What are the most common mistakes you have seen founders make when they start a business?

Prepare for years in advance by study and experience in management, leadership and smaller companies. Read 2–4 books per month. Always be learning. Now, you can build a tiny house alone, but building a significant company requires a team without about 20 different skills that no one person possesses. Many think they can build a skyscraper alone, even without capital! Dumb. A formula for disaster and why 85% of new companies fail. It takes tremendous commitment and perseverance and is always a rollercoaster ride. Almost never a straight, predictable, linear process.

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All entrepreneurs and CEO must be committed to life-long learning. After 31 years as a CEO it gets hard to find and learn new things, but the world changes and there is always something new to learn. Most success comes from great strategy and great team....

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Is it the VC that proposes the amount for the pre-seed startup or it is the CEO that claims what amount is needed?

No good investors would want to invest in a company where the CEO did not have their head around the capital needed. A financial projections and plan is required to even get a meeting with most investors. That said, there can always be some back and forth negotiations. A VC might want to put more money in to scale faster. A CEO wants minimum dilution and to get the valuation up by achieving key milestones like MVP, traction, team building and quantification of customer acquisition costs. All of these reduce risk and hence increase the share and valuation price.

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Pre-seed means smaller amounts and lower valuations because the risks are high. Contrary to popular belie, very few VCs do these stage deals, unless it is a team that has made lots of money for investors before.  Typically, these rounds are $250,000 to $500,000 and done by angel investors. 

You can see my free webinar on preparing your company to raise...

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Should I join a company as a Founder?

If you have to ask this question, you are likely not passionate enough or ready in other ways to do this. The commitment to any startup is likely five or more years. And long working hours that can easily be sixty-to-eighty-hour weeks at times.  As a result, you need to know for certain you would both enjoy the work and are qualified to do the job offered. You also need to do your due diligence to understand the company’s team, finances and chances of success. About 85% of startups will fail. Just a fact.

Asking about a specific company is almost not relevant because the decision process for you is the same and we (advisers here) do not know your background or private information about the company. Nor did you say if this was a promotion, good salary, equity offer, no pay, or whatever. All 100% relevant to any answer.

My main career advice to people is, “Always be learning”. By increasing your knowledge and experience, your market value and options will go up....

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When is the right time to get adviser/board of directors for a startup?

Firstly, these are two very different things. A BOA is usually a domain expert while a BOD member may bring skills like finance, sales, operation, scaling, marketing or other expertise. Too many boards are dominated by investors who only know finance.

The right time to start is yesterday. Usually as soon as you are clear on the mission of the company, which allows you to build out the skills you need on your team. It takes time and patience to develop a BOA member. Few want any formal connection until some value has been built, as the risk is so high, like 90% that the company will go nowhere for a long time. You can work with them informally and work your way up to something more formal when needed.

An informal Board of Advisers (BOA) can be started very casually and develop over time. Start with lunch and discussions to get their input of the business plan. Tell them everything, hold back nothing. Be vulnerable to show you are coachable and will listen to people with other...

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What are the benefits of having a business mentor as an entrepreneur?

There are too many to list individually, but most come from having someone with experience. People often confuse smart with experienced and think they can do anything new well. Science and logic says this is not possible with anything complex.

Few things are as complex as entrepreneurship. Hardly anyone would read a book on flying and hop in a plane alone to fly it. Or try to climb Mount Everest alone. But everyone thinks they can build a new business for some strange reason. As a result, we have an 85% failure rate of new businesses. Ones with coaches and mentors greatly outperform because they avoid the hundreds of common mistakes and pitfalls, some of which can be fatal to a business. These companies where the CEO and executives use coaches even outperform the S & P 500 (mature companies) by a wide margin. They are working on constant improvement of the team, which makes all the critical decisions. And this reduces turn-over, challenges people and gives them career growth...

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What Kind of Return Do Investors Expect When They Invest In A Startup or Small Company for The Long Term?

