Tag Archives: investments

7 Things My First Date Taught Me About Raising Capital

About how I felt on my first date

Ahh yes, butterflies in the stomach, sweaty palms, emotions at the tipping point with apprehension, and way too much cheap cologne. As you are waiting in the foyer you think to yourself, “I’ve been in this situation before, but where?”, and then it clicks; “Oh no! Its like I’m reliving my first date all over again!”. Just as soon as that frightening epiphany shatters any thread of confidence that remained, the doors open and you recognize the hurried and intimidating face from the LinkedIn photo of your first prospective investor.

Speaking from my own experience, this narrative accurately describes my first investor meeting. I was in way over my head, hadn’t prepared myself correctly, and was sick with apprehension. Luckily, the investor was kind enough to give us feedback on our presentation and agreed to a follow up appointment. If only dating worked out that way!

First dates are famously amongst the most awkward moments in all of our lives and one that we are usually grateful not to have to relive. The reason? Because it is almost certainly a failure of epic proportions. But as entrepreneurs, we know and are frequently reminded to learn from our failures, fail fast, and apply what we have learned.

So with that in mind, I have compiled a list of the seven things my first date taught me about raising capital.


1. Be Prepared

No, I don’t mean using your Dad’s aftershave, getting a rose, and practicing your into over and over in front of a mirror. However, what I mean by be prepared follows the same principle. While smelling like Brut and having a rose in hand may not hurt your chances at getting a follow up meeting, it will not get you any closer.

Prepare yourself by knowing the problem your business solves, how it solves it, what its strengths, weaknesses, opportunities, and threats are, and how it is going to make you and the investor money. Know your market back to front, and perhaps most importantly KNOW YOUR INVESTOR! Be honest, you facebook stalked did your homework on your first date, so why not do the same with the person who may very well fund your venture?

2. Don’t Over Prepare

Wait a second, didn’t I just spend 2 minutes of your time talking about the importance of preparation? Yes, but as with all things, moderation is key. The truth is, you can never be completely prepared for what may happen on your first date or the many questions your investor may have. Don’t let an obsession with preparation turn you into a data vocalizing robot, and most importantly, be ok with the fact that you are not prepared to answer everything and that you may have to get back to your investor on a certain question.

3. Be Yourself

Building off of item number two is the always important motherly reminder to “be yourself”. In dating, the pressure to be somebody you’re not is almost impossible to ignore, but it is even more difficult when meeting with investors who have ten times the experience you have, and chances are, they could do a better job at building your business than you.

But listen to your mother! Be yourself, because relationships, like investment partnerships, are taxing, long, and bring out your true character. More importantly, however, is the fact that decisions, yes, even large scale financial decisions, are made on emotion and instinct. If you are hiding your true character, you make it impossible to connect on an emotional and instinctual level.

4. Its Not Rocket Science

Adding to number three, investment isn’t rocket science. The pressure to make your first date like you is as sure a backfire plan as any, and many times we forget that relationships are forged when two people simply like each other enough to share their life with each other.

While you may not be sharing all aspects of your life with your investor, you will be intimately involved in all things relating to even the most minuscule and complex issues of your business. While some of these issues may be complicated and over your head, it is important to remember from the get go that you won’t be working on any complex issues together if you haven’t first taken the time to get to know and mutually respect each other. So relax! Initially, forming a relationship with an investor is done the same way as any other relationship.

5. Don’t Rush It

We are all guilty of this, especially in the hormone filled world of dating. Planning what color the nursery will be for your child when working up the courage to say hi to the person you want to date might be a little much, and is sure to make you a nervous and twisted mess.

When first reaching out to an investor, rather than asking them if they would like to invest, ask to take them out to lunch or have coffee. Get to know them, find out what makes them tick, how they got to where they are now, and where they plan to be down the road. Not only will you learn from what they have to say, but you will also get a solid idea of whether you want to establish a relationship with this person.

You would never propose marriage before going on a date, and so it is with investment relationships. Take your time, and let things evolve naturally.

6. Think Long Term

Although it may seem that I am contradicting my earlier point, let me remind you that the body cannot go where the mind has not already gone. If while on your first date your date mentions that he/she has occasional violent fits of rage and has 25 cats that he/she calls her children and dresses up in themed Holiday costumes, you may want to reconsider the outcome of the relationship; unless you like violence and cats. If that be the case, then Eureka!

