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Archive for the ‘Basic Business Principles’ Category

Here are a few basic definitions when you are looking for money.

Investor – someone who exchanges money for a share of your company.

Angel – an individual who invests a decent chunk of money in your company ($100-500K) in exchange for some ownership. They tend to be entrepreneurs who have made it big themselves and are often less demanding and interfering than venture capitalists. (This is not always true, by the way.)

Venture Capitalist – a person who is a partner in a venture capital (VC) firm who helps find, select, and manage investments made by the VC firm. In general, VCs get their money from limited partners (these can be anyone from rich investors to corporations to pension funds). The limited partners do not have a say in the investments.

Associate – a junior person at the VC firm who holds no power, but will arrogantly act like they do. If you spend a lot of time with an associate, you are probably wasting it.

Principal – a associate whose been promoted. The power of this person depends on the firm. Still not a decision maker, but can blackball you.

One Pager – a one page (usually front and back) describing your company. Includes some history, mini financials, management description, product description, and business strategy. Your business plan in miniature.

Executive Summary – like the one pager, but a little longer. Your abbreviated business plan.

Your Business Plan – a 20-30 page document that will only be read by the associate. It still has to be good though or they’ll think your not taking this seriously.

Here are a few basic definitions when you are looking for money.

Investor – someone who exchanges money for a share of your company.

Angel – an individual who invests a decent chunk of money in your company ($100-500K) in exchange for some ownership. They tend to be entrepreneurs who have made it big themselves and are often less demanding and interfering than venture capitalists. (This is not always true, by the way.)

Venture Capitalist – a person who is a partner in a venture capital (VC) firm who helps find, select, and manage investments made by the VC firm. In general, VCs get their money from limited partners (these can be anyone from rich investors to corporations to pension funds). The limited partners do not have a say in the investments.

Associate – a junior person at the VC firm who holds no power, but will arrogantly act like they do. If you spend a lot of time with an associate, you are probably wasting it.

Principal – a associate whose been promoted. The power of this person depends on the firm. Still not a decision maker, but can blackball you.

One Pager – a one page (usually front and back) describing your company. Includes some history, mini financials, management description, product description, and business strategy. Your business plan in miniature.

Executive Summary – like the one pager, but a little longer. Your abbreviated business plan.

Your Business Plan – a 20-30 page document that will only be read by the associate. It still has to be good though or they’ll think your not taking this seriously.

Pitch Deck – otherwise known as a presentation (see I told you the lingo was different). Usually a Powerpoint presentation that you use when you present to the VCs. If they are really interested, you probably won’t get past the first couple slides. Make those slides count!

Term-sheet – a non-binding offer of the terms under which the VC is willing to invest (see Elements of a Term-sheet).

Pre-Money Valuation – what the VC thinks your company is worth prior to their investment. This will be different than what you think it is worth (see Valuation (for a Venture Capital Investment)).

Post-Money Valuation – what your company was worth before the investment (Pre-Money) plus the investment. Your pre-money was $5 million, the investment is $5 million. Your post-money valuation is $10 million and the VC owns half.

Well, this is a decent list to start. If I think of other VC terms needing defining that are not otherwise defined on the site, I’ll add them here.

Good luck. Term-sheet – a non-binding offer of the terms under which the VC is willing to invest (see Elements of a Term-sheet).

Pre-Money Valuation – what the VC thinks your company is worth prior to their investment. This will be different than what you think it is worth (see Valuation (for a Venture Capital Investment)).

Post-Money Valuation – what your company was worth before the investment (Pre-Money) plus the investment. Your pre-money was $5 million, the investment is $5 million. Your post-money valuation is $10 million and the VC owns half.

Buying a franchise business is one of the most difficult decisions you have to take in your life. It is vital that you seek expert advice before buying a franchise. Franchises in UK are becoming more and more popular; many of which can be found on Franchise Select UK. Profits are much higher as compared to previous years. Thus it’s a fantastic opportunity for better earning.

The initial investment should be considered first before buying a franchise business. Finance Select UK for instance start at only £6595. Then you must check whether your proposed business can be a success in that particular area where you are going to start the franchise.

Better choose a franchise which is nationwide so that there is more chance for getting more customers while compared to local competitors. If you select a nationwide brand you should follow all the criteria followed by them. Please make a detailed report of the trading history of the franchise you have decided to buy.

Ask franchisor the contact details and the trading details of an existing franchise.

In the case of new franchise companies, it’s very difficult to get references from other people who are running the franchise, but they tend to offer incentives and discounts to get you on board and sometimes getting in at the start has its rewards.

Franchisor should provide proper training for better operation of the franchises. Training should be based on the business methods followed and the way of implementation of those methods. The franchisor should provide ample support for all the business related activities. Franchisor should be able to handle various issues and disputes that may arise. You should carefully verify the agreements related to the renewal and resale of the franchise.

Check whether the franchise company is a member of franchise association. In United Kingdom, British franchise association have adopted several policies for better operation of the franchise business. By: Franchise Select UK