Robert Ochtel’s Blog

An Experienced Approach to Venture Funding

Entrepreneurs, “The Audacity of Hope” is Not a Path Forward for Securing Funding and Ultimate Success

Most entrepreneurs engage in the development of a start-up company to fulfill their hopes and dreams of being their own boss of a successful company and potentially becoming rich. This is the American dream and the primary reason America remains a powerhouse of both job and wealth creation in the world. At the same time, I often hear first time entrepreneurs say “If I only had a million dollars then I would be able to develop a successful start-up company.”  This hope is based on the false premise that money by itself will solve all of the problems of their start-up company.  Like in life, money does not solve your problems, and in business money will not necessarily make your start-up company successful.  Case in point, Teledesic was a start-up company founded in the 1990s to build a commercial broadband satellite constellation for providing Internet services. Teledesic originally planned on building a network of 840 active satellites and received multiple billions of dollars of venture funding only to officially suspended operations in October 2002.  As with Teledesic, the failure of any start-up company is inevitably not a money issue, but the combination improper planning, inept execution, and the inability to get market traction.  The misplaced “audacity of hope” that securing funding alone will solve all of your start-up company’s problems, is really based on an entrepreneur’s unrealistic expectations and unwillingness to do the hard work required to make their start-up company successful.  This article outlines the three things all start-up companies need to do on their path to securing funding and to ultimately make themselves and their start-up companies successful.

Dare to do Business Planning to Facilitate Funding Success

The most important thing an entrepreneur needs to do before they write their business plan and then go out to engage potential investors for the purpose of securing funding is to engage in business planning.  Yes, you need to first begin your start-up business by doing the appropriate amount of business planning.  Business planning, as investors know, is what differentiates successful start-up companies from unsuccessful start-up companies.  In addition, this is where most entrepreneurs fall short.  There are two primary reasons for this, including the following:

  • Entrepreneurs either chose to ignore, or lack the desire to put in the required effort to do business planning. They do not want to do the unavoidable hard work on their way to developing an investor quality business plan, including, the due diligence, research and overall planning that will ultimately define their start-up company.  This lack of desire to do this hard work will ultimately hurt you and your start-up company. 
  • Entrepreneurs do not have the proper backgrounds or do not have an understanding of the importance of business planning in the road to developing an investor quality business plan. In this case, again, a lack of knowledge can hurt you and your start-up company.

Whatever their underlying reason, entrepreneurs need to understand that the business planning exercise is where all of the required business plan details are formulated, developed and finalized.  Business planning is where you acquire the required knowledge regarding your proposed business proposition.  From the target markets, to competitor positioning, to the projected financial returns, this is where you become an expert in both your product offering and your business. By not engaging in the required business planning, in the near term, you will not impress your investors with the knowledge required to secure funding.  In addition, in the long-term, not knowing your competitors or the markets will not allow you, as an entrepreneur, to maximize the return on investment for your start-up company and for your investors. Therefore, dare to plan, as it will provide you with the necessary knowledge to secure funding and facilitate your start-up company’s success in the market.

Flawless Execution will Drive Success

There are many, many things that need to be accomplished for a start-up company to be successful.  In all cases, for any given start-up, there are too many things to do and not enough time to do them.  This is why the focus on flawless execution will help drive your start-up company to success.  Focusing on executing at all levels, and across all disciplines of your start-up enterprise is the lynch-pin that will drive success.  Therefore, as an entrepreneur, you need to properly map out your targeted, significant milestones and then hit these milestones with flawless execution.  Time is everything for your start-up company, and making sure that you execute in a timely manner will drive the ultimate success of your start-up company.

Potential venture investors also necessarily want to see flawless execution and that you are hitting your milestones in a timely manner.  This ultimately increases the value of your start-up company. In addition, nothing provides investors with more confidence in a start-up company’s management team than the timely execution of significant, value added milestones.  This is a big differentiator for start-up companies. As most investors know, for start-up companies, everything always takes twice as along and twice as much money.  Hence, the lack of execution, wastes both invaluable time and investors’ monies.  Therefore, clearly define achievable and significant milestones and then work diligently to execute and deliver.  This will impress investors and at the same time drive your start-up company to success in the market.

Market Traction a Final Key to Success

Achieving market traction is your start-up company’s final key to success.  Remember you are not in business to just to develop an interesting and unique technology, product or service offering.  You, as the entrepreneur of a potentially successful start-up company, are in business to acquire paying customers. Therefore, securing paying customers and achieving market traction early is a key to any successful start-up company.  To achieve this market traction means that you need to call and then engage with customers early. They need to know that your start-up company is out there in the market and that in addition you offer “value” to their end market application. 

Securing customers and acquiring early market traction, even before securing funding, is often where most start-up companies fail.  They have done their planning, have executed flawlessly, but they often fail to engage with their target customer base and secure customers.  This will not impress your potential investors.  One of the first questions these same investors always ask is whether you have any customers or interested customers. If your answer to this question is that you do not have any customers, then they will want to know who you have talked with and then determine their interest.  Remember investors are risk adverse by their nature and securing market and customer traction early goes a long way to addressing their risk tolerance and ultimately securing funding. This is especially true in today’s tough funding environment. 

Finally, as an entrepreneur,  you need to remember investors need to know that you have a product offering that provides “value” to the market and has the ability to secure customers, and quickly.  Venture investing is all about achieving the highest return on investment in the shortest period of time.  Acquiring paying customers early is the only way to achieve this objective.  Investors know this and therefore they necessarily will focus on your start-up company’s ability to acquire customers and achieve market traction in a timely manner.

“The audacity of hope” is not the path forward to securing funding, nor is it a key to success for you as an entrepreneur of your start-up company. As outlined here, doing the appropriate business planning, executing flawlessly, and then securing market traction are the best avenues forward in securing funding and achieving success for your start-up company. By addressing these three items, you are on the appropriate path to fulfill all of your hopes and dreams through the development of a successful start-up company.

This information was taken from Robert’s new book: “Business Planning, Business Plans and Venture Funding – A Definitive Reference Guide for Start-up Companies”.  Available at  For more information on the book go to

August 3, 2009 - Posted by | Business Planning, Business Plans, Customers, Execution, Market Traction, start-up, Venture Capital, venture finance, Venture Funding


  1. Glad I came back to this site some new very interesting items which I wanted to know more about. Great work on your site.

    Comment by best professional camera | August 6, 2009 | Reply

  2. Robert – I find your articles highly interesting and very useful, every one is great reading for investors and investees alike!

    Comment by Sandy Robertson | October 7, 2009 | Reply

Leave a Reply to best professional camera Cancel reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: