these solicitations. The way to capture their attention is to get a warm introduction from someone they know and trust: another entrepreneur, a lawyer, an investment banker, an angel investor, or another venture capitalist. Check to see if you have any LinkedIn connections to the investor. See 15 Tips for Startups Seeking Angel or Seed Financing. 10. Do I Need an Investor Pitch Deck to Get the Interest of Angel or Venture Capital Investors?Yes, you do. Raising capital from investors is difficult and time consuming. Professional investors expect to see a concise and interesting summary of the business before they will even consider taking a meeting. Therefore, it's crucial that a startup creates a great investor pitch deck that tells a compelling story. You want your investor pitch deck to cover the following topics, roughly in the order set forth here and with titles along the lines of the following:
Here are some helpful pitch deck tips:
For additional guidance, as well as sample pitch decks, see How to Create a Great Investor Pitch Deck for Startups Seeking Financing and The 17 Biggest Mistakes Startups Make With Their Investor Pitch Decks. Related Articles:
Copyright © by Richard D. Harroch. All Rights Reserved. The post 10 Questions From Young Entrepreneurs About Startups appeared first on AllBusiness.com The post 10 Questions From Young Entrepreneurs About Startups appeared first on AllBusiness.com. Click for more information about Richard Harroch. |
7 Ways to Increase the Credibility of Your Blog Content Posted: 26 Sep 2019 08:00 AM PDT Would you believe I’ve written thousands of articles over the past decade? Each time I write a new article, I have to find a way to make the subject fresh again. I want to ensure that my readers find what I write useful and informative, so I use the following strategies to build credibility with my content. Feel free to use these tips for your own content and see if you attract more blog visitors! 1. Find statistics to back your contentI wanted to find a statistic about using statistics in your content marketing, but couldn’t find one! Until proven otherwise, your content is conjecture. It’s your opinion. That’s why adding statistics and research to your blog articles can help you validate your point of view. Let’s say I’m writing an article arguing that content marketing can be more effective than any other type of marketing or advertising. That’s just my opinion at this point, but my reader wants proof: Think content marketing is too big a headache to bother with? Think again, at least if you want to attract new business: content marketing gets 3x the leads per dollar spent than paid search does. Why are you still wasting money on the wrong marketing tactics? Instantly, I’ve got backup for my argument that content marketing rocks. Always link to the original source of the statistic. If you found it on a roundup of other statistics, click to the original data. I try to keep the stats I use within a year old so they’re not too crusty to be useful. 2. Source experts to share their perspectiveAnother way to make your blog content more credible is to ask industry experts to weigh in on a topic. There are actually two benefits to this approach: you get their wisdom and then you most likely get their support in sharing your article once it’s published, so your content reaches more people! I like to have a few questions that I send select people. If I’m writing an article about content marketing, I might ask:
I’d send a friendly email to people I already know or who I’m connected with through social media and ask them to answer the questions. I’d give a deadline so they feel a sense of urgency. The result is a nice, long post with different points of view on my topic. 3. Read what’s out there before you writeEven if you know your subject matter inside and out, you should still know what else has been written on this subject before you dive in. I simply Google my topic and read the top results. I’ll usually get ideas for my content and may wander further down the rabbit hole, searching for more specifics I want to include in my article. Your goal here isn’t to rehash what’s already been written. It’s to find gaps in the existing content on this topic and find a way to write from a different perspective or present a new angle to the story. You can only do that if you know what’s been published. 4. Bold the good stuffIf you’re like 43% of people, you skim blog posts. (There’s your statistic!) People don’t always have time to sit down and read a 3,000-word post—a trend I’m not a fan of. Say it succinctly. They’ll scroll down the page and try to glean what’s most important in the post. Rather than fight the nature of human beings, make it easier for them. Bold sentences that contain key facts so they can find them easily. Beyond that, you should be using headers (typically H2 in the dropdown bar in WordPress) to divide the content into sections to make reading easy. 5. Use images to illustrate a pointIf your article is technical or explaining a process, take screenshots to show your readers exactly how to do something. I did just that in the last section to show you where to find the H2 option. If you’ve got a ton of research in your posts, consider creating custom charts, graphs, or infographics to make the data more digestible. If your content doesn’t lend itself to screenshots or charts, use stock photos to keep readers interested visually. Other Articles From AllBusiness.com:
6. Talk to your audience directlyThere’s a careful balance of not talking over your readers’ heads while also not treating them like children. You first have to start by knowing who your audience is. If it’s rocket scientists, you better be as smart as a rocket scientist so you can speak intelligently to that audience. If it’s a mixed bag, write to about a seventh-grade audience. Where did that number come from? There’s something called the Flesch-Kincaid readability score, which analyzes your content to determine what grade level could understand it and how readable it is. If you’re not sure if your content is hitting the mark with your audience, use this readability test to see how it fares. 7. Back up your content with examplesIf you’re talking about something you think your audience should do (use content marketing, for instance), have examples that prove your point. It could be from your experience working with clients or case studies you pull from online. For my article on content marketing, I could talk about the work I’ve done for a mobile marketing company, helping them effectively establish themselves as a leader in their space. That might compel readers to want to work with me. I hope these tips help you enhance your content and build credibility with your blog. Remember: it’s brands that put effort into the content they create that attract more blog visitors and customers. RELATED: 20 Financial Bloggers Share Their Secrets to Running a Successful Blog The post 7 Ways to Increase the Credibility of Your Blog Content appeared first on AllBusiness.com The post 7 Ways to Increase the Credibility of Your Blog Content appeared first on AllBusiness.com. Click for more information about Susan Guillory. |
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