Free Investment Term Sheet Generator

I came across this on Guy Kawasaki’s blog, which is another great free resource –

It’s a free utility that wizards you through a bunch, and I mean a bunch of questions, then just when you’re about to give up on it, it spits out a free custom Term Sheet for you, in Microsoft Word or other formats.

If you’re not familiar with Term Sheets, and by extension, venture financing, it’s a great tutorial. If you are savvy to them, you’ll appreciate just how robust this free service is.

Go to and you’ll see it on the home page.

Pretty cool.

Get Investment to Grow Your Business, Not Prove Your Concept

Getting investment in your start-up may be absolutely necessary to grow your business. But unless you’re getting “dumb” money from family and friends who won’t ask too many questions, going for investment too early can prove disastrous. Here’s why.

You never want to get investment to pay daily operating expenses, because that means you’re in bad financial shape, and perhaps your business just isn’t that solid. Hey – if you can’t be more critical and honest about your company than anyone else, you’re already in trouble. Furthermore, any kind of sophisticated investor will be able to immediately sniff our your precarious situation, and either because of the large amount of risk, and/or because they know they have you in a tough place, they’ll squeeze you for really tough terms.

If you then start doing much better, you’ll regret the terms at which you made the investment.

Finally, most investors won’t consider investing in a company in tough shape to begin with, so more likely than not, even if you’re willing to accept one-sided terms, you probably still won’t even be able to get them.

If at all possible, boot-strap yourself to the point where you prove your business model.  This includes, but is not limited to your ability to:

Product Companies

-Reliably source your units with acceptable quality and in acceptable time frames
-Warehouse if needed, and ship as desired by your clients
-Make sufficient margin on the unit sales to not only cover your cost of goods but to defray adequate general overhead as well
-Demonstrate that you can obtain enough additional customers at a similar cost to make the business viable

Service Companies

-Reliably obtain and train the necessary number of people needed to provide your service to the first batches of clients
-Make sufficient margin on the unit sales to not only cover your cost of sales but to defray adequate general overhead as well
-Demonstrate that you can obtain enough additional customers at a similar cost to make the business viable

Once you have proven that your business can work, investment, and debt become appropriate and viable methods of financing. Now you’re not asking the world to help prove that you were right, because the world will invariably charge dearly for that. That’s your job, you’re the one who said you could do it. Get investment after you’ve shown that you’re on to something – investors will be happy to give you money to grow, or scale your business, and will also give you terms that you won’t laugh / cry at.

So eat that risk, and then you’ll reap a far greater reward.

A Bad Idea and Good Management is Better than a Good Idea and Bad Management

William Goldman, the famous Hollywood screenwriter, got so tired of people coming up to him and telling him they had a great idea for a movie. When a doctor at a party said “I have a wonderful movie idea. Someone just has to write it,” he replied “That’s funny, I have a great idea for a surgery, someone just has to do the cutting.”

Ideas aren’t worth much.

Yes, that’s right, ideas are worth next to nothing. I know, it seems crazy – as ideas are what innovation is all about.

Sort of. Everything starts with an idea, but unless you put the idea into practice, it’s just an idea. And ideas by themselves don’t go anywhere. Think about how many times you’ve had a great idea, did nothing about it, then saw later that someone else had done it.

Almost every company has changed and adapted from its original idea. The world is about change. It’s great if your company starts off with a killer idea. But unless you have a good management, or unless you’re incredibly lucky, the business will fail, plain and simple. Business isn’t a one time shot, it’s daily execution.

So don’t wait to start your business until you have the best business idea of all time, because you’ll be waiting a long time. A bad team will drive a good idea into the ground. Start with a good idea, and get the best team you can. Strong management will adapt an ok or a bad idea over time, and make it work. They’ll commit to making the business work, not the idea. They’ll adapt as necessary. The real value isn’t in what you provide as a business, it’s the customer problems you solve. Customer problems have a funny way of changing too.

A partner of mine once described a strong idea as “basic with a twist.” That’s about right – don’t be too far ahead of the world, like FedEx was with Zap Mail in the 1980s. Do something that other companies already do, just do it a little better. Don’t focus on what you do, but how you do it.

Now that’s a good idea.