Ep. 192 – The Pros and Cons of Equity-Based Funding

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SIBP-Blog-NEW-5Is equity-based funding really the best option for financing the growth of a startup? For many early-stage companies, trading in a percentage of the ownership for some much-needed cash makes a lot of sense. In other situations, however, the limitations and long-term risks outweigh the rewards. As with so many things in business, finding the “right” answer is really a matter of balancing options and understanding the greater context.

In this episode of the Success In Business Podcast, host and business coach Tom Ryan talks about some of the hidden disadvantages of equity-based finance. As always, Tom is joined by producer and co-host Jason Pyles. Continue reading →

Ep. 191 – Seed Funding: Angel Investment Criteria, Part 8

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SIBP-Blog-NEW-3From an angel investor’s perspective, a startup is only worth investing in if there’s a good chance it will scale rapidly, steadily increasing in value and catching the attention of larger companies and big investors with very deep pockets. When the business has gained enough value to be sold at a handsome profit, it’s time for a “liquidity event,” allowing the angel investor to cash out their equity.

In today’s episode, host and business coach Tom Ryan talks about the importance of an easy “exit” for the angel investors’ business model. As always, Tom is joined by co-host and producer Jason Pyles. Continue reading →

Ep. 190 – Seed Funding: Angel Investment Criteria, Part 7

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SIBP-Blog-NEW-4If there’s one thing an angel investor wants to know before they even consider trading their money for a piece of your business, it’s how you plan to turn that investment into value. This means having a solid plan in place for making the best use of any funds you raise, and knowing the difference between productive uses of funding and needlessly burning through cash. They want to see the maximum return on their investment, and that means you need to have a great plan for turning a small pile of money into a big one.

In this episode, host and business coach Tom Ryan continues his discussion of the basics of seed round funding. As always, Tom is joined by co-host and producer Jason Pyles. Continue reading →

Ep. 189 – Seed Funding: Angel Investment Criteria, Part 6

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SIBP-Blog-NEW-2Startup valuations involve a special kind of calculus for everyone involved, and it’s not uncommon for first-time founders to be overwhelmed. Tiny differences in an investment proposal from an angel investor can have a huge impact — often millions of dollars or huge percentage differences in total equity — in the final agreement. Even when the investment cash is taken into consideration during the valuation can easily turn a seemingly fair deal into a non-starter.

In this episode, host and business coach Tom Ryan talks about the nuances of “pre-money” and “post-money” valuations, and how they can ultimately change the entire nature of an investment relationship. As always, Tom is joined by co-host and producer Jason Pyles. Continue reading →

Tom Ryan’s Four Ps of Sales: Finding the Compensation Breakeven Point

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Four Ps 2016Now that we’ve established how sales compensation works, it’s time to get specific on the dollar amounts. What does a great salesperson cost? How much will it cost you to attract them, pay them what they expect, and deliver the right level of incentive to them on board? More importantly, what does this dollar amount mean as a percentage of each sale?

Let’s take a look at some examples of real-world sales compensation. I’ll be focusing on active selling, where the sales team’s job is to get out there and find prospects, and to turn those prospects into completed sales. This can mean anything from a phone-based process of generating leads and making cold calls, or it can be a field-based approach where the salespeople are engaging prospects face to face. Continue reading →

Ep. 188 – Seed Funding: Angel Investment Criteria, Part 5

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SIBP-Blog-NEW-1Angel funds and other early-stage investors know the odds. For every one company they back that is a breakout success, five or six others will most likely fail, taking their investment cash with them. Two or three other companies they invest in may break even. If those angel groups want to see a profit when it’s time for them to exit, the companies they invest in need to be primed for serious growth.

In today’s episode, host and business coach Tom Ryan explains the investor’s side of the equity agreement, and why their business model means focusing on high-growth startups with plenty of potential buyers in the wings. Tom is joined by guest co-host and producer Natalie Pyles. Continue reading →

Tom Ryan’s Four Ps of Sales: Understanding Sales Compensation

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Four Ps 2016Sales is a tough job. It might not be as physically tiring as construction work, but there are few jobs more mentally and emotionally taxing. Salespeople have to start up conversations with complete strangers (most of whom don’t want to talk to them in the first place), then persuade those people to spend their money. Salespeople may not make the products or build the services, but without their contributions there would be no money coming into the business. If they don’t do their jobs well, everyone suffers.

Unlike typical employees, salespeople need to be given the strongest possible incentives to do their jobs to the best of their abilities, and at all times. As a result, their compensation models work differently from a standard 9-to-5 worker. They need a good reason to dive in headfirst to the potential rejection of a sales call, and they need to have something to show for their work even when they’ve had an off week.

Sales compensation can be a complex topic, but the basic building blocks are easy to understand. There are three basic elements of sales compensation: Guaranteed, variable, and bonuses and incentives. Continue reading →

Ep. 187 – Seed Funding: Angel Investment Criteria, Part 4

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SIBP-Blog-NEW-5Startups have a limited shelf life. From the inception of the idea to the moment it becomes irrelevant, there’s a countdown. For seed-stage investors, this means that any startup worth investing in needs to have a solid plan in place to completely exploit their market advantages, and be willing to do whatever it takes to grow as fast as possible before competitors can find a foothold.

In today’s episode, host and business coach Tom Ryan talks explains why companies with high growth potential take priority for most investors, and why it’s absolutely vital for startups to lock down their advantages. As always, Tom is joined by co-host and producer Jason Pyles. Continue reading →

Tom Ryan’s Four Ps of Sales: The Fundamentals of Sales Pay

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Four Ps 2016Compensation is always a hot topic in the business world. It’s something that both startups and established companies struggle with, and something that sales experts are in constant debate over. It’s a subject I’m asked about all the time in my role as a business coach, and it’s also a practical question I’ve had to take on more than a few times as an entrepreneur.

At the core of all this discussion and confusion is a surprisingly simple question: How much should I pay for sales? Continue reading →

Ep. 186 – Seed Funding: Angel Investment Criteria, Part 3

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SIBP-Blog-NEW-4When you’re pitching your startup to investors, the last thing they want to see is a “solopreneur.” Great companies aren’t built by lone-wolf idea people, they’re built by teams. The more robust and experienced your team, the better the chance that a strategic investment will result in a thriving business and a great return.

In today’s episode of the Success In Business podcast, host and business coach Tom Ryan talks about building the kind of startup team that investors want to see. As always, Tom is joined by co-host and producer Jason Pyles. Continue reading →