When attempting to start a new venture, the novice entrepreneur must consider one of the most important components of the start-up. How will the business be funded? While the entrepreneur can absolutely obtain bank/institutional loans (if his/her credit is satisfactory), locate an angel investor, or solicit venture capital investors amongst many other options available to them; many entrepreneurs utilize their close network of family and friends initially to amass the capital needed.


     Friends and family members seem like the obvious first choice when soliciting a funder since well, they already know you intimately. It’s not like with a bank where an application for the monies is required, the individual’s credit history or credit worthiness is examined; and there’s still a chance for denial. Conversely, mom and dad or your best friend from middle school are far less likely to turn you down and, unlike the bank, will require very little hurdles (i.e. applications), since understandably they want to see you succeed in life. This was certainly the case with Jeff Bezos, the owner and operator of Amazon and currently dubbed the, “richest man in modern history.” Bezos started his company with an initial cash investment of $300k from his parents. Although he warned his parents and other financiers of the risks associated with investing, he was able to turn his organization into the largest online shopping retailer in the world and make substantial returns on their investments!


     But what if things had gone dreadfully wrong and Bezos had not turned such a magnificent profit? He would then be indebted to each investor (including mom and dad) and may not ever recoup the funds to pay them all back! This brings us to the idea of why friends and family members are oftentimes not the best choices when it comes to funding the startup. While friends and family members may be delighted to facilitate the entrepreneur’s dreams, their moods will quickly change when they are not able to fully comprehend that the business is no longer in operation and you have essentially exhausted their funds, with no way in the near future to pay them back! Because these individuals know the entrepreneur intimately, it can create an irrevocable strain on the relationship that can effortlessly dissolve the bonds that took years to build.


     So, is it worth it? Well, that’s for you to decide. If the entrepreneur should choose to use a friend or family member for funding their venture, they will undoubtedly need to assess the importance of the relationship and the pros and cons associated with accepting the funds. If the relationship is too valuable to be tainted, the entrepreneur should try to locate other sources. Banks, the SBA, angel investors, and a multitude of others resources exist solely to assist small business owners with bringing their ventures to fruition; and that’s without running the risk of losing your favorite Aunt May’s life savings and being uninvited from all future family dinners at her place!



The Ins and Outs of Raising Money From Friends and Family. (2013, September 09). Retrieved October 2nd, 2020, from https://www.entrepreneur.com/article/228103

Jeff Bezos. (2020, September 29). Retrieved October 02, 2020, from https://en.wikipedia.org/wiki/Jeff_Bezos


       Overall, I enjoyed completing this presentation just as much if not more than any of the other tasks assigned in class. There were so many elements that came together which made this experience enjoyable, laughable and “educationally entertaining”, if you will.

       First and foremost, I was able to choose a topic which reflected the type of content I would like to acknowledge in my future books. Additionally, although I liked the story I read, I had to verify the subject matter before presenting the information; and in doing so, I found several inconsistencies that I had to further research. This is familiar to me though, because it is something that I am doing currently in the hopes of presenting the most factual and scholarly material in my own future books.

       Additionally, I was able to delve more into how to film, edit and eventually, export a video to be utilized and shared through social media, email or other channels to attract exposure to my work and future endeavors; while also attracting future target customers and building a fanbase for the organization.

       Most importantly, I was able to collaborate on this project with my 9-year old daughter! Due to the technological savviness of her generation, she was able to show me how to trim and edit the video, as well as add in special effects to attract ideal clients such as herself (in particular, her age range) and their parents and grandparents as well. We were able to work together to research special effects and how they could be utilized to create “aesthetically” pleasing video/content. Largely, I was pleased with our final result and felt that it would be a wonderful initial video to share on social media accounts to produce visibility for the company and help to grow the potential future buyers of the products.


     If you’ve been following along with me over the course of these 8 weeks, you’ll know that understanding structuring was a little challenging for me. Well, now I can add another topic to the “misunderstood” bin! You see, initially I was under the impression (thinking like an entrepreneur) that business longevity was the name of the game. Looking at other small business owners around, I assumed that those who gain the fanbase also gain durability and the permanence that comes along with it (think your favorite hometown restaurant that has been around for years with the same owners). However, I failed to recognize that having an exit strategy that is indeed lucrative, is in many cases one of the best ways to distinguish whether a venture has truly been successful.


