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The Art of Doing It Yourself
By Vivek Wadhwa   |   Wednesday,August 12,2009   |    2 Comments
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You don't have to wait for venture capitalists or angel investors to lend a hand. Follow these tips to get the ball rolling on your own.

Ditch the business plan and buy a lottery ticket. That's the advice I give new entrepreneurs who seek venture funding. The odds are better, and you'll get results sooner with the lottery. If you have a great idea that can change the world, then bootstrap your way until you can prove it. Funding will come just when you don't need it.

I founded two tech companies, co-produced a Hollywood film, and helped raise close to $100 million in private and public financing. Over the years, I've also mentored dozens of entrepreneurs. There always seems to be a catch-22 -- you need seed financing but no one will give you a cent until you have a marketable product. Ironically, raising millions of dollars is always easier than raising thousands.

BEYOND IDEAS. A myth propagated by business schools is that the way to build a venture is to create a great business plan, perfect your elevator pitch, and present this to venture capitalists. If that doesn't work, you knock on the door of angel investors.

Ask any entrepreneur who has called on venture capitalists and they will likely tell you that it is almost impossible to even get calls returned. If you get lucky and are invited to present your idea, the due-diligence process will drag on for many months while you mortgage your assets and survive on hope. If you do hit the jackpot, you are required to trade away your first born in exchange for an investment.

To be fair, most business plans don't deserve funding. Venture capitalists receive hundreds of plans every week, and few are worth the paper they are printed on. Everyone jumps on the same new trend, or the ideas are so far out that they have no chance for success. And great ideas aren't enough; it takes experienced management, excellent execution, and a receptive market. It's hard for even the best venture capitalists to separate the wheat from the chaff.

So what should an entrepreneur do?

SELF-STARTERS. My advice to the few with realistic business plans is to bootstrap. Focus on validating your idea, building it, and selling for survival. You have to raise enough money to get started by begging and borrowing from family and friends. And be prepared to dip into your savings and credit cards, obtain second mortgages, and perhaps look
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Reader's comments(2)
1: Good, inspirational. I was always looking for some moral support for my startup. hopefully these words will give me that one last push.
Posted by:Himanshu Jani - 18th Nov 2010
2: great post. Thank you.
Posted by:Jitendra Mandalia - 30th Sep 2009
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