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Keys to Venture Success

Luis Villalobos is the founder of the world’s largest angel group (Tech Coast Angels)

He has the following insights on how Angels and Founders can collaborate to build a successful business.
There is a need in many cases to “transform a company” into a great investment opportunity since about 99% of the deals are not appealing to early stage investors  (ie: not really investment ready).   However, experienced Angels with business acumen and are sophisticated at venture investing, can help transform average or good opportunities into great ventures.  This contrasts with the many examples where investors automatically “pass” when they see the smallest concern in a deal.

Key to transforming the company to increase investor appeal in the venture is the need structure the company to –

  1. Set ambitious (but achievable) goals
  2. Recognize the value of great people
  3. Think strategically about how to move the business forward
  4. Have operating accountability
  5. Provide a forum for all Stakeholders to contribute, grow and excel
  6. Understand the importance of quality, timely decision making
  7. Have strong “look ahead” abilities and the courage to make changes accordingly
  8. Create significant shareholder wealth

To do this,  the CEO must have the following abilities  –

Impeccable Integrity : In addition to not disclosing material information, purposeful ambiguity,  lying, stealing, dishonesty, etc., the CEO needs to have the ability to identify problems early and take responsibility to address the issues (as opposed to hiding problems, making excuses, shifting responsibility, etc.)

Knows the Business Model : The CEO needs to understand exactly what the business has to do to be successful and is focused on them  — including the nitty gritty key aspects of product development and marketing, the operation, people, business drivers, finances, industry and company statistics, etc.

Continually Measures : Piggy-backing on the last concept, the CEO is continually tracking, analyzing, and adjusting the key metrics of the business.

Knows how to Connect the Dots : The CEO makes things happen.

Motivational:The CEO can lead and motivate the team, recruit new members, communicate vision, and can execute on the plan.

Focus on Value to the Customer : The CEO needs to ensure the business is delivering high value to the customer while generating revenue and profits for the company.    Importantly, to ramp the venture, it is recognized Customer Satisfaction / Competitive Advantage / Sales  = Success.

November 15, 2007