The HBS Blog offers insight on Delaware corporations and LLCs as well as information about entrepreneurship, start-ups and general business topics.
When you’re just starting out and looking for investors for your new company, forget the standard sources of capital; forget the banks; forget the Venture Capital firms; forget the finance companies; and forget the Small Business Association.
All of these sources of capital are a big waste of your time.
You see, these sources of capital exist for a company that possesses two key advantages: assets and cash flow. First, you need to have assets greater than the amount you want to borrow and second, you must have the cash flow to pay the debt service.
Without both of these important elements, you might as well be praying for it to rain money. Most new businesses possess neither of these elements, so where are you going to get money to start up your business venture.
You need an angel. Only an angel would invest in a company with no assets and no cash flow. Your angel needs to be capable of investing money into your business; therefore, you need an angel investor.
What to Look For in an Angel Investor
Where do you find an angel investor? There are only two reasonable groups of people you can count on. First, people who know you, trust you and have money and second, people with money who know the industry you’re breaking into and trust that it both needs and can support your innovation.
The first group is the easiest to find and talk to. These would be family members, mentors, former bosses and colleagues, rich kids you grew up with--anyone you know who trusts you and has money. If they know you and trust you but don’t have money, don’t bother them.
Money is essential for an angel investor. Compile your list and then call and make an appointment to meet with them. Don’t tell them the whole story over the phone; just tell them you are seeking their advice on a business matter.
When you show up for your appointment, it is important to have an engaging presentation ready to show them. PowerPoint is great, but it could also be a booklet or a business plan or some other form of presentation. Create something you can give to them, so they don’t forget about you the moment you leave.
Nobody says “yes” in the first meeting, so don’t be discouraged if you walk out of the meeting without a check in your pocket. If they exhibit interest in your business plan, make a second appointment in order to discuss details.
Remember, even though these folks are your friends, don’t be casual about your presentation or the image you project. Impress them with your appearance, your research, your preliminary drawings, your start-up plans and your knowledge of other attempts to solve the same issue you’re out to solve.
Carefully plan your proposal time beforehand; don’t take too much time getting to the point. Start with the executive summary, not the historical genesis of the whole idea.
People you don’t know can also be excellent angel investors. This second group is harder to find, but easier to convince to invest in your company. Wealthy people with money who know a particular industry are often looking for a better way to accomplish something specific in that industry.
If your idea is brilliant, they will recognize it as such and want to invest in your company. However, you must also impress them with your research, your knowledge, your preliminary plans and your integrity. They will have to believe in you before they will invest.
Once again, don’t be discouraged by rejection. If they aren’t convinced your idea is great and your ability to execute it is apparent, just learn from them and move on to the next prospect.
It’s important to remember that for both groups of potential angel investors, rejection is the norm. Your potential angel investors are the unusually intelligent people who are willing to trust you and see your vision.
You may have to meet with 20 or 30 people to find just one who is smart enough to take the necessary leap of faith to invest in you, so keep searching until you find the ideal angel investor.
One final word of advice: always ask yourself “what do they want?” before presenting your business plan. Most people do not want to invest in an idea.
They want to buy stock in a company that is going to someday be valuable. So before you set up your first appointment, you should form your company and be ready to sell stock to your potential angel investor. Be ready to say, “I want to sell you xx percent of my company for xx amount of dollars.” That will impress them.
Notice I did not say raising money will be easy. It will test your resolve. Rejection is hard to take but it hardens you and makes you more determined.
Once you find angel investors, treat them like angels. Contact them often with updates on your progress. Ask their opinion on important matters. Send them your promotional material.
Always keep in mind that they are investing in you because they trust you. Earn their trust repeatedly and they will continue to invest in your company, which is really an investment in you and your future.
Photo Credit: Bill Davenport
Until recently, the word “coaching” was only connected with sports; next, it came to be associated with a way in which to improve one’s personal life, without delving into the emotional foray of psychotherapy, via a new type of self-help called “personal coaching.” For the past few years, however, the way in which the word can be utilized has expanded once again, this time to the business world.