     As Amis and Stevenson noted in their book Winning Angels, “in some cases a company will develop a strong following which is attractive to an industry competitor or a strategic partner. The brand name and customer base will have value in and of themselves.” This was easier to understand after reading my fellow colleague’s blog on this exact same topic. Shout out to Elaina Hamilton for further elucidating this concept for me. In her blog, she examined the natural hair beauty company, Carol’s Daughter, whose owner said it was always her intention from the beginning to sell the organization. As Andrew Blair stated in the book, “the exit has to be engineered as carefully as the deal itself.” When Lisa Price initially started the company in Brooklyn, New York in 1993, she knew then that her end goal would be to sell the business. Although she probably didn’t know to whom, through creating a valuable company, with notable investors (she was featured on Oprah where she gained notable financiers such as Will and Jada Pinkett Smit, Jay-Z, Tommy and Thalia Mottola, and former Interscope Records Chief Steve Stoute just to name a few) and outstanding products; Price was able to sell the organization to L’Oreal USA where it remains profitable and is surely still adding shmoney to Price’s bank accounts.


     Obviously, Price like many other entrepreneurs had an idea of what she wanted from her business from its inception. But now everyone is this ingenious. Amis and Stevenson suggest that investors, “help the entrepreneur to begin identifying opportunities for life after their company.” With this in mind, these individuals can plan for their exit and not be disheartened about the thought of someone else potentially becoming the CEO and subsequently managing the business altogether. Another story which helped me to understand how consequential selling can be was a Forbes article which highlights a company Ander Michelena and his associate Jon Uriarte started after noting a need in the market for a ticket selling business in Spain and Latin America. These individuals came up with a company that would later be acquired by StubHub for some $190 million dollars (a 70x plus multiple for the investors involved). As Forbes revealed, “With that kind of cash, you can now choose to do other things – start a company with a much bigger exit or become an investor yourself.” 


     In any event, as this section closes it provided an outstanding quote from one of my favorites Mr. JFK. Regardless of your aspirations as an entrepreneur or investor “only those who dare to fail greatly will ever succeed greatly.” I think I can now remove this topic from the “misunderstood” bin.



Amis, D., & Stevenson, H. H. (2001). Winning angels: The Seven Fundamentals of Early-Stage Investing. London: Financial Times Prentice Hall.

Cremades, A. (2018, November 07). This Entrepreneur Sold His Company For $190 Million After Leaving His Corporate Career. Retrieved June 28, 2020, from https://www.forbes.com/sites/alejandrocremades/2018/11/06/this-entrepreneur-sold-his-company-for-190-million-after-leaving-his-corporate-career/

Hamilton, E. (2020, June 26). Winning Angels: Harvesting. Retrieved June 28, 2020, from http://elainahamilton.com/category/ent-640-50/

P. (2020, June 20). Carol’s Daughter. Retrieved June 28, 2020, from https://en.m.wikipedia.org/wiki/Carol’s_Daughter


     In reading the section aptly named, supporting, in Winning Angels by David Amis and Howard Stevenson, I have come to understand yet another critical component of the 7 fundamentals of early stage investing. Supporting is just what you would deem it to be. Although the section delves into further aspects of support, at its foundation, it is how the angel investor will collaborate with the entrepreneur to ensure a successful venture. While some investors prefer to have more of a hands-on approach and assist with everything from early stage decisions to the hiring and subsequent firing of key positions, there are those who would rather supply the funds and simply sit back and wait on their return. Additionally, somewhere in the middle are the individuals who desire more of a coaching role to better facilitate the entrepreneur with the establishment and routine maintenance of the business. As Amis and Stevenson have noted, “angel investors follow participation roles that are a combination of the needs and wants of the entrepreneur, the company, and themselves.” After learning about the various functions that investors can play, I would rather have someone with more of a coaching responsibility to assist me in making decisions that can ultimately make or break the organization. Winning Angels notes, “the best two ways to figure out how to contribute are to ask the entrepreneur what they want and to do a lot of deals so you (the investor) know what they need.”


