“Excuses are tools of the incompetent”

Last week was a historical one. For the first time in the history of the United States, an African American by the name of Barack Obama will become the 44th President of the United States. 

Even though his race has always been somewhat of a big deal to some, his intellectual capacity has never been questionned. He has the ability to hold intelligent conversations with Nobel laureates and the grace, to captivate the imaginations of millions of people around the globe. 

One thing that President Elect Obama never did was make an excuse for why he shouldn’t be the next President of the United States, despite the odds being stacked against him. He used technology to fuel his campaign in a way technology has never been used. He visited the most rural areas in the United States to campaign for voters. He targeted the large number of voters that didn’t show up to vote in the 2004 elections in battle ground states like Florida and urged them to come out and vote. He decided not to use a government program that matches campaign funding because he realized that, as amazing as America is, he was going to need to outspend his opponent to get his message across and it was imperative that no limit was placed on this amount.

(more…)

Since I am in the process of getting friends and family to invest in my business, I figured this was a better time than ever to talk about the importance of rewarding investors and the mindset one must have, when it comes to raising funds from investors (this post refers mainly to friends n families but is applicable to VCs , Angels etc).

One of the mistakes Business owners or aspiring entrepreneurs make is that once the investment money starts rolling in, is that these business owners look at the investments as a sort of “payday”. This is the worst thing you can do. If anything, when raising funds to help your business grow (or start), you must look at all investment received as not only debt, but as a beginning point for your business. Because now, you have been entrusted by the investors, that 1) You will not lose their money and 2) That you will , to be best of your abilities, help them to make a return on their investment that is commensurate with the risk involved with investing in your business. If there is one thing to take away from this blog is that, if all else fails, try your best to preserve/regain the investment money that you have received. This is not always possible, and in certain scenarios, it is expected, if the business risk was too high. It is important that in such scenarios, this risk has been thoroughly communicated to the investors.

When it comes to rewarding your investors, you want to be as generous as possible.

“Of course I’ll reward my investors, But why be more generous than necessary? After all, I put in all the sweat, blood and tears into my venture“.

Warren Buffett has always been known to take a low salary (Ok Ok.. his present salary of $100,000 is not LOW by any standard, but compared to what the man brings in for Berkeshire Hathaway, it really is quite low, especially when compared to his peers. There is nothing that stops Mr. Buffett from saying he wants a yearly salary of $10 Million Dollars. The thing is, because of his track record of how he treats his investors, they would most likely have absolutely NO objections, if he were to decide such a thing.. but WB being who he is, its not something he cares about).

Your investors are the ones that believed in you, when the banks didn’t. They are the ones that looked past your bad credit scores (if they even looked at them at all) and past the fact you don’t call them as often as you should. Most of the time, they are not really investing in the venture, in so much as they are investing in YOU. By that, I mean that they are investing in your character and in your abilities to do the task at hand. I have investors that were just like “I don’t really get what your doing but here’s $500. I trust you“. If you are able to generate a great return on their investment, all the better. If it is clear that your mindset is “Investors First, My pay-day second”, not only will they brag about you, but they will deeply respect you.

At Digitalvaliance, customer service is of the utmost importance. You can blow away your customer with your design/application, but if your company were rude throughout the entire process and overcharged for services, chances are , they would never recommend your services. The same principle applies to investors.

I find that by striving to make my investors happy, not only does Digitalvaliance have somewhat of a “family” supporting it, it motivates me to work harder.

Don’t get me wrong, you can’t reward your investors and not reward yourself, as that would defeat the purpose of having your own business. Make sure your investors agreement clearly outlines how you intend to reward your investors, but keep in mind that you want strike a balance between what makes sense business-wise, and what would make your investors happy. Also keep in mind that you never want to “Over Promise, and Under Deliver”, as that is the one of the worst things you can do. This last point applies to many areas in business.