from the world's big
How start-ups raise capital when their bank account is empty
Big Think's co-founder and CEO, Victoria Montgomery Brown, offers six pieces of advice to founders in her forthcoming book.
- Big Think's CEO and co-founder Victoria Montgomery Brown explores the challenges of being a female entrepreneur in her forthcoming book, Digital Goddess.
- In one chapter, Brown offers key insights into how to raise capital when you have no money and no MVP.
- She advises to use every edge at your disposal; perseverance and tenacity are essential.
In 2017, 40 percent of entrepreneurs were female, representing a 58 percent uptick in female-owned businesses from a decade prior. Fifty-six percent of college students are female, a complete reversal from fifty years prior, when 58 percent of men filled university halls. Yet in 2017, only 2.2 percent of venture capital (VC) money went to women-founded companies. Society has changed, yet the worlds of start-ups and venture capital are still predominantly run by white men.
Big Think was founded in 2007 by Victoria Montgomery Brown and Peter Hopkins. As with many start-ups, the fundraising process provides quite a story, one that Brown has now decided to tell. Her forthcoming book, Digital Goddess: The Unfiltered Lessons of a Female Entrepreneur (HarperCollins Leadership), reveals how this website came to be—and how women can overcome barriers in a male-dominated business world.
Below are six lessons from Brown's chapter on raising capital when you have no money or product. Brown writes that there are essential qualities for starting a business that help you navigate the terrain, such as a having a strong vision and maintaining unflinching tenacity. While some of these came naturally to Brown, others were hard-fought lessons that changed her for the better. The chapter—and the book—is a reminder that with perseverance and dedication to learning, anything is possible.
Use whatever will get you in the door
The greatest challenge every start-up faces is "first money in." Many investors are willing to back a good idea only when someone else has already committed—and they like to know who that someone else is.
In some ways, being a female founder has its advantages. As Brown writes, a Boston Consulting Group study shows that female-run start-ups outperform male-run start-ups, generating 78 cents in revenue per dollar invested compared to men at 31 cents. That's solid data, but you still need to get in the door.
Brown leaned heavily on her master's degree from Harvard Business School. This helped tremendously for her first investor meeting with Founder Collective co-founder David Frankel. He was enthusiastic, but he wanted to know who else was interested. Brown turned to former Harvard University president, Larry Summers. His buy-in increased Frankel's interest; he became the lead investor.
Meeting with such heavyweights is no easy matter for entrepreneurs with no product or history in founding a company. As Brown writes, "Study after study confirms that people tend to equate confidence with competence." Presenting Big Think confidently made the impression needed to secure funding.
With two investors in, landing Nantucket Nectars founder Tom Scott and billionaire entrepreneur Peter Thiel was not as challenging as one might assume. Brown writes, "Getting the first investor feels impossible, but if you can pull it off, getting the second is sometimes surprisingly easy."
Quit your day job
This is one of the hardest aspects of being an entrepreneur. Not only do founders not have the capital needed to launch their company, they sometimes work for years without paying themselves. If investors are going to put money into your project, they have to know you're serious about success.
"People don't like to fund things if the entrepreneur and CEO don't have their entire skin in the game. You better have something big to lose, or how are people going to believe you are all in?"
With no income or savings, Brown quit her day job in order to devote her every waking hour to Big Think. Self-imposed deadlines made sure she hit her targets. Founding a company isn't comfortable; waiting for relief will only distract you from the work that needs to get done.
"If you truly want to start something—whatever it may be—waiting won't help…put yourself in a position where you must do it."
Three months after quitting her day job, money showed up in Big Think's bank account.
If you're trying to convince investors to believe in you—and it is you that they're investing in, more than your product—show them traction, even when you don't have it. Go out and make it happen.
"Our investors needed to be intrigued by the idea and see its potential to succeed and to scale, but they also needed to see that I was actually in a place of discomfort if it didn't work out."