Executive coaching (an extension of personal coaching) has become so popular that, according to the ICF 2012 Global Coaching Study, the total annual revenue from professional coaching in 2012 was nearly 2 billion dollars; that same report stated that the number of professional coaches working throughout the world had increased from 2,100 in 1999 to 47,500 in 2012.
So what is an executive coach and why do people—especially zealous entrepreneurs and successful CEOs— employ them? Executive coaches are people who are trained (yes, both personal coaches and executive coaches undergo extensive training in order to earn one or more coaching certificates, so don’t work with one who isn’t certified) to help people grow—emotionally, intellectually, internally.
Almost all of us will, at some point in our adult lives, hit a plateau; for those of us who are used to feeling both motivated and productive, when we slam into that plateau the feeling can be extremely disconcerting. An executive coach helps people get un-stuck, so to speak, and in the process, points out areas of potential we may never have explored or pursued.
Skilled executive coaches recognize the strengths within us that we may have overlooked, taken for granted or just never even noticed.
As an entrepreneur, you can likely be described as energetic, motivated and focused; however, entrepreneurs are often so busy and overwrought that they don’t dedicate enough time to strategic thinking, which is crucial for long-term success.
Entrepreneurs and CEOs who don’t slow down long enough to think strategically often wind up losing (or confusing) their vision of the company; they may also:
An executive coach teaches you not only the necessity of strategic thinking but also the tools you will need to utilize in order to think strategically throughout your career and life. In addition, by helping you eliminate your own self-limiting beliefs, an executive coach teaches you how to define your vision, confront obstacles, develop a work-life balance and sustain motivation, accountability and responsibility.
An executive coach offers support and helps you learn why you’re hiding behind your own self-limiting beliefs; the goal is for you to accept and then conquer these beliefs, and subsequently let them go so you can move ahead with both confidence and mindfulness.
A good coach will also ensure you are clear about your own core beliefs. Jerry Anathan, a Certified Personal Coach and owner of Inner Guru Coaching, explains that “core values are not ethics or morals. They are the truest representation of our authentic selves. Without an honest alliance with our own personal set of values, we lack the foundation to make powerful decisions at every moment.”
Ms. Anathan says that a great executive coach “digs deep,” and focuses on illustrating the importance of the life-work balance to industrious, dynamic business leaders. “Work-life balance” doesn’t merely mean leaving the office before 8 PM. Work-life balance includes:
If this sounds difficult and challenging, it is—that’s the point. Change will not just happen by itself; transformation takes work. However, the work is easier with the help of an executive coach, whose job it is to keep you motivated and accountable to your own plans for self-improvement.
Ms. Anathan describes the coach-client connection as one “based on trust, progress and celebration of accomplishments. Coaches teach you how to measure your progress, so you actually feel good about where your energy is spent.” The stipulation, then, seems to be the self-dedication and motivation required to effect real change in your life, but this caveat exists in all methods of self-help, most especially psychotherapy.
With an executive coach, however, you typically have more access to your support system as well as actual homework to do between sessions, which keeps you focused and determined while you break negative patterns and create more positive, healthier ones.
So how does a busy entrepreneur find an executive coach? The same way you do everything else these days—research via Google, personal references and/or word of mouth. Three things you should think about are:
Executive coaches are usually quite understanding of an entrepreneur’s demanding schedule, and most have embraced technology when it comes to meeting for sessions. Many offer a free consultation in which you have a phone conversation so both of you can gauge your comfort level and decide if it feels like a good fit.
The individual executive coaching will likely be presented in a variety of ways: a one-day, intensive session; a month-long package; a 3-month package; or a 6-month package, all of which will include:
At Inner Guru Coaching, Ms. Anathan emphasizes to her clients that they remain proactive, open-minded, committed to the process and, of course, willing to change their belief systems—all vital aspects of the coaching process.
At the end of the day, even the most passionate entrepreneurs and world-famous CEOs need to shut down the computer, hang up the phone, leave the office and go home. Whether that home is full of warmth, love and personal fulfillment or it is a hollow, unsatisfying part of your journey is completely up to you—help is available if you should need it.
Do you own or operate a Delaware corporation? (Not an LLC.) The deadline for the annual corporate Franchise Tax report is March 1 of each year. Have you filed and paid for your Delaware corporation’s annual Franchise Tax report yet?