My point is, we should always be paying attention to the present in relationships and analyzing whether the current trajectory is in line with our ideals. We would never get married to somebody we dislike, and similarly, we should never establish an investment relationship with somebody we don’t like. Live in the present with your eyes cast towards the future, and don’t be afraid to cut things off early. Remember, fail fast.

7. Follow Up

Finally, perhaps the most important point. Let’s say you just had the first date of your life. You share the same interests, didn’t drool on yourself, and your date didn’t snort when they laughed. The last thing you would want to do is to drop your date off without agreeing to see each other again soon. If you do, you may end up texting later that night, and we all know where that can lead…

Where was I? Right, following up.

So when your fantastic first meeting is coming to a close with your prospective investor, DO NOT forget to set a follow up appointment. When conversing, keep track of to-do items on your end or questions to find an answer to and tell your investor that you will have those things taken care of by next week and that you would love to go over those with them at that point.


Don’t Worry, You Got This

So if you could take one thing from this, it would be to relax and realize that you have been doing this your whole life. From your first friend on the playground, to your first date, to your first investor. All of these relationships are established on the simple fact that two or more people find it enjoyable/beneficial to associate together. So relax, put your trust in your preparation and enjoy making a new relationship that will provide you the capital you need to make your entrepreneurial dreams come true.

Hello everyone! I hope you all enjoyed this informative, entertaining guest post from my friend Jonathan Lee, CEO of He has put in extensive time working with investors to get the app in the works. He’s a gentleman so he didn’t mention this in his article, but is one of the top competitors in the Vesto competition to win $100K. If you enjoyed this article please take a second to vote through this link, Vote,to help him out!Voting ends June 21, 2013. Below is a video that explains their mission.

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Posted by on May 28, 2013 in Uncategorized


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Penny Stocks? That’s the Best You’ve Got?

I just don’t get it. When I logged on to my computer this morning I opened up my browser and the first thing I see is “How thousands of people are making Fast Money in the stock market.” I wanted a good laugh so I opened the link. The article that opened was titled Penny Stocks Can Mean Huge Returns – If You Know The Right Ones To Buy. When I was 15 I would have loved this article. Now that I’m a little older, a little more educated, it just makes me mad. Here we are in the middle of horrific financial times: we are losing homes, we can’t retire when we plan on it, and we still can’t find jobs (or we took a huge pay cut). At this point in time we can use all the help we can get when it comes to investing, but instead of assisting us by showcasing valuable information they feed us crap!
I think the title says it all. Penny Stocks Can Mean Huge Returns – If You Know The Right Ones To Buy. ANY stocks can mean huge returns if you know the right ones to buy. Heck, I can play the lottery and get colossal returns if I know the right numbers to pick! I love the example they used in the article to help sell their idea. “Now imagine if you bought 20,000 shares of a penny stock at half a cent a share (which would cost you $100), and it goes to a dollar next week…” To that I say “Now Imagine if you bought 20,000 shares of a penny stock at half a cent a share (which would cost you $100), and it stays like that for years so your $100 is tied up. Meanwhile, you lose your job and can’t afford to eat. You try to sell your shares to get that $100 back, but the bid/ask spread is so far apart you end up only getting $20 back!” You might think both scenarios are unlikely, but I think the second is a lot more likely than the first.
Just in case you didn’t know, the bid/ask spread is the difference in price between what someone is willing to buy the stock for and what someone is willing to sell the stock for. It doesn’t play a big role with most normal stocks, but it plays a huge role in penny stocks. If you have a stock that is said to be worth $.01 but people are only willing to pay $.005 for it, you can’t sell it unless you take the lower offer. It works the other way around for buying penny stocks.
With our current economic condition it’s more important than ever for us to be careful with our personal finances. We all want a miracle, but penny stocks aren’t the answer. If it was that easy, everyone would be doing it. It may seem like $100 isn’t that much money. It might be worth the risk to make “fast money”, but if we thought like that all the time we’d be broke. If I haven’t changed your mind about penny stocks do a few things before you invest in them: 1) Look up a few, 2) Check their bid/ask spread (you can use yahoo finance), and 3) Watch them for a while. If you’re still into it, go for the gold.


Posted by on March 8, 2012 in Uncategorized


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Stop Paying the “Dumb” Tax

Many of you may already be aware of the term the “dumb” tax, but until last night, I had never heard of this concept. My supply chain management professor was going over shipping processes (which can be extremely complicated and boring). He mentioned that it’s important to know what you’re doing so you don’t make a mistake and pay the “dumb” tax.  According to him it’s a real estate term used for someone that is new to a process. They make a mistake, which loses them money, and therefore they are taxed. If they would have been better EDUCATED on the topic they could have avoided the extra tax.

Now I thought this concept was hilarious. It may be a little insensitive, but I loved the name. The dumb tax, HA. What makes it even funnier, I can look back and recall many times I have paid this tax. I mentioned a few examples in my blog post 4 Mistakes I’ve Made So You Don’t Have To. Almost every transaction I made when starting in the stock market could be used as a perfect example of the dumb tax. The one thing that really stands out to me though, is when I bought my first car. I started out by only wanting to spend $5k on a car. Once I saw I couldn’t get much for that I pushed it all the way up to $10K. I knew I wanted something all-wheel drive, but I wasn’t really sure what else to look for (or avoid). I ended up deciding I wanted a Subaru WRX (turbo). Once I put my mind to it, I had to have that car. In my area, Reno-Nevada, there weren’t many WRXs around. When I finally found one I was so excited I rushed to go buy it (private party). I checked her out. She looked nice enough; after all she was a WRX. So I bought her! Seriously, I worked just like that: I looked at her and two minutes later I bought her. When I look back I wish I could yell “YOU IDIOT! GET THE CAR CHECKED OUT AND DON’T PAY TOP DOLLAR!” I rushed, and I paid the dumb tax big time. I was new to the process of buying a used car, and instead of learning about it I hurried through it and paid the price. After I bought my WRX I found out she needed at least $3K in work done to her within the next 10K miles and she needed new tires. So I ended up paying $14K for a car that was maybe worth $9K. I wish I would have taken the time to educate myself instead of taking a kick in the shorts.

Since the car debacle, I’ve learned a lot about the importance of having patience. When you make a $14K mistake it’s bound to teach you something.  Whether you’re a new investor or buying a new television service take the time to educate yourself. If you’re unwilling to do that then find someone you trust who knows SOMETHING about the topic. I think it’s funny how we all complain about taxes, but the amount of a single tax can be minuscule to the price you pay for paying the “dumb” tax. From now on I’ll take my time to learn about a topic before I make a purchase and skip the dumb tax all together.  

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Posted by on March 6, 2012 in Uncategorized


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Stocks- No Such Thing as Overvalued

With all these tech companies going public (LinkedIn, Pandora, Yelp ect.) I’ve been hearing the term “overvalued” a lot lately, but what does that term really mean? When someone says a stock is overvalued it’s important to keep in mind it’s just a matter of opinion. People say beauty is in the eye of the beholder. I would say value is in the eye of the beholder.  If you’ve ever watched the TV show Pawn Stars you’ll see continuous examples of this. A customer goes to the pawn shop to sell their grandmother’s shoelaces that are supposedly worth $1000. When Chum (a character from Pawn Stars) only offers them $5 they get offended and leave. The customer is mad because Chum thinks the shoelaces are overvalued at $1000. The thing to keep in mind is Chum has no idea how much the shoelaces will actually sell for. An item’s value is different for everyone.  This is why valuation is one of the hardest subjects to master.

How do we figure out the price on something if its value is different for everyone? Well, generally we go off its market value. It makes sense to me that market value is equal to the intrinsic value (real value plus outlying factors). An example of this is Yelp’s IPO. The real values of Yelp’s shares were evaluated at $15/share, but as soon as the markets opened the price shot up over 60% and closed at $24.58! This happened because the real value ($15) met with the outlying factors ($9.58) to create the market value ($24.58). I think it’s overpriced, considering they have never posted a profit, but just because I don’t see the value of the outlying factors doesn’t mean they aren’t there. That’s why I hate when people give specific stock picks. They have no clue what a stock is actually going to do. That’s why I think it’s better for people to use their own gut instincts when it comes to buying individual stocks. You might be in tune with some outlying factors that others aren’t.

If someone says a company is overvalued it means that they don’t see what the rest of the market see at that point in time. The real value and the value of the outlying factors are continuously changing. This means the stock’s intrinsic value  is always shifting. There is no way of actually knowing if a stock is overvalued, because it’s impossible know the future of its intrinsic value. There are so many outlying factors at work it’s incomprehensible to know them all. The only way you can even get close to knowing is if you are completely in tune with not only the company, but people’s perception of the company and their products. Anything short of that is pure speculation.

That being said, does anyone else feel like speculation is all we have left when it comes to investing in individual stocks?

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Posted by on March 2, 2012 in Uncategorized


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Forget Those Other Guys- Take Control of Your Own Finances

Can you believe all the crazy things that have happened within the last decade in the financial community? I’ve never heard about so many crooks within one industry; all the scandals have really affected my view on personal finance. I can’t turn on the news without seeing examples of people cooking the books or running Ponzi schemes. These really are unfortunate times. Luckily for us we can help ourselves when it comes to personal finance.

When I was looking up the definition of the word personal, many explanations came up. The one thing they all had in common is the word personal involves one person. I strongly believe that all the corruption in the finance world really shows us that everyone should take a hand on approach when dealing with their own finances. The days of having confidence that other people can take care of your money are over. Finance might not be the most interesting topic in the world (or even close to it), but it is one of the most important. People need to start educating themselves on their own investments and stop trusting others to take care of it for them. No one wants to lose everything because of financial greed. It’s a real life monster that will steal your heart and soul when you least expect it.

I understand it may not appear like an easy task, but you have a responsibility to yourself and your family to take care of your finances. Remember that no one will care about your money as much as you do. You don’t need to go off and start dealing in derivatives and swaps to make money; you can keep it simple and still be successful. I’m not ignorant to the fact that some people will continue to trust the wrong people. The way I see it, you already have enough market risks tied to your investments, so you don’t need to add risk by using an outsider to manage your investments.

For those of you that have no interest in managing your own investments I have one suggestion: Only use fee based financial institutions to manage your money. They have no ulterior motive when they give you advice. They aren’t making a commission by getting you to buy their products, and they won’t hedge their bets against you. I don’t think they are as good as taking responsibility for your finances, but they are definitely better than those other guys.

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Posted by on February 23, 2012 in Uncategorized


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Buy High, Sell Low… Wait That’s Not Right

I’m going to use my blog as a tool to help people understand personal finance. After studying finance in college I realized that it’s an out-dated science. There are some old concepts that work, but there are even more concepts that need to be revamped. This blog will be used in a manner that will help educate readers on the basics of personal finance, while looking at investing techniques to accomplish financial success.

Everyone has heard the term buy low and sell high. It’s interesting to me how everyone knows this general concept, but events like the real estate bubble still occur. This morning I was reading an article called Stock Market Psychology- Why We Buy High & Sell Low by Shibashake. In this article I think they nailed the psychology behind bad investing. I’m going to go over one aspect of the article now; however, I would recommend reading the whole thing.

When you’re young it’s common to make a mistake and then blame it on friend. Your parents might have said “If your friend jumped off a bridge does that mean you should do it too?” According to the idea of social proof, you probably would. Social proof is the idea that if people around you are doing something, you’re likely to rush in and do it too. This relates to investing because sudden high volumes of demand on a stock will inflate the price. This means that you’re more likely to buy this stock even if it’s overvalued. The article makes this seem like a bad thing, but I have a different take on the matter. When I was a teenager Google announced its IPO ($100 a share). I really wanted to buy some, but my dad talked me out of it. As time went on, Google’s share price kept climbing and climbing. I knew I made a mistake not following my gut. My father wanted to save me from social proof, but if you’re able to get on the bandwagon early it isn’t always a bad idea. In fact, it can be a great way to gain big profits. The ideas to keep in mind are that it’s important to protect yourself and understand what you’re doing. If you’re going to take a calculated risk, make sure you set up a sell-stop order. This will prevent you from losing too much money.  You set the sell-stop price, and if the price falls below the set amount it will automatically be sold.

If you decided that you would rather try to avoid social proofing all together (which is what I would recommend to beginners), the article has one ingenious way to get around it: THINK BEFORE YOU ACT! It seems so simple, but we all know how easy it is to rush into a decision. The article suggests coming up with an investment strategy to prevent this. I agree that this is the easiest way to gauge if your investment is well thought out, but I also know that many people won’t want to take the time to do this. My suggestion to those people is to set up a time frame that you give yourself to think about the investment. Unless you’re a big player, a solid investment won’t require a split second decision. Once the time frame is up, go ahead and make your move.

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Posted by on February 12, 2012 in Uncategorized


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