– What do you need to see in a company before you’ll invest?
– What is the main reason startups fail?
I’m not a venture capitalist but I have started and bought many companies. Some failed. Most succeeded. On a recent trip to my alma mater I stayed with friends and had the good fortune to meet their daughter who was the executive director of a VC firm in the Raleigh, Durham, Chapel Hill, North Carolina area known as the Research Triangle.
I asked her the above two questions.
There has been a lot written on these questions, but I wanted to hear it first hand from someone in the trenches so to speak.
Here were her simple answers: Besides the typical requirements like a good idea and a good strategy, she needed to see a stellar sales person as a part of the team — someone with sales experience and a solid, provable track record in sales— before she would invest. And the main reason why startups fail, unsurprisingly, is not having that great salesperson.
In my article, “8 Reasons Why Startups Don’t Succeed,” I listed this (number 4 on my list of 8), developed from my years as a founding member of the Startup Founders group here in Silicon Beach. I saw a lot of fellow entrepreneurs walk in and out of the doors over many years, and it got to the point where I could tell if someone was going to “make it” after about three meetings.
On selling, I quote Steve Blank the famed Silicon Valley entrepreneur and Stanford University professor who said, “You will find no answers inside your office”. You have to “get out of the building and knock on doors”. Ah, the dreaded knocking on doors.
There are many great resources to close sales. I like, “ The Asking Formula,” by John Baker. It’s a short read, self-published and it lays out a formula to get to yes that’s simple and easy to follow. Everyone who needs to sell should read this book. I also googled, “How do I learn to sell?” My search gave me over 6 billion results. I read the first page, and honestly, there was a lot of great advice and training suggestions. And finally, I wrote an article on how I learned to sell, “Selling encyclopedias door-to-door taught me 5 crucial facts about selling.”
I do believe selling is something many people are uncomfortable with, but one that every entrepreneur needs to do. And if you think you really can’t sell, find a cofounder who can. That’s the advantage of partners; they bridge gaps in our skill sets.
Cynthia Wylie is the founder of Bloomers Island and a published children’s book author at Penguin Random House. She writes about big kid’s stuff like economics & business, too. CynthiaWylie.com