Someone recently pointed out to me that “a crisis is the ultimate teachable moment.” Startup founders have long known this. Whether you find yourself dealing with a sudden lack of access to commercial loans, the collapse of a funding round, a management change, or even a failed product, you can help yourself work through such unpredictable — yet probably inevitable — business challenges by being prepared in advance with a response plan. One of the most important areas of your preparation, but one that is often overlooked, is your communications plan.

Maintaining clear and consistent communication with your staff, investors, customers and your partners can make all the difference to the success or failure of business in crisis, says Wendy Lane. She is founder of the public relations and marketing firm Lane PR based in Portland, Ore. Over the years Lane has helped clients, cope with all kinds of crises: from bankruptcies, to public political snafus, and in once case, a violent tragedy at a place of business. (Believe me, this sort of crisis puts the stock market turmoil into perspective, fast). Continue »

Fundraising always demands patience and grit, but passing the hat in the current environment will test your founder’s mettle unlike any time in recent history. Even investors still flush with cash that, only weeks ago, they had planned to put to work, now have grown skittish over the frozen credit markets and are knotting their purse strings instead. If you’re looking for financing, be prepared to work very, very hard for it.

This is true even for the most seasoned entrepreneurs, like Scott Painter, whose pedigree boasts 29 companies, including the early web auto retailer, CarsDirect.com, software and services provider, Zag.com, and most recently, TrueCar, the Zillow for car buyers.

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Daniel Meyerov, OnlyBusiness.com

I was crazy enough to start two businesses at the same time — OnlyBusiness.com and Polaris Blue. My partner and I run them concurrently, and fortunately both have done well. No doubt we got lucky, but I want to share a concept critical to our success that might help other founders, especially in this uncertain market. Create three versions of your strategic plan, one each to address a different potential outcome for your business: the overnight success, slow-but-steady growth and survival mode.

OnlyBusiness.com is a community platform that offers web tools and services to small businesses. My partner and I developed a multi-outcome strategic plan, detailing how the operation would perform under three, clearly defined scenarios. The exercise gave us more options for coping quickly with surprises that might ordinarily have caused big problems.

I’ll show you what I mean, by sharing how we staged three critical budgets for each potential outcome. Continue »

We’ve written recently about how bootstrapping founders can help themselves navigate a very tight credit market. Now, the implosion of the investment banking industry promises to level what was left of the landscape for both IPO and M&A exits. Startup founders would be wise to reassess their strategic priorities.

With fewer opportunities to cash out of their current and future portfolio companies, the agendas of angels and VCs will also shift. Founders who are raising funds will certainly want to revamp their pitch decks, if they are to have any success raising capital in the current climate.

But how? What should a startup founder put on that slide in their investor presentation that addresses potential future outcomes? How can founders adjust their messaging to demonstrate to VCs that they have their strategy aligned with the needs of the investing community now? We asked Faysal Sohail, the managing partner with CMEA Ventures, for advice. Here’s what he had to say. Continue »

Five months ago I became a founder for the first time. I am not a total novice to the Valley; I’ve been fortunate to work with and befriend some very smart (and now influential) people from companies like Google and Powerset. But I am also a Midwesterner who migrated to the Valley in the late ’90s, and my resume includes staid institutions like NASA, which while innovative is not exactly a go-go Silicon Valley company. I tend to think of myself as a member of the Valley “digernati” — working off Valleywag’s radar, not a member of those startup mafias that seem to follow every liquidity event.

Still, one thing that has happily surprised me is my success at networking my way to just about anyone I wish, or need, to see — even if I’ve never met the person previously. Granted the connections often take longer than I’d like, but 9 times out of 10, when I reach out to find someone, it produces an email exchange, a phone call or a meeting. This is how I got to critical partners, added advisors, and found new hires.

Friends tell me: “You’re such a natural networker!” and it makes me laugh. As an engineer who spent most of his awkward teens in his bedroom writing code, I couldn’t disagree more. The truth is that I have taught myself to network, and I work at it — a lot.

Maybe it is consistent with being a geek, but I actually honed my relationship-building skills through practice and experimentation: I took a year sabbatical when the dotcom bubble burst and during this time, the only contract I made with myself was that I would focus on building my professional relationships. I learned some important lessons about networking during this time. Maybe they will also be helpful to you: Continue »

Last week we offered you one founder’s rationale for taking money from angel investors, instead of venture capitalists. It’s a trade-off of sorts: smaller checks, but they often come with better deal terms. Some readers took slight umbrage at this proposition:

“The reality is that our deal terms are going to be the same as a VCs,” says Ian Sobieski of the Silicon Valley-based Band of Angels. “We also want five to 15X returns, it’s just that since we’re only investing $500,000, we can get it at a much lower exit than a VC.”

In other words, just because angels cut smaller checks, don’t expect closing angel funding to be any easier. Competition is tight, says Sobieski. “The Band sees 60 deals a month, and usually accepts one. We’re very selective.”

Being a former founder, Sobieski knows a think or two about jumping through hoops to get a check. So below he offers a few tips to help you close that angel deal, so you can get back to the real work of running your startup. Continue »

Lately we’ve been discussing the many reasons why taking smaller, angel-sized investments instead of larger venture capital stakes often makes more sense for startups in a wobbly, exit-bereft market like the current one.

Today, Ron Conway, the well-known founder of the Silicon Valley-based Angel Investors LP fund, now associated with Baseline Ventures, weighs in with his own assessment of the benefits of the “all angel” investment path.

A former semiconductor executive who went on to co-found Altos Computer Systems, Anchor Intelligence and, most recently, SNOCAP, Conway took up angel investing in 1998. He’s seen his share of both hits and duds, but among the investments that earned Conway his “super angel” status are Google(s GOOG), Digg, PayPal(s EBAY), and Ask Jeeves (now Ask.com(s IACI)). He is also an advisor to Facebook. In other words, Conway knows what he’s talking about. So, if you’re seeking funding, you’d do well to consider his advice, dished out below the fold. Continue »