After Bob Rosenschein, Jim Connor held a lecture at the CEED Conference. Connor has been involved in software applications addressing the capital markets for the past 20 years in multiple roles. He has been a CEO, CFO, Treasurer and angel investor and today serves as a Board Director and Treasurer of the Sand Hill Angels, is a Board Director of Liftopia, First Focus Learning Systems, Tabtor, Inc. and the Angel Capital Association (ACA). He talked more about his path from an entrepreneur to the investor, gave a few advices about relations with the investors, but named reasons why someone should become an investor.
He opened his lecture with these words:
World is a global marketplace. We are changing the world in microlevels, and there is a lot of movement.
But, what were Connor’s microlovels? He founded a company named SymPro, which he sold later to JPMorgan. But, that process wasn’t easy or short. He used to work at Xerox Computer Services, where his fascination with PC started. But his department was terminated, so he started reselling Accounting software on PC. They were early adopters of Novell network & Connectivity. For several years things were going well and he invested almost everything he had in new offices. But, the value proposition evaporated and PC became a commodity. That is why they had to pivot to software in order to survive. They slowly rebuilt the business by one customer at a time. They had a challenge from VC funded competitor, but they managed to become profitable in 1998 and by 2001 they were named Top Software in the Portfolio management sector for their industry. Soon the offer from JPMorgan followed.
Entrepreneur Starter Kit
- You need to be good at something.
- Patience & Perseverance, iteration is good.
- Develop a viable business model, very important, confirm that the “must have” from “nice to have”.
- Develop customers, cash flow.
- Find an investor who has a business interest in the area of your expertise or business focus.
He added that the least productive way of finding an investor is sending a whole business plan.
If I was in your shoes today, I’d find connections with the investor. Common interest. People we both know. I would ask them to make an introduction. It’s like dating – you might have to go through 50 or 60 people, but eventually you will find someone with the same chemistry.
What are investor deal killers?
Jim pointed out things that might put off investors from you and your business. That is the lack of integrity; appearing defensive; inadequate justification value; not know the competition; not understanding the financial projections and poor negotiating skills.
For example, saying that you have no competition is like keeping head in the sand. Poor negotiating skills might be a sign immaturity or lack of ego control.
There are a few important skills every entrepreneur needs to have in order to succeed. You need to be able to recruit people smarter than you. Being the best at one product of service and limiting geographical coverage. Being able to help low performers move on to another job or career.
You need to realize that you are not in a popularity contest – sometimes you need to make unpopular decisions. But never let them see you sweat. Whenever possible, have time on your side.
Jim is an investor today and he invites everyone that succeeded in their business to do the same. As he says:
Join the investor club, next best thing to being a rock star!
He considers that investments will advance investor’s brand. It will help him in building additional new businesses. Also, it adds credibility to the brand. Jim thinks that the corporations can also provide the capital for start, and that investment benefits the corporations as well – if they want to be leaders in the future, they need to innovate in their products and services. That is hard to do in the corporation, so they need to cooperate with startups or incubators.