How Not To Sell Equity Too Cheap, Too Soon

By guest author Irina Patterson

At our 1M/1M roundtables, we often hear horror stories of entrepreneurs who have sold 25% of their company to investors in exchange for $15,000.

I always find Sramana jumping off her chair when she works with those entrepreneurs.

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How Not To Waste Your Money On Useless Things

By guest author Irina Patterson

Entrepreneurs often say to me, “I love 1M/1M. I’d love to join, but I don’t have $1,000.” Then we talk some more and I find out that they spend $15,000 on building their site without validating their idea. Or, they paid someone $2,000 to write their business plan in hope that it will help them to raise money. Now, armed with this business plan for an unproven business idea they are shopping for investors and willing to pay big bucks to anyone who would help them to accomplish this ‘mission impossible’.

Now, let’s imagine that you want to spend only $1,000 at this stage to validate your idea, develop your business strategy and figure out a plan of action. Let’s say you saved it, or borrowed it, or put it on your credit card, whatever. You have budgeted $1,000 and that’s all you have.

I highly recommend to invest this $1,000 into your 1M/1M education before you spend it on any other business expense. Here is why.

Once you join 1M/1M, go straight through 50 hours of the 1M/1M Curriculum.

After that, you’ll see why it wouldn’t be wise to spend $15,000 on building your site, until you fully validate your idea. You’ll learn all about free and almost free tools that will help you to validate your business idea and find your first customers and/or partners. You’d be very glad that you avoided that $15,000 mistake.

At 1M/1M, you also learn the very thought process behind building a business. So, when it will come to writing a business plan, you will be able to do it yourself. Another $2,000 is saved there.

As you build your business at 1M/1M, you don’t have to worry about where your funding will come from. If you focus on validating your idea and executing following its methodology, the support of the 1M/1M network will connect you to funding sources.

Often, with the right idea, your customers will fund your business. All you should be doing is focusing on learning and building.

That’s it. Take that $1,000 and invest it in your 1M/1M education. Start learning. Start building.

It will be some time before you need to put any additional serious money into your business. All you need for now is $1,000 and a few committed hours each day. The sooner you start and the harder your work, the sooner we’ll celebrate your first $1 million in revenue.

Note: If you are considering becoming a 1M/1M premium member and would like to join our mailing list to receive ongoing information, please sign up here:

1Mby1M Deal Radar 2011: Knowlagent, Alpharetta, Georgia

Anyone who’s ever worked in a call center knows that there’s a certain ebb and flow of incoming calls. Often, during the ebb, call center agents have little or no other work to do. Alpharetta, Georgia–based Knowlagent seeks to minimize the amount of down time call center agents have. >>>

How To Reduce The Infant Entrepreneur Mortality Rate

By guest author Irina Patterson

Over the past year, we have been talking to various investors – VCs and angels, and incubators and accelerators. What we discovered that the entire startup ecosystem is structured to look for and invest in the less than 1% of the entrepreneurs who are ready and fundable.

For example, Highway 12 Ventures, a $75 million venture fund in Boise, Idaho, gets 500 deals a year. They invest in four. That means that less than 1% of the entrepreneurs who apply succeed in getting financed.

One of the Silicon Valley’s super angels, Mike Maples, told us that he gets 7,000 deals a year and invests in 12 to 15. That’s a 0.21% hit rate. The flip side: a 99.79% rejection rate.

The sad story is that there are way too many non-fundable businesses floating around in each community. Those businesses contribute significantly to what we call high infant entrepreneur mortality rate.

Our 1M/1M Program is designed to help those early stage at-risk-businesses to become strong and sustainable by using thoughtful bootstrapping. And for those ideas that are simply bad business ideas, 1M/1M guides entrepreneurs on how to develop better ones.

We believe that the global economic system will perform significantly better if we can help those 99% of entrepreneurs who are non-fundable for one reason or another. 1M/1M Program is designed to empower entrepreneurs regardless of their potential to attract investment.

If you are working with early-stage entrepreneurs, you can use 1M/1M Program to reduce your local infant entrepreneur mortality rate.

Here is how: 1M/1M supplies the methodology, the curriculum, the connections. Your organization provides your local entrepreneurs with community support. We see this as a powerful synergy of combining resources, without wasteful duplication.

We see it as an example of truly democratic, distributed capitalism 2.0.

Note: The 1M/1M team has invested significant resources to engage with and understand the challenges of the Incubator industry around the globe. You can sign up for our opt-in mailing list to get this information via email on an ongoing basis.

1Mby1M Deal Radar 2011: Cellit, Chicago, Illinois

With the advent of smart phones, the mobile marketplace has grown by leaps and bounds. People send emails, make purchases, or update their Facebook statuses with their cell phones as much as if not more than they use them to make phone calls. Today’s consumers are  more mobile than ever before, and reaching them is an ongoing challenge for marketers.

Cellit is a $5 million, profitable mobile marketing platform provider based in  Chicago, Illinois, that allows companies to send text and multimedia messaging  service (MMS) messages to their customers. These mobile campaigns act as a  mobile customer relationship management (CRM) tool for retailers, restaurants  and other companies that want to leverage mobile technology to increase customer engagement.  Cellit’s Studio campaign management platform helps clients to create interactive mobile CRM programs including coupons, contests, games,  surveys, and alerts that inform, delight and motivate customers and increase  knowledge, loyalty, and spending. The company integrates with client enterprise and point-of-sale (POS) technology and provides an easy to implement, measurable way to maximize the potential of the mobile channel. Cellit’s client list includes IKEA, SUBWAY, Pizza Hut, and Zumiez. The company appeared on the Inc. 500 list of fastest growing companies in 2010.

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The Myth About Seed Funding

By guest author Irina Patterson

We, at 1M/1M, have invested significant resources to dispel the myth about seed funding. We engaged with and interviewed some very successful entrepreneurs who bootstrapped multimillion dollar businesses without outside funding.

Here are just a few examples: Zoho [CEO Sridhar Vembu], RightNow [CEO Greg Gianforte], eClinicalWorks [CEO Girish Navani] ClubPlanet [CEO Andrew Fox] and Finisar [CEO Jerry Rawls].

These entrepreneurs kept building their technology and technology-enabled services businesses and kept validating, until they closed their first key customers. Then, some did take outside money and scaled their business into multimillion dollar companies.

But some of them never took outside money and still own 100% of their multimillion dollar ventures.

1M/1M supports bootstrapping. As long as an entrepreneurs have a place to live, money for food and serious work ethics, we can teach them how to build a multimillion dollar company, block by block. We don’t recommend they waste time looking for seed funding too soon. When they’re ready, we can advise them to do so, but not too early, not too soon.

Note: If you are considering becoming a 1M/1M premium member and would like to join our mailing list to receive ongoing information, please sign up here:

San Francisco Examiner Interview With Sramana Mitra

You can read the San Francisco Examiner’s recent article, “Dot-com veteran Sramana Mitra on the future of technology in India,” here.

Silicon Valley Renaissance with The Menlo Park City Council