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Friday, 27 October 2017

The Ultimate “Blackhawk Partners” Cheat Sheet for Starting and Running Your Business  

For all of you showing us deals to be funded, I thought of sharing this with you in order to avoid wasting your time and ours. We analyze over 2,000 propositions a year. Time to be focused.
This is by the way a bullet FAQ we share with people looking from us for funding – especially when starting a business or looking for us to invest in early stage companies.
There are many types of business. Depending on your business, some of these won’t apply.

All of these questions by the way come from entrepreneurs – the smart and dumb ones alike- The rules are: I’m going to give no explanations. It is as explicit as can be…. Here you go

1) C Corp or S Corp or LLC?
C-Corp if you ever want to take on investors or sell to another company.

2) What state should you incorporate in?
Delaware.

3) Should founders vest?
Yes, over a period of four years. On any change of control the vesting speeds up.

4) Should you go for venture capital money?
First build a product, then get a customer, then get friends-and-family money (or money from revenues which is cheapest of all) and then think about raising money. But only then. Don’t be an amateur.

5) Should you patent your idea?
Get customers first. Patent later. Don’t talk to lawyers until the last possible moment.

6) Should you require venture capitalists to sign NDAs?
No. Nobody is going to steal your idea.

7) How much equity should you give a partner?
Divide things up into these categories: manage the company; raise the money; had the idea; brings in the revenues; built the product (or performs the services). Divide up in equal portions.

8) Should you have a technical co-founder if you are not technical?
No. If you don’t already have a technical co-founder you can always outsource technology and not give up equity.

9) Should you barter equity for services?
No. You get what you pay for.

10) How do you market your app?
Friends and then word of mouth.

11) Should you build a product?
Maybe. But first see if, manually, your product works. Then think about providing it as a service. Then productize the commonly used services. Too many people do this in reverse and then fail.

12) How much dilution is too much dilution?
If someone wants to give you money, then take it. The old saying, 100 percent of nothing is worth less than 1 percent of something.

13) What if nobody seems to be buying your product?
Then change to a service and do whatever anyone is willing to pay for using the skills you developed while making your product.

14) If a client wants you to hire their friend or they won’t give you the business (e.g. like a bribe) what should you do?
Always do the ethical thing: Hire the friend and get the client’s business.

15) What do you do when a customer rejects you in a B2B business?
Stay in touch once a month. Never be angry.

16) In a B2C business?
Release fast. Add new features every week.

17) How do you get new clients?
The best new clients are old clients. Always offer new services. Think every day of new services to offer old clients.

18) What’s the best thing to do for a new client?
Over-deliver for the first 100 days. Then you will never lose them.

19) What if your client asks you to do something not in your business plan?
Do it, or find someone who can do it, even if it’s a competitor.

20) I have lots of ideas. How do I pick the right one?
Do as many ideas as possible. The right idea will pick you.

21) What is the sign of an amateur?
  • Asking for an NDA.
  • Trying to raise VC money before product or customers.
  • Having fights with partners in the first year. Fire them or split before anything gets out of control.
  • Worrying about dilution.
  • Trying to get Mark Cuban to invest because “this would be great for the Dallas Mavericks.”
  • Asking people you barely know to introduce you to Mark Cuban.
  • Asking people for five minutes of their time. It’s never five minutes, so you are establishing yourself as a liar.
  • Having a PowerPoint that doesn’t show me arbitrage. I need to know that there is a small chance there is a 100x return on money.
  • Catch 22: showing people there’s a small chance there’s 100 x returns on their money. The secret of salesmanship is getting through the Catch 22.
  • Rejecting a cash offer for your company when you have almost no revenues.

22) What is the sign of a professional?
  • Going from bullshit product to services to product to SaaS product. (Corollary: the reverse is amateur hour).
  • Cutting costs every day.
  • Selling every day, every minute.
  • When you have a billion in revenues, staying focused. When you have zero revenues, staying unfocused and coming up with new ideas every day.
  • Saying “no” to people who are obvious losers.
  • Saying “yes” to any meeting at all with someone who is an obvious winner.
  • Knowing how to distinguish between winners and losers (subject of an entire other post but in your gut you know — trust me).