     Further along in the supporting section, an excerpt is taken from David Berkus’ book Better than Money, where he remarks, “experience alone is a powerful but very inefficient teacher. She tends to give the test first, then teach the lessons later…It usually takes more than one bad break to bring down a business.” If investors and entrepreneurs are continually monitoring the progress or lack thereof, they can make strategic assumptions that can be used to analyze the sustainability of the organization. Amis and Stevenson observe that investors should, “schedule a meeting each month with the entrepreneurs, usually for a half-day or so. At this meeting, all aspects of the company are examined, plans are re-assessed and modified, and opportunities to support the entrepreneur are identified.” With this transparency, the business is better equipped to outlive many of the initial hurdles and continue its quest for success.


     Despite the fact that entrepreneurs and investors alike will characteristically operate with the best intentions for the organization in mind, there is always the possibility of failure. Amis and Stevenson suggest, “entrepreneurs should handle their potential failure as they would any other potentiality in their business, that is professionally and with contingency plans. Handling failure right will maintain their reputations and many of the investor relationships.” With this methodology in mind, entrepreneurs can, “live to fight another day.” As David Berkus so eloquently puts it when he analogizes landing a plan to failing, essentially, he states, “the only thing to remember then is that any landing you can walk away from is a good landing, cause you’ll live to fly again tomorrow.”


Rest in Peace John Witherspoon


Amis, D., & Stevenson, H. H. (2001). Winning angels: The Seven Fundamentals of Early-Stage Investing.London: Financial Times Prentice Hall.

Berkus, D., & Kelley, B. (1994). Better than Money!: Resource Capital Concepts to Make Your Software Business Fly High! Santa Barbara, CA, CA: Synergy Communications Press.

K [Kyle]. (2012, May 18). Friday Gun Talk. https://www.youtube.com/watch?v=MFwz2ESjfBQ.



Let us never negotiate out of fear. But let us never fear to negotiate.”-John Fitzgerald Kennedy

     When reading through the chapters associated with negotiating in Winning Angels by Amis and Stevenson, I was reminded of this extraordinary quote from Kennedy which sets the precedent for me on the art of negotiations. As Amis and Stevenson put it, “the whole idea of negotiation is that both sides be better off after making the deal.” And, I couldn’t agree more. For me, whether undertaking the role as the entrepreneur or the investor, it is critical to understand every aspect of the deal so that my partners feel they are being legitimately compensated accordingly for their time, efforts and any money they’ve invested in the venture. I want to ensure that anyone who is associated feels that they are treated impartially and will subsequently want to do business should future opportunities arise. That’s the way it’s supposed to be, right?

     Although I understand that emotions have to be separated from business, I will always put a certain degree of feelings into anything I’m doing because I am passionate about my work. Because of this I want to assure my partners that their voices will also be heard, understood, and utilized in the decision-making process. Amis and Stevenson assert, “Just as you seek to advance the full set of your interests, the other side(s) will be doing the exact same thing. You should make assessing the full set of their interests a central part of your negotiation strategy.” They also go on further to note that in most cases, “A way to move stalled negotiations forward is to look behind conflicting positions to understand deeper interests.” In my opinion, when business partners are willing to go the extra mile to satisfy their colleagues it makes for a more gratifying experience once everyone’s interests are recognized, examined, and aligned to see how they can be structured to form the best deal for the venture to be viable, not just in the present but the future as well.

     Amis and Stevenson note, “By giving the entrepreneur their own proposed terms, it should be hard for them to regret it later.” They further expound on this idea perceiving that, “Connecting ownership to performance is a productive way to let them have their pie if they can do a great job baking it.” Although these business relationships should be built on a foundation of trust and integrity, as my colleague Trip Cogburn pointed out, this is not always a possibility. When business partners begin to collaborate on a deal, if they are unfamiliar with each other, this trust has to be earned and this task will not be completed in a day (that saying about Rome is fitting here). With that in mind it is crucial to negotiate intuitively and intelligently to build this relationship and consequently garner the trust that will be essential in making the important decisions down the road that will propel the organization to new levels of success. Amis and Stevenson remind their audience that, “aggressive negotiating does not foster trust.”