Securing funding before showing a minimal viable product (MVP) is no easy task. Brown knew that she had to show something. Big Think started as a video platform; she needed experts to appear on video. Through their networks, Brown and Hopkins contacted Richard Branson, Moby, the Buddhist scholar Robert Thurman, and famed architect Lee Mindel. They wanted them to be anchors.
Convincing high-profile business leaders, artists, and academics to partake in a new project is as daunting as landing VCs. When these figures inevitably asked about precedent for such an initiative, Brown turned a potential negative into a positive. "No one. We are reaching out to a very select, initial group of experts to kick-start it."
Making people feel critical to a project's success is a powerful way to get their endorsement, Brown writes. More importantly, it worked. A risky play between content generators and financial backers worked out. Big Think had momentum.
Do your research
As mentioned, investors are often more interested you than your product. As Brown writes, fundraising is "about creating a situation where investors get a real glimpse of who you are and why they should invest in you."
It's not a one-way street. You should also be interested in them.
"Be truly interested in the person you are meeting or don't bother meeting."
Brown advises looking beyond LinkedIn profiles and superficial bullet points. Investigate their interests, such as their passions and philanthropic pursuits. Understand why they might be interested in your venture and where it intersects with their business. Discuss topics outside of the investment opportunity. Engage them as people, not bank accounts.
"Helping others feel attractive and special—not in a sexual way but in a human way—helps them see you as a more attractive person, too. But you have to mean it."
Learn to say yes
The discomfort of being a founder includes stretching your boundaries. PayPal famously iterated numerous times before finding success. Flexibility is key if you want to survive. Sometimes that means admitting your limitations.
"Here's something major that HBS [Harvard Business School] taught me. You don't need to know how to do things, you need to know how to ask people to do things for you."
Finding the right people is one aspect of saying yes. By admitting your limitations, you say yes to help. But there's also saying yes to projects you're not entirely capable of pulling off.
After scoring a sponsorship with Pfizer, the second Big Think project was with MSNBC. The media company had a deal to provide expert-driven content with GE and SAP. They just didn't have a team to produce it. Being nimble, Big Think could turn it around quickly.
"Smaller companies with greater agility can take advantage of this situation if they just have the courage to step up and offer."
Instead of focusing on the negatives, such as not having a website or even equipment, Brown and Hopkins saw the opportunity. They said yes, and completed the project without a hitch, because they had the foresight to say yes.
Learn to say no
Not everything demands a yes, however. Discernment matters in the frenetic world of start-ups.
There are investors, there are people that connect you with investors, and there are charlatans. As the latter often suck up oxygen in any room they enter, it's easy to confuse bluster with their capabilities.
And so we meet "Jake," who in the early days of Big Think promised a lot, demanded more, and delivered nothing.
"He hadn't brought us any investors, he hadn't booked any experts, he hadn't helped us put together the deck, so what were we doing spending time with him? He felt sort of sleazy, like a smooth talker but not a doer."
Brown told Jake he was not getting equity without deliverables during their final meeting. This news did not go over well. Jake yelled and stormed out. Such momentary discomfort is a low price for not giving up even a piece of your business. Calling our charlatans demands that you say no. Thankfully, for the future of Big Think, one bad evening paid off in the long run.
Credit: Harper Collins
Get the free download: 7 Things You Need to Sort Out Before Starting a Business
Digital Goddess: The Unfiltered Lessons of a Female Entrepreneur by Big Think founder Victoria Montgomery Brown is available for preorder now.
Join Pulitzer Prize-winning reporter and best-selling author Charles Duhigg as he interviews Victoria Montgomery Brown, co-founder and CEO of Big Think, live at 1pm EDT today.
In a recent study, researchers examined how Christian nationalism is affecting the U.S. response to the COVID-19 pandemic.
- A new study used survey data to examine the interplay between Christian nationalism and incautious behaviors during the COVID-19 pandemic.
- The researchers defined Christian nationalism as "an ideology that idealizes and advocates a fusion of American civic life with a particular type of Christian identity and culture."
- The results showed that Christian nationalism was the leading predictor that Americans engaged in incautious behavior.
