If someone had spent thousands of hours in the start-up world, particularly in the world of raising capital, would you be interested in what they had discovered? Our guest for today, Mark Modica, is just such a person.
Mark is here to talk about the fundraising patterns he has recognized, what the biggest mistakes entrepreneurs are making when seeking funding, and how to know which type of investor to seek out at which stage of your business. With Mark's catalogue of knowledge on investing and capital raising this is one episode of Grow My Revenue you won't want to miss!
Listen to this episode and discover:
Is all revenue created equally?
How he got an evaluation of $80 million on less than $1 million in revenue.
Do you have to have more customers to get a higher evaluation?
Why raising too little capital is a common mistake.
When should you sell a company?
And so much more!
Episode Overview
The first misconception Mark lays to rest is the idea that all revenue is created equal, something I have said and continue to say to my clients. He explains that it's not so much the amount of revenue or growth as it is your customer base.
For example when he was CEO of Pivot 3, a company in the surveillance market, they grew their revenue in casino market. They could have gone very deep into that market but decided to branch out into other markets so they would have a bigger customer base. They went after clients in industries like airports, transportation, etc. Instead of trying to grow their revenue faster, they grew wider at a slower pace knowing that winning in numerous markets would increase their evaluation.
Some of the other myths Mark busts on today's show are allowing the market to dictate your company's worth, and allowing profitability to be the primary form of evaluation. Rather than allowing the market to dictate your evaluation you have to be able to tell a better story about your company and show the long-term value in what you are offering. Doing so will increase your value in your investors' eyes and allow you to ask and receive more money.
When it comes to evaluations, profitability is the lowest form according to Mark. The bigger a company is the harder it is to show tremendous growth. He breaks it down like this: in the first stage of your company you are creating your brand. In the second stage you are growing your brand, and this leads to the fastest growth. In the third stage you're profitable because you are leveraging your brand.
Discover more at http://www.ianaltman.com/business-cast/
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