They say venture capitalist would like a 40% IRR which is an approximation of their ROI, but this is all fantasy based on assumptions that drive the financial projections.  Pessimistic projections can be used to negotiate lower pre-money valuation prices.  So the CEO/Founders are selling the potential while the investors are selling the downside risks.

Angel investors would like to see good returns like this too, but are unlikely to develop their own models to their own assumptions as the amount of work involve is large, and they have no associates to do that work. Angel syndicates on $1M+ deals might do this work though and use their results to negotiate equity prices.

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The reality is few deals ever perform anywhere near their projections as there are too many unknowns that early on to have any confidence. The numbers will be rerun every time there is a learning experience and could go up or down dramatically. Angels are protected...

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What is the entrepreneurial process of creating a new venture?

There are different processes, but the one we teach at The CEO Boot Camp that can almost guarantee success of a new company or product is shown here:

There is a free video course on this page explaining this Entrepreneurial Journey.

How to Raise Millions for Any Company - Online Video Course


Bob Norton is a long-time Serial Entrepreneur and CEO with four exits that returned over $1 billion to investors. He has trained, coached and advised over 1,000 CEOs since 2002. And is Founder of The CEO Boot Camp™ and Entrepreneurship University™. Mr. Norton works with companies to triple their chances of success in launching new companies and products. And helps established companies scale faster using the six AirTight Management™ systems. And helps companies successfully raise capital.

Call (619) SCALE06 or email [email protected] for a complementary strategic consultation.

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Why do Most Start Ups Fail?

I wrote an eBook to answer this exact question, title The Top 20 Reasons Startups Fail and How to Avoid Them. It is based on some research. You can download it free here: top20

I have also created a 3-part video course here reviewing this question from the perspective of what learning and tools are required to avoid these twenty mistakes called The Entrepreneur's Journey here.

Join Live Webinar on 12th April 2022


Bob Norton is a long-time Serial Entrepreneur and CEO with four exits that returned over $1 billion to investors. He has trained, coached and advised over 1,000 CEOs since 2002. And is Founder of The CEO Boot Camp™ and Entrepreneurship University™. Mr. Norton works with companies to triple their chances of success in launching new companies and products. And helps established companies scale faster using the six AirTight Management™ systems. And helps companies successfully raise capital.

Call (619) SCALE06 or email...

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Does a Startup Need Lots of Capital to Become a Big Company

How to start a company with far less capital and also make more money in the process

Venture capital investors need to put BIG dollars to work and have a short time frame (5-7 years typically). THEY need startups to move fast. And, yes, if you have 5–10 competitors getting market share then more invested capital will pay off. However, the smartest founders take another approach and raise less money at higher valuations later.

This alternative is a multi-step market entry strategy where a startup starts in a smaller niche to get some traction, proof of concept and cash-flow. Which they should always try to do anyway. The niche targeting requires less marketing and sales expense and gets higher sales conversion and ROI. Then they expand the target market with more/better product(s) or by selling in other markets (niches or verticals). Building a portfolio of niches and/or product before they go head-to-head with bigger competitors

You do not need $50 million in investment...

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How Do I Start My Own Business From an Idea?

Well, I think the question is the wrong one to ask, really. It trivializes entrepreneurship. Would you ask, “How do I do my first brain operation?” Or “how do I play Carnegie Hall?  Nope!  The question should be what do I do to prepare to launch a startup?

First understand that ideas are literally worthless. The press promoting the concept that an "idea is worth millions" is a problem. Building a company takes many things, and the person with only an “idea” has no chance. It is typically a 3 to 5 year to turn an idea into a business. And that process will require hundreds of ideas, maybe thousands, and many skills on a team.

The truth is, there are hundreds of things you should do and learn before you even think and launching a company. Pretending it is one is ridiculous. And that is why over 85% of new companies fail. The number one reason for failure is underestimating the skills, time, money and team needed. 

When I launched...

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