A pastor at the chapel of the St. Josef Hospital on April 1, 2020 in Bochum, German
Sascha Schuermann/Getty Images<p>Christian nationalists, in general, believe the U.S. and God's will are tied together, and they want the government to embody conservative Christian values and symbols. As such, they also believe the nation's fate depends on how closely it adheres to Christianity.</p><p style="margin-left: 20px;">"Unsurprisingly then, in the midst of the COVID‐19 pandemic, conservative pastors prophesied God's protection over the nation, citing America's righteous support for President Trump and the prolife agenda," the researchers write.</p><p style="margin-left: 20px;">"Correspondingly, the link between Christian nationalism and God's influence on how COVID‐19 impacts America can be seen in proclamations about God's divine judgment for its immorality―with the logic being that God is using the pandemic to draw wayward America <em>back </em>to himself, which assumes the two belong together."</p><p>The logical conclusion to this kind of thinking: America can save itself not through cautionary measures, like mask-wearing, but through devotion to God. What's more, it stands to reason that Christian nationalists are less likely to trust the media and scientists, given that these sources are generally not concerned with promoting a conservative, religious view of the world.</p><p>(The researchers note that they're unaware of any research directly linking Christian nationalism to distrust of media sources, but that they're almost certain the two are connected.)</p>
Predicted values of Americans' frequency of incautious behaviors during the COVID‐19 pandemic across values of Christian nationalism
Perry et al.<p>In the new study, the researchers examined three waves of results from the Public and Discourse Ethics Survey. One wave of the survey was issued in May, and it asked respondents to rate how often they engaged in both incautious and precautionary behaviors.</p><p>Incautious behaviors included things like "ate inside a restaurant" and "went shopping for nonessential items," while precautionary behaviors included "washed my hands more often than typical" and "wore a mask in public."</p><p>To measure Christian nationalism, the researchers asked respondents to rate how strongly they agree with statements like "the federal government should advocate Christian values" and "the success of the United States is part of God's plan."</p><p>The results suggest that, compared to other groups, Christian nationalists are far less likely to wear masks, socially distance and take other precautionary measures amid the COVID-19 pandemic.</p><p style="margin-left: 20px;">"Christian nationalism was the leading predictor that Americans engaged in incautious behavior during the pandemic, and the second leading predictor that Americans avoided taking precautionary measures."</p><p>But that's not to say that religious beliefs are causing Americans to reject mask-wearing or social distancing. In fact, when the study accounted for Christian nationalist beliefs, the results showed that Americans with high levels of religiosity were likely to take precautionary measures for COVID-19.</p>
Limitations<p>Still, the researchers note that they're theorizing about the connections between Christian nationalism and COVID-19 behaviors, not documenting them directly. What's more, they suggest that certain experiences — such as having a family member that contracts COVID-19 — might change a Christian nationalist's behaviors during the pandemic.</p><p style="margin-left: 20px;">"Limitations notwithstanding, the implications of this study are important for understanding Americans' curious inability to quickly implement informed and reasonable strategies to overcome the threat of COVID‐19, an inability that has likely cost thousands of lives," they write.</p>
Parental anxieties stem from the complex relationship between technology, child development, and the internet's trove of unseemly content.
- Today's parents believe parenting is harder now than 20 years ago.
- A Pew Research Center survey found this belief stems from the new challenges and worries brought by technology.
- With schools going remote next year, many parents will need to adjust expectations and re-learn that measured screen usage won't harm their children.
Parents have always endured a tough road. Parents are the providers of an entire human being's subsistence. They keep that person feed, clothed, and bathed. They help them learn. You invest in their enrichment and experiences. They help them navigate social life in their early years. And they do all this with limited time and resources, while simultaneously balancing their own lives and careers.
Add to that a barrage of advice and reminders that they can always spend more money, dedicate more time, or flat-out do better, and it's no wonder that psychologists worry about parental burnout.
But is parenting harder today than it was, say, 20 years ago? The Pew Research Center asked more than 3,600 parents this question, and a majority (66 percent) believed the answer is yes. While some classic complaints made the list—a lack of discipline, a disrespectful generation, and the changing moral landscape—the most common reason cited was the impact of digital technology and social media.