     In the event the negotiations cannot be completed objectively, hiring an attorney is always a judicious way to guarantee that the interests of everyone involved are protected and endorsed. If for some reason, the entrepreneur or investor is against this approach then you probably shouldn’t do business with them in the first place. I’ll leave you with yet another sound quote from my ole’ friend John (love this song), “You cannot negotiate with people who say what’s mine is mine and what’s yours is negotiable.” And honestly, who would want to?


A quote by John F. Kennedy. (n.d.). Retrieved June 18, 2020, from https://www.goodreads.com/quotes/804139-we-cannot-negotiate-with-people-who-say-what-s-mine-is

A quote by John F. Kennedy. (n.d.). Retrieved June 18, 2020, from https://www.goodreads.com/quotes/24920-let-us-never-negotiate-out-of-fear-but-let-us
Amis, D., & Stevenson, H. H. (2001). Winning angels: The seven fundamentals of early-stage investing. London: Financial Times Prentice Hall.


     Out of each of the lessons we have studied throughout the course in our supplementary reading material Winning Angels by Amis and Stevenson, structuring is probably the most challenging for me to comprehend thus far. While it was somewhat easy to understand sourcing and evaluating; a tad bit more difficult to grasp the process of valuing; structuring is a whole nother’ beast!!! At the very least, structuring is how entrepreneurs and investors arrange the investment deal so that both parties (in some cases) can recoup the fees that have been poured into a venture. Sounds easy enough, right? Well, not so fast smarty-pants!!!

     Although I don’t have any prior knowledge of structuring deals, I know that one day (soon) I will be in a position to be able to do such things and I want to make sure that I’m not being handed the short end of the stick. As Bill Sahlman states in the book, “With respect to the whole deal valuing, negotiation and structuring you have to have had a lot of experience of good and bad deals to know what’s really important in the transaction.” As a novice, I would only hope to have knowledgeable and trustworthy investors like Sahlman to ensure that I’m making the right decisions not only for myself but also for the business and those who have invested their capital to back my dreams. As Amis and Stevenson put it, “Winning investors make sure the entrepreneur is going in the right direction.” Following the advice of other angel investors, the authors suggest making a monthly report to provide transparency and accountability an integral part of the investment agreement so that stakeholders are consistently aware of what’s going on with the organization. While investors may not have the time to hold the entrepreneur’s hand through every single decision, they can be made aware of these decisions through monthly reporting to better ascertain how the company is progressing and what may need to transpire to ensure future successes.

     Whereas structuring seems easy enough, it’s when you get into how the financiers would like to receive an ownership stake that things start to get tricky. For instance there is common stock and preferred stock (click here) for a better understanding of both! And, as if that’s not confusing enough, there are even convertible preferred stocks (click here, again)! Not to say, I told you so…but I told you.

     Amis and Stevenson advise that, “in structuring, simplicity is best to maximize the chances of entrepreneurial success.” They go on further to expound that, “complicated structures create more work and less flexibility down the road.” It is certainly important to note that here is an area where seasoned investors can unquestionably take advantage of inexperienced entrepreneurs. While we have previously discussed how dishonest entrepreneurs can prove detrimental to an organization, it is critical to recognize that acquisitive investors are equally as damaging. As angel investor Berkus (whom I’m starting to like more and more) states, “In my structures, I have kept them clean because I want to have a trust built between the entrepreneur and me. So I almost always start my investment strategy with a common stock investment and usually try to form it with the founders at founders value….”

     Whether being financed or in a position to invest, I certainly want to model after my man Berkus. I mean surely there’s a way to find common ground so that both parties can feel that they are not being conned. As we’ve discussed previously, this all goes back to the initial relationships that have to be established with trust and confidence in all who are partaking in the deal. Additionally, clear expectations of what each member should bring to the table need to be asserted as well as what each stakeholder will anticipate in return for their time, efforts, and in most cases their dough!



     Amis, D., & Stevenson, H. H. (2001). Winning angels: The seven fundamentals of early-stage investing. London: Financial Times Prentice Hall.

