Itzhak Fisher is the Founder and General Partner of Pereg Ventures. A Nielsen backed private equity fund, Pereg focuses its investments on companies that operate around marketing intelligence, advertising solutions, online solutions and mobile enabling.
Before Pereg Ventures, Itzhak served as Executive Vice President, Global Business Development for Nielsen. In that role, Fisher led the global product division, guiding the development and delivery of all Nielsen product solutions to the marketplace.
Pereg Ventures recently visited Cincinnati and Itzhak shared some advice for #StartupCincy founders.
1. Don’t Focus on The Exit
[pullquote]You are building a business to last forever – don’t even think about an exit.[/pullquote]
This is not to say you shouldn’t have an exit. After all, that’s how everyone wins big.
Rather, Izthak’s point was that founders should not focus on selling their company. When he looks for investments, he looks for founders dedicated to building a company – not founders looking to make a fast sale.
“You are building a business to last forever – don’t even think about an exit,” Izthak said. ” I want to know the entrepreneur is committed and that this is his lifelong project.”
2. You Need To Make Money
Investors want to know they are investing in real businesses. And real businesses make money.
This doesn’t mean you need revenue from the start but, eventually, someone will ask you how you plan to make money. Make sure you have a good answer for them.
“Sources of revenue are very, very important,” he said. “If you want to build a company to last, you need to know how you’re going to make money. If you don’t understand how you will make money, your company will not succeed”
3. Think About All The Angles
[pullquote]Especially think about the data you’re gathering. Data is very valuable in today’s market.[/pullquote]
With current technologies, there are multiple streams of revenue available to businesses and the most profitable might not be the most apparent. Entrepreneurs need to be aware of every possible source of income.
To highlight this point, Izthak shared an experience he had while working at Nielsen.
mySupermarket.com is a grocery store shopping comparison tool. Originally, the company built their business model around advertising. However, with real time pricing data of products and services from multiple grocery stores, Izthak realized it was a goldmine of data. He approached them and worked out a deal to purchase the data they were collecting.
Today, mySupermarket.com makes more money from their data than they ever could have with advertising.
“Whenever you build a business you need to think about technology, data and the product you are offering,” he said. “You need to think about all possible sources of revenue. Especially think about the data you’re gathering. Data is very valuable in today’s market.”
4. Founder Quality
[pullquote]There could be an amazing product but if the management team is poor, the company will never succeed.[/pullquote]
VCs know what a good team looks like. They also know what a bad team looks like. If you put together the wrong personnel, then your business is doomed to fail.
Greats ideas are important but, at the end of the day, they’re just ideas. As a founder, you need to put together the the group that will execute and make your idea a reality.
“The management team is the first thing I’m looking at.” Izthak said, “There could be an amazing product but if the management team is poor, the company will never succeed.”
Start With Quality, End with Money
Assemble a crack management team then focus on building a great business. And, along the way, make sure you explore every possible source of revenue because the most profitable one might not be the most apparent.