A mixed response to technology
Parents worry that their children spend too much time in front of screens while also recognizing technologies educational benefits.
This parental concern stems not only from the ubiquity of screens in children's lives, but the well-publicized relationship between screen time and child development. Headlines abound citing the pernicious effects screen time has on cognitive and language development. Professional organizations, such as the American Academy of Child and Adolescent Psychiatry, issue warnings that too much screen time can lead to sleep problems, lower grads, weight problems, mood problems, poor self-image, and the fear of missing out—to name a few!
According to Pew's research, parents—which, for the record, Pew defines as an adult or guardian with at least one child under their care, though they may also have adult children—have taken these warnings to heart. While 84 percent of those surveyed are confident they know how much screen time is appropriate, 71 percent worry their child spends too much time in front of screens.
To counter this worry, most parents take the measured approach of setting limits on the length of time children can access screens. Others limit which technologies children have access to. A majority of parents (71 percent) view smartphones as potentially harmful to children. They believe the devices impair learning effective social skills, developing healthy friendships, or being creative. As a result, about the same percentage of parents believe children should be at least 12 years old before owning a smartphone or using social media.
But a deeper concern than screen time seems to be the what content those screens can access. An overwhelming 98 percent of those surveyed say parents and guardians shouldered the responsibility of protecting children from inappropriate online content. Far less put the responsibility on tech companies (78 percent) or the government (65 percent).
Parents of young children say they check the websites and apps their children use and set parental controls to restrict access. A minority of parents admit to looking at call and text records, tracking their child's location with GPS, or following their child on social media.
Yet, parents also recognize the value of digital technology or, at least, have acquiesced to its omnipresence. The poster child for this dichotomy is YouTube, with its one billion hours played daily, many before children's eyes. Seventy-three percent of parents with young children are concerned that their child will encounter inappropriate content on the platform, and 46 percent say they already have. Yet, 80 percent still let their children watch videos, many letting them do so daily. Some reasons cited are that they can learn new things or be exposed to different cultures. The number one cited reason, however, is to keep children entertained.
For the Pew Research Center's complete report, check out "Parenting Children in the Age of Screens."
Screens, parents, and pandemics
Perhaps most troubling, Pew's survey was conducted in early March. That's before novel coronavirus spread wildly across the U.S. Before shelter-in-place laws. Before schools shuttered their doors. Before desperate parents, who suddenly found themselves their child's only social and educational outlet, needed a digital lifeline to help them cope.
The COVID-19 pandemic has led many parents to rely on e-learning platforms and YouTube to supplement their children's education—or just let the kids enjoy their umpteenth viewing of Moana so they can eke out a bit more work. With that increase in screen time comes with a corresponding increase in guilt, anxiety, and frustration.
But are these concerns overblown?
As Jenny Radesky, M.D., a pediatrician and expert on children and the media at the University of Michigan's C.S. Mott Children's Hospital, told the New York Times, parents don't always need to view screen time as a negative. "Even the phrase 'screen time' itself is problematic. It reduces the debate to a black and white issue, when the reality is much more nuanced," she said.
Radesky helped the American Academy of Pediatrics craft its statement about screen time use during the pandemic. While the AAP urges parents to preserve offline experiences and maintain limits, the organization acknowledges that children's media use will, by necessity, increase. To make it a supportive experience, the statement recommends parents make a plan with their children, be selective of the quality of media, and use social media to maintain connections together. It also encourages parents to adjust their expectations and notice their own technology use.
"We are trying to prevent parents from feeling like they are not meeting some sort of standard," Radesky said. "There is no science behind this right now. If you are looking for specific time limits, then I would say: Don't be on it all day."
This is good advice for parents, now and after the pandemic. While studies show that excessive screen time is deleterious, others show no harm from measured, metered use. For every fear that screens make our kids stupid, there's a study showing the kids are all right. If we maintain realistic standards and learn to weigh quality and quantity within those standards, maybe parenting in the digital age won't seem so darn difficult.
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