    Hayes, A. (2020, February 25). Preferred vs. Common Stock: What’s the Difference? Retrieved June 10, 2020, from https://www.investopedia.com/ask/answers/difference-between-preferred-stock-and-common-stock/

     Mitchell, C. (2019, June 25). Convertible Preferred Stock Definition and Example. Retrieved June 10, 2020, from https://www.investopedia.com/terms/c/convertiblepreferredstock.aspHayes, A. (2020, February 25). Preferred vs. Common Stock: What’s the Difference? Retrieved June 10, 2020, from https://www.investopedia.com/ask/answers/difference-between-preferred-stock-and-common-stock/


     Prior to this section on valuing, I had very little knowledge about what computations were performed to determine the exact value of an organization. I mean, I know these figures weren’t merely pulled from the sky, but I genuinely had no idea regarding how these calculations were completed. In Winning Angels by Amis and Stevenson, there is a section devoted to explaining several methods utilized to capture the value of a business so that investors can better ascertain the investment that needs to be made initially as well as the returns that should be anticipated in the future.

     Amis and Stevenson note that there are several techniques that are employed to assess the value of a business. My particular favorite was the Berkus method, where Dave Berkus has created his own methodology for evaluating start-ups that he has applied since 1993. Having a consistent approach, I think is key, and will allow the investor a more complete overview of what to potentially expect from the venture financially. As Amis and Stevenson note, Berkus “identifies a clear relationship between price and tangible aspects of the opportunity” to provide a reasonable start-up valuation. For example, for a sound idea, prototype, quality management team, quality board and roll-out sales, each respective category would receive a dollar amount. These amounts would range from $0-2 million; and, when totaled together gives the entrepreneur and future investors a practical figure of what the deal/organization is worth. While there are certainly “cons” to this process such as the semantics behind “quality” as well as the definition of each element, Berkus as well as Amis and Stevenson note that it is a reliable appraisal technique that generally closely calculates value.

     One particular valuation technique that I also liked from this section was the idea of the Pre-VC method. Here, the entrepreneur and the investor avoid all value negotiations and strictly focuses on completing the deal at hand. While this did sound somewhat bizarre, it also reminded me that if these individuals are indeed in a professional relationship where trust and integrity are paramount, then the value of the business and any further negotiations about its worth can undoubtedly be held off until these calculations can be accomplished in a more accurate manner by a professional. As Amis and Stevenson pointed out, “many winning investors focus more on finding good people to work with, letting the more involved contracts and negotiations come later with additional rounds of capital. They believe that the first focus should be on their relationship with the entrepreneur, and not what they can get out of him.” Here, I think back to an example from the book about Jeff Bezos attempting to raise capital for his start-up Amazon. Though many believed that Amazon was not worth the initial investment and subsequently decided not to capitalize on the deal, Amazon has since gone on to be worth $160.47 billion and, “The e-commerce giant has come a long way from its inception as an online bookseller to a retail giant that is disrupting everything from the assumed supremacy of big-box stores like Walmart to grocery store and delivery service models.” Not to mention, Bezos is now the wealthiest man in the world with a net worth of 113 billion, even after a divorce where he transferred $36 billion worth of Amazon stock to his ex-wife. Yes, billion with a B!!!

     So, what are your thoughts? What methods would you use to “value” a deal/organization? Be careful…I mean, you wouldn’t want to pass up on the next Bezos, now would you?



     Amis, D., & Stevenson, H. H. (2001). Winning angels: The seven fundamentals of early-stage investing. London: Financial Times Prentice Hall.

