Comments on: When to Use a Go-Between

By: Alec

Alec — Sun, 04 Dec 2005 19:51:52 +0000

I agree in spades, Greg. Seems like it’s the only way to make sure it’s a win.

By: Alec

Alec — Sun, 04 Dec 2005 17:15:37 +0000

I understand the problem Brent, and it’s very real. How do you prevent the scenario that an introduction is claimed as a commissionable sale? My opinion is that the answer is named accounts. If the person has a strong relationship with a specific account that you don’t have already, and can bring a sales engagement to a successful close, then that’s valuable. I’m not paying the $$ that these guys ask, though, for them to prospect. Prospecting can be done much more cheaply.

By: Greg

Greg — Sun, 04 Dec 2005 14:37:26 +0000

Great post. I have never used a middle man for raising money, and I agree thats not a very wise thing to do. The personal relationship is key with your investors. As for sales and new business development, I am VERY careful about crafting these types of relationships - especially ones where the so called “go betweens” take on none of the risk. When they ask for payment or high fees before they even perform, I walk away. The ones who will take the risk are saying they are confident with who and what they know. Pay per performance is the way to go with these types of arrangements. Only once someone has a track record of bringing in business will I start to talk fees with them.

Keep up the great writing!

By: Brent

Brent — Sun, 04 Dec 2005 13:59:17 +0000

We hired a guy once to do sales for us. Not raise money, mind you; sales only. Biggest mistake I ever made. The guy was an empty suit. Perhaps he had too sweet a deal, but it became difficult to discern between sales on which he had some (significant) influence, and sales on which he did not. For us, the problem was that he was not able to sell on his own - each sale required a lot of our (the owners’) time and knowledge. We did most of the real work convicing customers to buy, and he made as much money as anyone off many of the sales he, supposedly, had made. Using your words, he was a “professional door opener”; nothing more. This guy ended up making as much money per developer-man-hour as the developers did themselves. More even.

Empty suit. Biggest mistake. Ugh.

By: Alec

Alec — Sun, 04 Dec 2005 02:48:49 +0000

Will do. I think the whole space around raising money can be a minefield. Don’t know that we’re the smartest people at it, but Howard and I keep walking into situations which, with some reflection, we figure out what to do with.

Thanks for the encouragement!

By: Frank Miller

Frank Miller — Sat, 03 Dec 2005 18:58:05 +0000

I am absolutely loving your posts on investment issues you are obviously dealing with in your startup. They parallel my past life amazingly at times. What I’m really getting out of it believe it or not is therapy. So many of the things you have mentioned I have direct experience with. I can remember at the times they were happening wondering how I and the other people with which I was working were handling things. Hearing about your opinions reinforces my views and experiences. Please keep this kind of interesting material coming!