I came across this great video on FastCompany, one of my daily morning reads. It clearly states why most mission statements fail. Too MBA’ish, too corporate, not enough clarity and integrity. Have a watch.

The last couple of years, I’ve been building up a portfolio of companies that:

• Have a distinct offering within three niche markets
• Have the potential of being cash flow positive in a short amount of time
• Have little or no substantial debt
• Target professional women or do something to support women in the economy
• Are run by someone who understands their markets and has the horsepower to get the job done
• Can the overall idea, or any of the components, be licenced?

In exchange for an equity stake and preferred position on dividend payout, I leverage capital. Financial capital, intellectual capital, human capital, systems, networks, and know how. This type of business is often called Venture Capital. This is wrong. The work I do in this type of model is Angel Investment. People use the terms back and forth so I thought I’d lay it out once and for all. After completing 25+ of these deals, I thought that I would take a moment to illustrate the difference.

Venture Capital is someone like me using a pool of money owned by others, and leveraging an equity stake in a company. This is done to grow, flip, transform, or be amalgamated into something else. The money is almost always held in a ‘fund’ that investors put their financial resources into.  Think of it like a capitalist co-op.   There’s a lot more to it, but that is the simple definition.

.Angel investment is an individual like me using my own capital, knowledge, contacts, ideas, systems, etc. to take an equity stake in a company and co-pilot its development into a profitable model. Dragon’s Den makes itself out to be Venture Capital, but it is really Angel Investment. I found a great reference on WIkipedia that lays it out:

Angel investments bear extremely high risk and are usually subject to dilution from future investment rounds. As such, they require a very high return on investment. Because a large percentage of angel investments are lost completely when early stage companies fail, professional angel investors seek investments that have the potential to return at least 10 or more times their original investment within 5 years, through a defined exit strategy, such as plans for an initial public offering or an acquisition. Current ‘best practices’ suggest that angels might do better setting their sights even higher, looking for companies that will have at least the potential to provide a 20x-30x return over a five- to seven-year holding period. After taking into account the need to cover failed investments and the multi-year holding time for even the successful ones, however, the actual effective internal rate of return for a typical successful portfolio of angel investments is, in reality, typically as ‘low’ as 20-30%

When an Angel investor gets into play, not only could they waste their time, money, and systems, but they risk damaging their reputation with too many failed companies. That’s why Angels consider the personality as much as anything else when determining fit within their portfolio. A good person that is bad at business can be fixed; a bad person that is good at business is cancer to an Angel Investor.

Due diligence is a part of business that Angels do to try to weed out the good ideas by bad people/bad ideas by good people.

For existing businesses, I look at:

• financial modeling
• exit opportunity analysis
• research of the industry
• validation of market size
• competitive analysis
• site visits, and etc
• As a rule, I don’t buy debt as an Angel unless the model is making positive cashflow

For new businesses, I look at:

• target market identification and size
• competitive analysis
• competencies of the people involved
• industry trends
• cost of penetration
• the personality of the person with the idea (Can they get it done? Can they survive while the company is growing? Are they committed? Are they an employee (mindset) pretending to be and entrepreneur? Will they listen to the advice you give them or are they going to fight without knowing?)

At the end of the day, it is a gut cheque (using your intuition). Does this company make sense at this time, with this person, in these markets, following this plan? If all lines up, I pull the trigger. If I’m not sure, I start to pump the brakes, and if something feels really off, I hit the kill switch.

There are ways for you to ‘hunt’ up a good partner in your business by finding someone who can bring more than money into your model. The good news is Angels are often hunting for someone just like you!

Best,

C/

Take some time this week to determine if you are working with the right types of clients. Have you actively gone out and found clients that share your passion, or do you take what is given to you/what walks in the door. Live is too short to deal with ‘dead fish’. If you aren’t excited to see your clients and work with them, either change up your clientele, or change up your work model.

Best,

Chris.

www.ghostceo.com

Do you find that when you get into the ‘right’ type of project, you lose track of time and have tunnel vision? This is the passion piece that is too rare for most professionals. If you are staring at the clock, you are doing the wrong type of work. If you are procrastinating, not getting to things you’ve agreed to, or dragging your feet, you are doing the wrong stuff. Take some time this week to find your passion in business and then look at how you can do the work you love and enjoy tasks that you get lost in.

Cheers,

Chris.

www.GhostCEO.com

It is possible that the cell phone has done more harm than good for business. It leads to bad manners, worse work product, and disruption in focus. I know people that spend hours on their cell phone each day, or typing out emails 20-30 times a day. This is a waste of time. Books like the Four Hour Workweek suggest checking messages/email 2 x a day. This makes sense to me. You control your technology, not the other way around. This week, I want you to track your calls/emails on your iPhone/Blackberry. On Friday, count how many total you had (voicemail/email). How many were necessary? How many disturbed work you were trying to accomplish. Unplug for a while each day and see your productivity grow. If you can’t turn off the phone, you have some serious dependency issues you need to address. I used to be that guy, but realized that being tied to technology didn’t serve me. Try something a bit different and next week (after you get your counts from this week), try to drop the number of calls/emails you take/respond to by 50%. You will likely see no drop in opportunity, but a huge return in productivity. Try it, you might like it.