     Anderson, J. (2019, November 19). How Much Is Amazon Worth? Retrieved June 03, 2020, from https://www.gobankingrates.com/money/business/how-much-is-amazon-worth/

     Forbes The Richest in 2020. (2020, March 18). Retrieved June 03, 2020, from https://www.forbes.com/billionaires/

     In the second portion of Winning Angels by David Amis and Howard Stevenson the authors have moved from sourcing to examine another equally critical component in the angel’s investing chain…This time we’re discussing evaluating. Evaluating is just what you would suspect, it’s where the investors are able to further assess a deal to determine whether it would be a worthwhile investment for themselves and/or their syndicate. As my colleague Dustin Brown pointed out in his blog post on sourcing, the reality television show Shark Tank is a popular illustration of what Amis and Stevenson are exploring in Winning Angels. While the sharks are certainly able to source thousands of deals (As of May 19th, 2019 there have been 222 episodes, 895 pitches, 499 deals, $143.8 million worth of invested capital, and nearly $1 billion in company valuations! Click here for a more in depth look into the analytics associated with the show), it is notable to discuss that after these deals are “sourced,” they have to be evaluated further to determine if the organization in question has a product that can be monetized, scaled, and will provide a significant ROI for those interested in assisting with the risks associated with financing.

     While watching Shark Tank, I am oftentimes on edge as if I’m presenting the deal myself in front of the sharks! I cringe every time I hear a shark say the infamous words, “And for that reason…I’m out.” But, these chapters on evaluating have enlightened me and provided me with a more understanding perspective as it pertains to why exactly these sharks step away from the deal. As Amis and Stevenson put it, “given the potential time drain, the best angel investors are careful and strategic in their approach to evaluation.” This makes total sense and can be seen in every instance when the sharks collect information about a deal and entertain the prospect of financing entrepreneurs in their newly established ventures. If the deal does not correspond to an industry where the sharks have experience, they will typically give adequate reasoning and respectfully bow out to allow their associates the opportunity to formulate an arrangement with the entrepreneur without any further interference. Here, it does get interesting when more than one shark offers capital as well as their expertise since, “the quality of the stakeholders says a lot about the quality of the investment opportunity, as well as the likelihood that it will meet future challenges successfully.” For example, on Shark Tank, Mark Cuban is undeniably the most prolific dealmaker with 151 deals completed in the first 10 seasons. He is also undoubtedly one of the most well-known with his ties to several successful ventures, most notably being the owner of the Dallas Mavericks! Unquestionably having Cuban’s stamp of approval as well as business expertise to validate and further a deal says oodles for the budding entrepreneur looking to pave their path to success.

     Most importantly when it comes to evaluating, Amis and Sims note that, “rather than judge entrepreneurs or their business plans as winners or losers, it is most productive to look at the investment opportunity as an interconnected combination of 4 elements: people, context, business opportunity, and the deal. The right combination, which is often manageable means a high-potential opportunity. A bad combination, or the lack of any single element, is a recipe for failure.”


     Amis, D., & Stevenson, H. H. (2001). Winning angels: the seven fundamentals of early-stage investing. London: Financial Times Prentice Hall.
     Crockett, Z. (2019, May 19). Shark Tank deep dive: A data analysis of all 10 seasons. Retrieved May 31, 2020, from https://thehustle.co/shark-tank-data-analysis-10-seasons/




     In ENT 640 (my 5th graduate course out of 10…wooohooo!), we’ll be discussing Winning Angels by David Amis and Howard Stevenson. The first chapter of the book examines sourcing which technically is a fancy way of saying how you should strategically establish and position yourself to obtain investment deals. This tactical planning will allow you (the investor) to best locate deals that will permit you to line your pockets while also building your business and financial expertise accordingly.

So, I’m sure you’ve heard the phrase, “play chess, not checkers” well, that’s totally what sourcing is all about!

     There are several ways to methodically place yourself in a prime position to “source” the best investments out there. By making valuable contacts with the right individuals within various influential arenas and subsequently building rapport with these financially savvy persons, the novice investor can effortlessly acquire information about future ventures that may be lucrative deals or merely learning experiences. Essentially, even if no money is made (I know…I know…who wants to do that?!?) the knowledge acquired grants entrepreneurs the ability to gain a tremendous amount of business acumen since they are able to see fundamentally how various rounds of financing will effect an organization. Furthermore, as discussed in Winning Angels, “future owners can gain valuable intel about what winners and losers do for future opportunities as both entrepreneurs and investors.”

