Ensure you have a viable product
Having a great product that can generate revenue is the most important thing, says Jeff Dennis, entrepreneur in residence at law firm Fasken Martineau in Toronto. After you’re sure the product has revenue potential, go for it, and don’t let anyone tell you it can’t be done. “Lots of people are going to get in your way,” Dennis says. “There will be others who will think you’re crazy for giving up the job, or taking the risk and taking on the big, bad competition, whoever that is. You’ve got to kind of stay the course, and not listen to the naysayers.”
Invest your own money, time and sweat before asking for capital
A good pitch has to show the product already has some kind of traction, which means that before asking anyone for support put the necessary effort–and your own money–into the project. “The business idea certainly has to have a strong value proposition and, based around that, you’ve put your own money and sweat in behind it,” says Brad Johns, a partner with Yaletown Venture Partners Inc., who is based in Calgary and works with energy and IT entrepreneurs. “Don’t expect anybody to back it if you haven’t done that.”
Keep your legal boring
Use creativity where it counts–in the product and not in the legal structure behind the business, advises James Smith, a partner with LaBarge Weinstein LLP in Ottawa, who frequently works with technology startups. “If you’re creating unique, or highly stylized capital structures, the more unique that structure, the narrower the audience of people that would be interested in being part of that group.” A standard ownership structure is best for attracting potential investors, he says.
Change it up if things aren’t working
Shawn Abbott, a Springbank, Alta.-based partner with iNovia Capital who works with communications startups, says dedication is a must, but only when combined with agility. “In order to steadfastly work toward a goal, you can’t just do that blindly,” Abbott says. “You have to know when to cut bait, when to switch your strategy.” To avoid blind ambition, Abbott suggests having an end goal and working backward to address the biggest potential problems such as getting a technology to work or marketing the product. “When you do the big-risk items first, then you’re reducing the risk faster and your business is worth more along the way,” he says. Too often, entrepreneurs work on the parts of the business they love and leave important unknowns until it’s too late.
Be passionate, or don’t do it at all
Being an entrepreneur means that you’d better be passionate about your idea 24/7, says Jody Steinhauer, founder of Toronto-based Bargains Group, which sells promotional items wholesale. “There is no dividing line, when you’re an entrepreneur, between personal and work,” she says. “That’s why it’s so rewarding. It’s about loving what you do, every moment of the day.” Getting into a business venture just for the money will eventually fail, says Steinhauer, who has won many awards for her business and frequently mentors budding entrepreneurs. “If you’re not dreaming about it and aren’t waking up in the morning having thought of three ways to do something different, then it’s not going to be the right thing long-term.