This post originally appeared on LinkedIn Pulse on March 2, 2017.
I am a proud MBA graduate of New York University’s Stern School of Business and have had the pleasure of participating in their ongoing initiatives focused on helping aspiring entrepreneurs and venture capital/private equity professionals. I had the honor of serving as a coach and mentor for their $300K Entrepreneurs Challenge, which is both a competition and an accelerator program focused on taking ideas - that have power for great impact - from concept to market. As an alumnus, it’s great to see NYU Stern offer resources like the Challenge to support entrepreneurship and bring innovations to the marketplace that aim to improve our lives.
I am also thrilled to have served as a moderator at NYU Stern’s 12th Annual Venture Capital & Private Equity Conference, for which Verizon Ventures was a sponsor. Throughout my involvement with NYU Stern, I have gained my fair share of learnings that I believe are worth sharing for aspiring entrepreneurs and venture capital professionals.
To kick off my new advice series called “Two Cents,” here are a few tips for those aiming to make their mark in the startup community:
Don’t get stuck in your own head, put yourself in others’ shoes. This is something I have come across quite frequently when being pitched by entrepreneurs, but never really internalized and dissected until I had to mentor participants in the Entrepreneurs Challenge. One individual in particular was focused on helping women bridge the gender gap. She wanted to help skilled and educated working and stay-at-home moms find project-based work so that they can spend time with their families, but also generate income. Her pitch was focused on the difficulty women face when it comes to choosing between their family and careers, and believed that large corporations should lead the charge in solving this problem. While I recognize this struggle and sympathize, I found it hard to pick out a compelling business (not social) reason why a Fortune 500 company should work with her. After all, these companies could easily donate money to women’s causes or establish their own programs to help their female employees. When it comes to winning clients, it’s important to demonstrate the value your product or service can bring to the organization (Click to Tweet). In other words, what can I do for this company that it can’t do for itself? By putting herself in her potential client’s shoes, this participant was able to crystalize the value proposition and then tie it back to her objective of helping women bridge the gender gap. As a result, she progressed to the semi-final stage of the competition.
Raising money doesn’t mean that your venture is a guaranteed success. I love to see entrepreneurs who are passionate about their venture, a key trait I look for when I evaluate companies. A major turnoff are entrepreneurs who believe their company will be the next unicorn simply because they were able to raise a little bit of capital from an investor. To that extent, I have even interacted with entrepreneurs who essentially challenged my sanity because I wasn’t convinced by their idea while others had already placed their bets. During the Entrepreneurs Challenge, I worked with a student who was having trouble deciding on which idea to submit to the competition. The first was a novel idea that I, nor any of my fellow coaches, had heard of before. The second was a mobile payments concept (slightly different than what’s being developed in the market) that he had already raised $100K for from a high net worth individual. The more my fellow judges and I suggested pursuing the first idea because of its uniqueness and the soundness of the execution plan, the more he slanted towards the mobile payments idea because he had already raised capital.
While I would never suggest abandoning an investor’s capital because you have another idea, especially when you haven’t pursued it to the fullest, I don’t believe capital makes a company. Instead, I firmly believe the biggest driver of a company’s success is disciplined people who can execute on a focused plan. Jamie Dimon, CEO of JPMorgan Chase, is often credited with the saying, “mediocre managers cannot make a good idea successful, but good managers can make a mediocre idea successful.” Furthermore, while high net worth individuals are an essential part of the investing ecosystem, they are often the least right. First, they typically aren’t professional investors and have a day job focused on something else. Second, as an angel investor, they are investing in the youngest companies in the startup community, which carry the highest rate of failure. Professional, early-stage venture capital investors have a slightly higher success rate at finding unicorns because they are investing at a later-stage, affording them more visibility into their success. While capital is essential in moving an idea forward, it’s ultimately the direction, discipline, and passion of the team that will take a company across the finish line (Click to Tweet).
University activities - conferences, challenges, and student clubs - are essential in helping students and improving the overall startup/VC ecosystem. Although university activities may be viewed as a mechanism to help improve their students and alumni’s chances at raising capital or landing a VC/PE job, it provides valuable insights into best practices. Based on my involvement in NYU Stern’s startup and VC activities, I’ve identified some not-so-obvious benefits to be aware of:
The Entrepreneur’s Challenge is a great way for aspiring innovators to get into the habit of asking for help and advice. Once your startup is up and running and you have raised some capital from professional investors, you may not have access to coaches and mentors as you do in accelerators. However, your board members and advisors will fulfill this role and are typically one of the most underutilized resources available to startups. In short, leverage them as much as you can beyond just capital. After all, the board and investors have an interest in seeing the company succeed. As such, founders should look upon them as an extension of the management team.
Stern’s VC & PE conference gives students the opportunity to learn what a truly revolutionary startup might look like and one that would interest a VC. They will hear directly from VCs about what they look for in pitches and how to structure presentations. For those looking to become a VC, you will learn about best practices, the differences between corporate and financial VCs, and how they recruit new members of their firm. These events are not only valuable networking opportunities that can advance careers, but they can also help aspiring entrepreneurs grow their business in the future. Relationships built today can turn into investors, co-founders/employees, or business development opportunities for tomorrow.
While the value flow may seem like a one-way street headed solely towards the students, professionals like myself also reap the benefits of participating in university programs and initiatives. These students will work their way into the ecosystem armed with a substantial amount of knowledge, which improves the overall community. From a personal standpoint, helping aspiring entrepreneurs and VC/PE professionals from your alma mater is a truly rewarding experience. It’s inspiring to hear their appreciation and see the impact you have on their journey. It motivates you to give back even more and reminds you to always pay it forward.