     Sourcing for deals is much like hunting for a job. Early on in my career I had to learn that when looking for employment you have to be precise about what you want. I’m not sure if you believe in a higher power, but I remember praying for a job; and, essentially that’s exactly what I got! A pain in-the-you-know-what! I wasn’t specific about what I wanted and had to deal with headaches that were certainly avoidable. I have since learned that being specific about what you want and being able to communicate these principles facilitates in “weeding out” potentially disastrous predicaments. Sourcing for investment deals works in quite the same manner. When looking for a job, a candidate can utilize friends and family members, online databases, colleagues, previous co-workers and even chance encounters to learn about employment opportunities. Each will produce varying levels of prospects while additionally varying in quantity (i.e online databases); whereas others will yield quality results simply because of their propinquities with various organizations (i.e. colleagues) that may be looking to hire immediately. In any event, sourcing is just the same.

     By networking informally, joining investor groups, making friends with seasoned venture capitalists, and remaining open to chance encounters, future investors looking to analyze and explore the art of investing successfully will be able to find a sourcing strategy that best works for them and will yield a competitive advantage that will generate more deals and hopefully revenue as well.



     Amis, D., & Stevenson, H. H. (2001). Winning angels: the seven fundamentals of early-stage investing. London: Financial Times Prentice Hall.

Week 7 Reflection: Company Building


Although I typically finish a read and can bask in a sense of accomplishment, I completed Stephen Blank’s book, The Four Steps to the Epiphany: Successful Strategies for Products that Win and was absolutely relieved to have simply finished such a tedious read. I’ve said from the start that Blank’s book reads more like an instructional manual, although detailed and thorough, it is rather monotonous providing precise details to implement for every…. single…. stage…. of the startup! Despite the fact that I was a little annoyed by his approach, I choose to see the best in the book; the point that Blank provides a wealth of knowledge for those looking to put their best foot forward into those business “doors” of opportunity.
I am a sucker for quotes, and I must admit that Blank does a remarkable job intertwining some memorable excerpts into his narrative. For example, he starts off this last chapter with,

“The essential thing is action. Action has three stages: the decision born of thought, the order or preparation for execution, and the execution itself. All three stages are governed by the will. The will is rooted in character, and for the man of action character is of more critical importance than intellect. Intellect without will is worthless, will without intellect is dangerous.” Sun Tzu

a critical piece of the Marine Corps War Doctrine, to inform future entrepreneurs that now is the time to implement everything they have learned to build their company (and, that this journey is certainly akin to war!). See, up until now, Blank ascertains that there was no real reason to have a standardized company complete with departments specializing in an array of functions. Although you may have had a few sales or even a few thousand sales, everything you’ve learned now culminates into whether this is a scalable project or whether you should iterate or exit. Up until now, Blank has been persistent that readers have to understand that the product development model that has typically been used for startups should be converted to a customer development model which will better prepare the enterprise to enter their selected market, use the sales of earlyvangelists (those who like to use products early on and will sing it’s praises to the high heavens) and profitably build a mainstream customer base for future success.

Blank maintains that in order to successfully scale the company for the mainstream market, entrepreneurs will not only have to build their customer base, but also, “build the company’s organization, management, and culture to support greater scale.” As leaders, business owners must be adept at not micromanaging their employees; but continue to provide support which places value on the individual and on the company’s vision. Furthermore, managers must continually encourage innovation and creativity so as not to stifle ideas and be able to implement change, when necessary, that satisfies both customers and the market (competition).
In addition, business owners must create fast-response departments to support the climate of learning that will be necessary for the venture to progress into the next phase of building the company. This “positioning” prepares the entity to be ready for the next opportunity since, “success in a startup is all about searching, finding, and exploiting ephemeral opportunities.” As he has preached throughout the book, Blank further maintains that it is fundamental to know what market the company is planning to enter because as he has stated previously, it will determine how entrepreneurs will need to proceed on the playing field. Just like each venture is unique, each market has its own set of guidelines that will need to be adhered to, to mitigate the entrepreneurial risks that ensue. Blank affirms that too many new enterprises construe growth as a call to construct, staff, and scale traditional departments corresponding to a cookie-cutter model (thinking all companies must have certain branches) rather than assembling structure from a clear strategic standpoint.


Blank, S. G. (2006). Four Steps to the Epiphany: Successful Strategies for Products that Win (3rd ed.). Cafepress.com.