23) When should I hire people full time?
When you have revenues

24) How long does it take to raise money?
In a GREAT business, six months. In a mediocre business, infinity.

25) Should I get an office?
No, not unless you have revenues.

26) Should I do market research?
Yes, find one customer who DEFINITELY, without a doubt, will buy a service from you. Note that I don’t say buy your product, because your initial product is always not what the customer wanted.

27) Should I pay taxes or pay dividends?
No. You should always reinvest your money and operate at a loss.

28) What should the CEO salary be?
No more than 2x your lowest employee if you are not profitable. This even assumes you are funded. If you are not funded your salary should be zero until your revenues can pay your salary last. Important RULE: the CEO salary is the last expense paid in every business.

29) When should I fire employees?
When you have fewer than six months’ burn in the bank and you aren’t getting revenues growing fast enough.

30) What other reasons should one fire an employee?
  • When they gossip.
  • When they don’t over-deliver constantly.
  • When they ask for a raise because they think they are making below industry standard.
  • When they talk badly about a client.
  • When they have an attitude.

31) When should you give a raise?
Rarely.

32) How big should the employee option pool be?
15 to 20 percent.

33) What if one client is almost all of my revenues?
Treat them very nicely. Don’t forget the Christmas gift basket.

34) What’s the best way to sell anything? Show arbitrage: If they pay X now they are buying something worth X * Y. That is the ONLY way to sell.

35) What is the best way to sell anything? Part II: fear and agitation. Get them afraid (the world is falling apart). Get them agitated (this is the only way to stop it).

36) What’s the best way to talk about your competition in a meeting? Use “choice ambiguity” (Google it). Say, “all of my competition is great. I wouldn’t even know how to choose among them.”

37) Should I ever worry about the news or the economy? Absolutely not. The best businesses are started in horrible economies.

38) What happened to all of my friends? You don’t have any more friends.

39) How do I charge more for my services? Itemize as finely as possible and charge for each item.

40) Do I charge per hour or per project or per month? First per project, then per-month maintenance.

41) How do I prepare for a meeting? Know everything about the clients: competition, employees, industry. Over-read everything.

42) What is the only effective email marketing? Highly targeted email marketing written by professional copywriters, and the email list is made up of people who have bought similar services in the past six months.

43) Should I give stuff for free? Maybe. But don’t expect free customers to turn into paying customers. Your free customers actually hate you and want everything from you for nothing, so you better have a different
business model.

44) Should I blog? Yes. You must. Blog about everything going wrong in your industry. Blog personal stories that you think will scare away customers. They won’t. Customers will be attracted to honesty.

45) Should I care about margins? No. Care about revenues.

46) Should I spin-off this unrelated idea into a separate business? No. Make one business great. Throw everything in it. Do DBAs to identify different ideas.

47) Should I hire people because I can travel on a seven-hour plane ride with them? Don’t be an idiot. If anything, hire people the opposite of you. Or else who will you delegate to?

48) Should I negotiate the best terms with a VC? No. Pick the VC you like. Times are going to get tough at some point, and you need to be able to have a heart-to-heart with them.

49) Should I even start a business? No. Make money. Build shit. Then start a business.

50) Should I give employees bonuses for a job well done? No. Give them gifts but not bonuses.

51) If my customer just got divorced, what should I say to him? “I can introduce you to lots of women/men.”

52) When should I give up on my idea? When you can’t generate revenues, customers, interest, for two months.

53) Why didn’t the VC or customer call back after we met yesterday and it was great? “Yesterday” was like a split second ago for them and a lifetime for you. There’s the law of entrepreneurial relativity. Figure out what that means and live by it.

54) Should I hire a professional CEO? No. Never.

55) Should I hire a head of sales? No. The founder is the head of sales until at least 10 million in sales.

56) My client called at 3 a.m. Should I tell him to respect boundaries? No. You no longer have any boundaries.

57) I made a mistake. Should I tell the client? Yes. Tell him everything that happened. You’re his partner. Not the guy that hides things and then lies about them.

