October 25, 2007

How to help your startups

As your portfolio expands, it often gets hard to juggle board meetings and helping the individual companies.  As a recent startup, FundingUniverse would like to give a few thoughts as to what a new company most needs from an investor with little time.

1. Expert advice from those with experience in a certain discipline.  This means that specific advice about an area of the company will be more productive than advice about a company as a whole.  We often see startups that are constantly reminded of their overall shortcomings, but who never receive specific critiques on what exactly they are doing wrong.  Most companies know they are doing something wrong from a high view, bring it down for them and they will have a much better chance of correcting it.

2. Encouragement is key for any startup.  While critiquing is important, if it is not followed up with encouragement, entrepreneurs will often stop listening.  If you have the chance, respond to press releases and praise companies that have launched new projects or services.  It is best if these come unsolicited because it shows your ongoing interest in the company.

3. Help keep the focus of the entrepreneurs.  Often entrepreneurs can get bored of staying the course with a company and try to go beyond what is good for the company.  Try to encourage the company to stick to a plan and only add to it when absolutely necessary.

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