If not, Harvard Business Services, Inc. can help you stay in compliance and complete the filing by the impending due date. [Please note that LLC/LP entities have a different deadline, which is June 1.] If you do not file and pay your company’s Franchise Tax by March 1, you will incur a $125 late penalty as well as a 1.5% monthly interest fee added to the overdue balance.
Your corporation will also lose its Good Standing status in Delaware.
The annual corporation Franchise Tax report must be filed and paid every year. Do not be fooled into thinking your company does not have to pay the Franchise Tax for any reason. This annual obligation is required, even if:
To put it simply, if you own a Delaware corporation, the annual Franchise Tax report must be filed and paid by March 1 of every year.
Harvard Business Services, Inc. has the expertise to assist with the filing of your annual Delaware Franchise Tax report. The fastest and easiest way to get this accomplished is online.
Once we have received your online order, we will submit your corporation’s Franchise Tax filing to the state of Delaware. You will then receive a copy of the documentation for your records.
We are happy to help you file your annual Delaware Franchise Tax report; however, please keep in mind that our office processes thousands of Franchise Tax reports, so in order to make sure all the filings are processed on time, we must enforce a cut-off time for accepting new orders. Therefore, please take note of our office schedule for March 1, 2016:
After 8 PM EST on March 1, 2016, we will no longer be able to accept any Franchise Tax filing requests of any kind. You will need to contact the state of Delaware directly in order to make payment arrangements. The state of Delaware’s contact details are:
Don’t wait until the last minute to submit your annual Franchise Tax report filing. Let Harvard Business Services, Inc. take care of it for you today.
Welcome to the Successful Entrepreneurs Blog Series. In this monthly blog series, Harvard Business Services, Inc. will interview a variety of successful entrepreneurs whose companies’ range from small to large and local to international.
If you have a suggestion for a Successful Entrepreneur Blog Post or would like your company to be featured in this series, send us an email.
Entrepreneur Catherine MacWillie Talks to Harvard Business Services, Inc. about Custody Calculations, her Delaware Public Benefit Corporation
Custody Calculations At-a-Glance
|Incorporation Date||August 28, 2015|
|Products/Services Offered:||Custody Calculations provides unique, innovative, proactive solutions that allow parents to get through the divorce and custody process in less time, with less difficulty and for less money. We offer coaching, seminars, conference calls and we can also be available for speaking engagements and media interviews.|
|Incorporation Type:||Public Benefit Corporation|
What inspired you to start Custody Calculations?
I am a retired law enforcement agent. I was a police officer with the Los Angeles Police Department for 24 years. Over the course of my career, crimes and calls related to family law increased significantly.
As a young officer, there were a few calls related to custody and divorce. Fast forward to several years later, and there were hours and hours of radio calls concerning family law.
My research shows that 25 percent of all crimes in the United States—homicides, suicides, abductions, violations of restraining orders, stalking—are related to family law. This could actually be a conservative number, since we don’t yet track causative factors related to crime.
What is the mission of your company?
Through my company, I continue to act upon the decisions I made when I went into law enforcement— to protect children, families, my community and even my country.
We provide unique, innovative and proactive solutions that allow parents to get through the divorce and custody process in less time, with less difficulty, financially and emotionally, so they can go on with their lives and take care of their children.
Tell us more about the services your company offers.
As a divorce coach and a child custody coach, I hold my clients’ hands and help them make better decisions outside of the courtroom. We advise our clients not to call the police when they shouldn’t and not to spend $20,000 fighting for an $8,000 dollar couch. The system encourages escalation. It’s a divorce, not World War III, but families feel they are entrenched in warfare.
We work with our clients so they can keep their sanity and be a better parent to their child; in turn, the attorney gets a better client, one who makes fewer mistakes outside of the courtroom.
The attorney is there to protect the client’s legal rights, but not to give advice about all the other things that come up—fights about clothes, about diapers, about school records. My clients say to me, “I can’t get tickets to graduation” or “I can’t get copies of report cards.” I help them to resolve these problems.
Custody Calculations has clients all over the United States and even receives calls internationally. The company does everything by phone, text, email and fax. So I never meet my clients. The company runs a nearly 24/7 operation. Although we don’t guarantee this service, we are usually the first resource a person can reach on a weekend or late at night.