58) I personally need money. Should I borrow from the business? Only if the business can survive for another six months no matter what.

59) I just bought two companies. Should I put them under the same roof and start consolidating? No. Not for at least two years.

60) Should I quit my job?
No. Only if you have salary that can pay you for six months at your startup. Aim to quit your job but don’t quit your job.

61) What do I do when I have doubts?
Ask your customers if your doubts are trustworthy.

62) I have too much competition. What should I do?
Competition is good. It shows you have a decent business model. Now simply outperform them.

63) My wife/husband thinks I spend too much time on my startup?
Divorce or close your business.

64) Should I expand geographically as quickly as possible?
No. Get all the business you can in your local area. Travel is too expensive time-wise.

65) I undercharged. What should I do about it?
Nothing. Charge the next client more.

66) I have an idea for an app but don’t know how to execute. What should I do?
Draw every screen and function. Then outsource someone to make the drawings look like they come from a real app. Then outsource the development of the app. Get a specific schedule. Micromanage the schedule.

67) I want to buy a franchise in X. Is that a good idea?
Rely on the three Ds: Death, Debt, Divorce. When someone dies, the heirs will sell a business cheap. When someone is in debt, they will sell a business cheap. When someone divorces, the couple usually has to sell a business cheap. IMPORTANT: even if the trends in the industry are in your favor, you CANNOT predict the future. But you can use the past to help you get a deal. Always get a deal.

68) I have a lot of traffic but no revenues. What should I do?
Sell your business. There’s only one Google. (Well, there are two or three Googles: Facebook, Twitter … )

69) I have no traffic. How do I get traffic?
Shut down your business.

70) Should I hire a PR firm?
No. Do guerilla marketing. Read “Newsjacking” and “Trust me I’m Lying.” PR firms screw up from beginning to end.

71) My competition is doing better than me across every metric. What should I do?
Don’t be afraid to instantly shut down your business and start over if you can’t sell it. Time is a horrible thing to waste.

72) XYZ just sold for $100 million. Should I be valued at that? I’m better!
No, you should shut up and stop being stupid

73) Investors want to meet me and customers want to meet me. Who do I meet if I need money?
You should know the answer to that by now.

74) If an acquirer asks me why I want to sell, what should I say?
That you feel it would be easier for you to grow in the context of a bigger company that has experienced the growing pains you are just starting to go through. That 1+1 = 45.

Friday, 29 September 2017

Capitalism from inside out: How the 99% can build wealth, fight crony capitalism, and restore America's promise 


Ziad K Abdelnour
We are living in turbulent times. Between the aggressive globalization of neoliberalism politics, major shifts in economic power, widespread and frequent acts of terror, nation-swallowing debts, deep-rooted corruption and a slew of other processes tilting the delicate balance of the world system, people are finding it more difficult and stressful to succeed and prosper. Across western societies where strength and stability have been the rule, the foundation of the middle class is under siege as the sometimes subtle and often blatant redistribution of finances and economic opportunities are sent to either the one percent or scattered helter-skelter upon the waves of poor masses growing increasingly more vocal.

In the United States, we are witnessing an almost revolutionary fervor as the voices between nationalists, socialists, democrats, republicans, mainstream media, alternative media and a host of others rise, jostling to make their particular views the most recognized, creating societal ruptures. The polarization between coastal elitists, the labor force and twenty years of partisan politics has divided America. Indeed, it is becoming increasingly difficult to determine what the “truth” is—provided such a thing even exists any longer. The confusion of this trend has been compounded by the wide-eyed Millennials who are constantly “looking for a break” and screaming and crying like starved infants if what they expect is not immediately delivered, along with brooding Democrats of the Trump presidency era. These are the folks that need to wake up and become contributing adults to a society that is in vagrant decline. They need to become entrepreneurial, creating their own jobs and learning from this book new ways to make money in this new economy.