Cheers,

C./

www.GhostCEO.com or if you are feeling brave: www.ChrisFlett.com (rated “R”)

People! It’s a new year. Come on! Stop with the overworking. If you can’t get your work done during the workday, you are in the wrong job, the wrong market, or the wrong model.

It is unreasonable to work 45/60/80 hours a week. I know you think you have to and part of you might think that others will revel in your commitment. News flash. It isn’t impressive. It’s sad. It shows that you don’t have the systems, support, or know how to get things done. You work hard, not smart and that’s nothing to aspire for. Let me guess. You like to churn your own butter, sew your own clothes, and do your own woodwork. It doesn’t have to be hard!

If you are tired through the day, you are dragging ass, operating at 50% which means things will take you 2x as long as they would take if you were rested, clear, and sharp. Take some time, look at what you are doing, and think, “Am I working smart or hard.” If it’s the latter, there needs to be a change. Things will correct, but if you aren’t in control, you’ll have to live with the consequences.

Listen to your friend, virtual coach, designated A-Hole… take a good look at what you are doing and make the necessary adjustments. I know this post is a bit gruff, but sometimes it takes a snap for you to get the point. As one of my mentors used to say, “If you want a friend, buy a dog; if you want a guarantee, but a toaster!”

Cheers,

Chris.

www.GhostCEO.com

Being a professional is about making decisions. We are in a world where you can have the work life you want if only you ask for it. You can work a four day week, you can work with only certain clientele, hell you can decide on one model and shift it months later if it isn’t working for you. Some of you might not think you can drop from five days to four. Really? Are you so enslaved by your business model, that you can’t have the life you want and the work you want? Rather than thinking why you can’t have something, think of how you can have something. How could you work four days? New company, new position? 4 x 10 hours rather than 5 x 8? It is much easier to stick with what you have and bitch about it then it is to take steps to have what you want…the way you want it. This is the year for you to flex your mental muscles and make magic happen. What if you made the same as you did last year, but with 80% of the effort What if you Took Mondays off? What if you only worked until 3PM each day? Life is far too short for you to piss around with old beliefs. With a new year comes a new start, a fresh page. What will you do with the next 12 months, 365 days, 8,760 hours, or 525,000 minutes. The decision you make in one of those moments (you have 525,000 of them) can change the direction of your career and the quality of your life.

What will you commit to this year? For me, I’m going to double my revenues in half the time and blog about it 3-4 times a week on www.chrisflett.com I will be your guinea pig for 2010 and show you how leverage (the power to influence a situation to achieve a particular outcome) more with less effort. Of course, my strategies will continue to appear here every Monday morning to start your week.

Best,

Chris.

A friend of mine sent me an article about a female blogger who decided to take on a male name to see what happened to her business. The outside argument is that men get instant credibility that women don’t in business. That the market takes them ‘more seriously’ then women. We think that it might be that the woman (standing behind the made-up persona of a man) acted differently and likely did things for her business that she might not have done under her own name.

The story can be found here. What are your thoughts? Do you sell better for someone else than you do for yourself? Do you think you’d have more success if you were a man? What if you played on online? I think it has to do much more with how people act (hiding behind masks) then it does about the market treating them differently. Maybe something to experiment with in 2010? You don’t have to take on a new name, but what if you built business under your company name, rather than personalizing the market’s response to you? You are not your business. You are the caretaker of your business. These are two different things.

Happy Holidays.

C/

www.GhostCEO.com

It’s funny how  high maintenance people can sneak into your business model. In one of my models, we have brought in a new licensee and from the outside she seemed to have all the right parts to be a successful part of the team. But she let her lack of confidence get the best of her. We all spent time with her, but as time went on, the more we got to know her, the more we realized that she had a lot of baggage. Her baggage became our baggage and when a situation arised for her to leave the model, it was a quick and painless decision.

The reason why this comes to mind is we have someone new in that business arm. From the outside, she has very similar characteristics, except the new person exudes confidence. From the first time I met her, I saw that magic that was lacking in the last one. It doesn’t make anyone wrong or right, but for me and the model, it has to be someone who sees the big picture and doesn’t have to be dragged to profitability. If you start wanting it more for your partners/staff/clients/alliances then they want it for themselves, you need to cut them lose.

Birds of a feather flock together. If someone walks like a loser, talks like a loser, acts like a loser…they are a loser. Cut them out and replace them with a fellow champion. You and your profit model will thank me.

Collaboration is a necessary part of a successful business. Lots of great ideas have been shared this month by the SheTeam contributors and I found myself considering many of the ideas and putting them to work in my own business. Now a way to pull it all together.

1. Take an objective look at people you are working with. Is it working? If it is, keep on keeping on. If it isn’t. End the relationship and find someone more suitable
2. Look at areas of your business where collaboration could bring you (and someone else) to a higher level of business performance.
3. When you identify those areas, start to get ‘curious’ about who could fit the bill. What are you looking for? What qualities do they need to have?
4. What rules and boundaries do you need to have in place to protect the interests of all involved?
5. What are the individual and shared goals of the collaboration.

It’s okay to be selfish in a collaboration as long as you encourage others to be selfish as well. When everything is out on the table, collaborators can all benefit from the multiplying effect of their efforts. Don’t forget to examine your collaborations on a monthly basis. Whatever you do, from teaming up with another business to contributing to a blog like this one, if it stops serving you…stop doing it.

Chris.

www.GhostCEO.com