Why did you choose to incorporate as a Public Benefit Corporation?
I consider myself a philanthropic entrepreneur. Ben Franklin once said, “Doing good is good business,” and I believe this is true.
I think capitalism can solve many of the problems we are experiencing in this country, and it can solve those problems better than the government.
With a Public Benefit Corporation, I can focus my decisions on what is ethical and moral over what is profitable.
I also want to send a strong message that Custody Calculations is different from other Family Law providers. Not just because I have a law enforcement background, but also because of our mission. Registering as a Public Benefit Corporation did that for us.
You are a resident of California; why did you choose to incorporate in Delaware?
I originally incorporated in Nevada, because it is a pro-business state. I made the decision to change the company’s registration to Delaware because it is a pro-business state and it offers the Public Benefit Corporation. Being a Delaware corporation means my company is more likely to be protected in the event of a lawsuit. Being a Public Benefit Corporation means I can make ethical and morally-correct decisions for my community rather than decisions that are profit-driven only, regardless of board positions or stockholders, if the company were to go in that direction.
Do you have any advice for those who want to become a successful entrepreneur?
It will take a lot longer and cost more than you expect. You have to constantly adjust from what you think you know. Offer something unique, and offer it better than your competition, for a darn good price.
If you do all those things and you have adjusted for costs that you might not have expected, you will be rewarded for your ideas and your commitment.
What is next for Custody Calculations?
We are expanding our services and products to include e-books and monthly memberships. Our new website will be launching in the next six to eight weeks. As well, we are excited about starting to offer a groundbreaking service, a kind of ‘TurboTax’ for divorce in the coming months. I am looking towards the future and I have big goals.
Each one aspires to create the next great Delaware company, such as Facebook, Google, Uber or Twitter.
We love being a part of the entrepreneurial process—helping people form their companies, obtaining their Federal Tax ID Numbers for them and cheering them on as they start to achieve their goals.
People from all over the world inquire about obtaining a Federal Tax ID Number or EIN (Employer Identification Number) for their new businesses.
Some people think that because they do not have a Social Security Number, a U.S. address or an Individual Taxpayer Identification Number (ITIN) that they cannot obtain an EIN.
This is not true. If you do not have a Social Security number, you are not disqualified from obtaining a Federal Tax ID Number.
You will be required to fill out and submit an SS4 Form, just as any U.S. resident would. The address listed on the SS4 Form can be anywhere in the world. The IRS is only interested in knowing where the business is operating.
If you do not have a Social Security Number or U.S. address, you cannot obtain an EIN online. The application for an EIN must be mailed or faxed to the IRS. Be very careful when doing so, however, as there are potential drawbacks to dealing with the IRS on your own.
If the application is not prepared correctly or is transmitted illegibly, the IRS may fax you a letter of rejection.
This letter of rejection can sometimes take weeks to receive; once it is received, you are welcome to reapply for the EIN, but you will have to start the process from the beginning.
Our dedicated team in the Filings Department will be responsible for making sure your SS4 application is prepared and filed correctly in order to ensure the timely approval of your Federal Tax ID Number.
If there are any problems, we will call the IRS to resolve the issue, thus saving you time and energy so you can concentrate on your new company.
We can typically obtain an EIN for any international client within ten to fifteen business days. We will prepare the SS4 Form first, and then email it to the responsible party for signature.
The responsible party controls, manages or directs the applicant’s entity and the distribution of its funds and assets. The responsible party for a corporation must be an actual person, but this person can be an officer of the corporation and he/she can live anywhere in the world.
The responsible party of an LLC can be a member or managing member from anywhere in the world. The responsible party simply signs the document and emails or faxes it back to us. Harvard Business Services, Inc. will follow up with the IRS on your behalf if the EIN is not received in a timely fashion. This can save you hours of frustration, since contacting the IRS can be a lesson in futility at times.
If you would like to apply for a Federal Tax ID Number for a new or existing company, please call us, regardless of whether or not you have a U.S. Social Security number, ITIN or U.S. address.
We can help alleviate the hassle of dealing with an often uncooperative and unfriendly IRS. Please call 1-800-345-2677, Ext. 6910.