The attacks of September 11, 2001, seemed to act like a proverbial “tick on the clock” which started this whole process into motion, signaling the beginning of the major political, financial, economic and social shifts that have grown to a nearly chaotic fervor today. President George W. Bush began the wheels turning as he mandated a perpetual War on Terror that not only appears to have no end But is actually spreading from war-torn battlefields to urban cities in countries once thought to be untouchable. The large doses of funding that Bush shoveled into the ravenous Military Complexares fed with mounting conflict management siphoning resources.

The financial collapse of 2008 served to hasten the disease of crony capitalism as banks and other financial institutes where shoveled heaping helpings of fiat currency by the Bush and Obama administrations to prevent their demise. Once again, everyday citizens suffered profusely while CEOs walked away with huge tax-payer provided bonuses and the national debt doubled to $20 trillion under the eight years of “Hope and Change” politics of Barrack Obama. Indeed, there existed a massive disconnect between Wall Street and Main Street, stirred and amplified by President Obama. Stock records have been set, but they have done so based on the fluent and intangible policies of the Federal Reserve and not on the solid foundation of real jobs and the profits they produce.

The extreme changes across the board have been quite good for the top echelon who know how to analyze trends, interpret policies and ride out storms using established connections and assets. Such circles tend to benefit from the misery of the masses whom they easily and willingly fleece from their privileged positions. This fleecing has occurred by design – creating an economic system that consists of a closed, mutually advantageous relationship between business leaders and government officials. This system is known as crony capitalism and it operates no less like a well-organized mafia. The mostly unwitting and helpless 99% have no insight into trends or policies nor have buffers to whether such turbulent storms. The everyday citizen continues to lose economic and political ground, ever spiraling into suffering, bleakness and diminished opportunity.

Main Street has been conditioned to follow the lead and advice of the “Big Boys” who build, achieve and profit, and then stand as a beacon of light to show the way to others. This Warren Buffet strategy of buying stock and making money used to produce results for the masses that heeded the advice. However, the world is much different than it was before 9/11. Today, there is the never-ending War on Terror, rising International pressures and destructive social divisions among other trends, such as algorithm predictions and technology trends that have popped up and ruled the day. There is a very real need for a new method and strategy for investing. There needs to be a change from a “do what they say” mentality to one that aggressively seeks to do what they do. With all the sleight of hand tricks and deceptive speech used in the financial world today, it has become critical to economic survival that people no longer heed the words spoken by Wall Street gurus, but instead pay attention to what they are actually doing and follow their lead.

In the midst of this chaos brought about by decades of Bush, Clinton and Obama's politics comes the enigma of Donald J. Trump. I believe it is the first time in the modern era that the man who now sits in the Oval Office has been and continues to be an adversary of the deep state, rather than a tool of it. He is not a part of the establishment and has made obvious moves toward fighting it. The deep state, created in 1947 during the presidency of Harry S. Truman with the creation of the National Security Act in the waning months of World War II, is a root cause of the turbulence we are seeing play out today.

What is the deep state? It is that part of the government that lies beneath the surface and never changes, regardless of which party controls the White House or Congress. Today, it has spread out and become deeply rooted in many aspects of the government, including an intelligence community that has grown into a massively powerful entity taking on a life of its own with access to a host of information about everyone. The people running these departments can use new technology and the data they mine through it to manipulate officials, including the President, policies and all branches of government minimizing the checks and balances between the executive, legislative and judicial branches. Those who go off course from the acceptable agenda are denied information, embarrassed, slandered or otherwise defrocked of power and influence. Donald Trump has fallen victim to the forces of the deep state and he knows it. He also knows he has to stop it. The question is—will he be successful at stopping the deep state before they destroy him?

The United States used to sail a clear course. If all the countries where the solar system, America used to be the sun that they all revolved around. However, its position has shifted drastically over the past two decades and America is today like all the other planets, struggling and competing for that shining place of dominance with the likes of China and Russia. The abuse of power and the divisive politics have reached a tipping point. The abuses have been hidden for so long that if America continues on its current course, the empire of the United States will not be sustainable.

Liberty and justice for all as one nation, powerful, indivisible, with opportunity for all to live the American dream is the reason why my upcoming book “Capitalism from the Inside Out: How the 99% Can Build Wealth, Fight Crony Capitalism, and Restore America’s Promise” was written.  Readers need to understand the current trajectory that the United States is on, how it got off course the past 20 years and how it will lead to chaos and destruction if permitted to continue. A great deal of the collapse of the middle class stems from it being molded into a certain defeatist mindset.  More than ever, everyday Americans need to understand how to open their eyes in order to see the world differently, recognize the new frontier of opportunities and then take that information and effectively build a wealth mindset in the post-Obama era.

This book is intended to reshape analysis to better understand the current political and economic landscape and the policies that are propelling them. Learning how to identify the viable policies that will steer the country toward financial and economic vibrancy and how to support them so that progress can be made for prosperity, opportunity, war on terror, affordable and accessible healthcare, education, urban revitalization, registered immigrants part of the system, safely in the Age of Trump. We are literally on the verge of either winning the day and taking back the sovereignty, authority and prosperity for which the U.S. has been known for decades or collapsing into a one world globalist state of ever degrading muck and mire. The time to act is now.  Reframing the division between the left and the right to be unified and supporting wealth creation opportunity for all.

The 99%—those everyday citizens living and doing business on Main Street USA—are finding it difficult to hold their ground, much less make changes in an ever-changing and increasingly hostile social, political and economic environment. How can you make a difference in a world that is seemingly going mad? What can you do to ensure that the right policies are enacted and implemented? This book provides a roadmap of sorts that will allow you to effectively engage in the political process and hold President Trump accountable for achieving his populist message.

For those who want to see this nation restored to a place of greatness and for those who want to do more than simply survive these tumultuous times, the following information is both necessary and timely, outlining the pursuit of life, liberty and pursuit of happiness in today’s world. People can take the reins of their lives back and make their own decisions toward achieving prosperity and happiness, or they can continue to allow the rich and powerful to make those decisions for them. The problem is that the elite one percent have no concern for the well-being of the remaining 99% whom they just as soon leave wallowing in misery, poverty, and fear. We have been given a real chance to change the course of the nation from one of collapse and ruin to one of real hope, renewed prosperity and regained honor.

Stay tuned to my upcoming book – Capitalism from the Inside Out – An eye opener like you have never seen before



Monday, 14 August 2017

Investing in Art & Luxury Items / With Ziad K. Abdelnour




Investing in Art & Luxury Items / With Ziad K. Abdelnour
Panelists: Dorian Bergen, Colleen Boyle, Laura Doyle, Jason Schoen
Moderator: Ziad K. Abdelnour

The mission of the Financial Policy Council Inc. (FPC), a research think tank and educational institution, is to formulate and promote sound public policy based on the principles of free enterprise and wealth creation as envisioned by the ideals of the American Founding Fathers.

Our goal is to ensure that America, the land of opportunity where freedom and prosperity have flourished, is not derailed by poorly formulated and reactive economic, fiscal and tax policy. In addition, our goal is to retain and reclaim America's leading role in the global economic community. Category News & Politics License Standard YouTube License

Wednesday, 9 August 2017

The Drag Race of Digital Progress… Are You Belted In? - With Ziad K. Abdelnour






Published on Apr 24, 2017
Financial Policy Council – April 7, 2017
The Drag Race of Digital Progress… Are You Belted In? / With Ziad K. Abdelnour
Sponsor: Entrepreneur Award Recipient: Lenny Valdberg, CEO of Vigo
Panelists: Jason Cherubini, Vijay Lakshman, Joe Nagy, Matt Nagy, Richard Switzer
Moderator: Ziad K. Abdelnour

The mission of the Financial Policy Council Inc. (FPC), a research think tank and educational institution, is to formulate and promote sound public policy based on the principles of free enterprise and wealth creation as envisioned by the ideals of the American Founding Fathers.

Our goal is to ensure that America, the land of opportunity where freedom and prosperity have flourished, is not derailed by poorly formulated and reactive economic, fiscal and tax policy. In addition, our goal is to retain and reclaim America's leading role in the global economic community.
· Category
o News & Politics
· License
o Standard YouTube License

The Perfect Storm in Healthcare: What It Means to Investors! | With Ziad K. Abdnelnour







Published on Aug 3, 2016
Presenter: bigbang Health
Panelists: Chris Fey, Adam Henick, Dr. Lev Paukman, Marco Castro
Moderator: Ziad K. Abdelnour - Chairman of Financial Policy Council

Everyone knows that global healthcare systems are dinosaurs. The problem is that most people do not understand how the systems work in order to effect change. On July 14th, experts from healthcare, medicine, and medical tourism will come together for an explosive panel discussion uncovering where healthcare has gone wrong and how to put the power back in the hands of the consumers.

1. Broken Healthcare Systems (What is broken, why?)

2. The 3 Factors influencing the decline of healthcare

3. The rise of Medical Tourism

4. The 3 Factors driving the Perfect Storm in Healthcare -What it means for your family -How you can make money from it

Wednesday, 26 July 2017

The Tech and Software Sector is Close to Eating the World ? | c

Being both an oil trader and financier and tech investor, I am frequently asked about my general views on the oil and tech sectors at large given the ever changing financial and political disturbances out there.
Well for a start, you might think that tech is today in a bubble as a company whose sole product is a photo sharing app in which the pictures get deleted after they are shared just turned down $3 billion.
Maybe...But the reality is that even if there is a bubble in the making there are really no consequences. Unlike the late 90s, technology is now established. If one company blows up, other entrepreneurs will start a new one or join someone else. So If you really think about it, the cost of failure has never been so low, ever.
By the same token, and for the sake of argument, I don't think that the tech and software sector is even close to eating the world.
Read More: The Tech and Software Sector is Close to Eating
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Wednesday, 26 April 2017

GOING TO WAR AGAINST NORTH KOREA – POSSIBILITY, OUTCOME AND RESULT

To make a long story short, I strongly believe that any war between the United States and North Korea would result in the collapse of North Korea’s government and a massive flood of refugees into China and South Korea. This is likely the reason (along with North Korea’s nuclear weapons) why the US has not toppled the North Korean government yet.

In fact, it’s very likely that behind the scenes both South Korea and China have been sending North Korea subtle signals that regime change is not a desired option. This would explain why the North Korean government hasn’t collapsed considering that it doesn’t and hasn’t been meeting the needs of its people.

Who would win such war?

It all depends on what you mean by “winning”, the circumstances in which the conflict begins, and whether North Korea uses nukes/WMDs.  If we ever engaged North Korea, I don’t see the U.S. using nukes because our conventional weapons are effective enough.

First, discussing the circumstances, if North Korea attacked the South, it would take longer than if the South/U.S. attacked North Korea.  The reason is that you would have to stop their offensive before moving back north, account for casualties/battle damage, etc.  If the South/U.S. attacked the North, we would be able to neutralize a lot of their military power right off the bat, which would make things go much more quickly.

If intelligence allows for forces to mobilize early before the conflict begins, it would be faster than if they attacked by surprise and we had to spin up logistics.
If North Korea used nukes or WMDs, it would significantly complicate things both militarily and politically.  It could be slower due to significant damage to our forces, or it could be much faster due to the rest of the world coming together to “take care of” North Korea.

One important factor… drones. Drones can indeed make their carefully dug in positions very vulnerable, and judging by how they are building up their military, that’s a big problem for them.  I think we would also easily maintain air superiority.  Given that it’s a small, extremely mountainous country, it would seem to be relatively easy to use drones and air strikes to completely disrupt their supply lines.  There simply aren’t that many places where rail lines or significant roads can run, especially across the river.  And we have become very good at using drones, helicopters and so forth to spot units moving and take them out from a distance.

I think there is a not insignificant possibility of North Korean collapse once the war goes on for any length of time.  They may have many men under arms, but they cannot feed them in peacetime, much less in war.  If they can’t accomplish a blitzkrieg and get at South Korea’s food supplies they will quickly run out of food.  They also have very limited supplies of other things because they have been at famine levels for years.  Outside of a few zones where they cooperate with the South (and maybe China) their industrial base is small and aged.  They have few natural resources and even now have less ability to exploit them at the level that a modern industrial nation can.


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