Why No Term Sheets... at all? or "They Just Aren't Into You"

Laura Emerson

laura@starlightcapital.com

March 24, 2013

Raising capital is hard, time consuming, expensive, and sometimes humbling. There are as many reasons that investors do not invest in companies as there are reasons why people who meet choose not to date. Sometimes “they just aren't into you.” On the other hand, if you have done your research and have found that indeed there are investors financing companies in your niche, just not you, it is WAY past time to assess whether you might be doing anything to sabotage your own game plan.

Below are five commonalities among companies that never get any term sheets at all. Do any pertain to you? Also, review the descriptions of unfunded (unfundable?) companies at the end of the article. Do any aspects sound uncomfortably familiar? If so, the most common problems are not difficult to address.

The five categories are: talking too much, talking to the wrong people, talking about the wrong things, a business plan with holes that indicate naivete or obfuscation, and inflated pre-money valuations. Do any of these sound familiar?

1. DO YOU WASTE TIME BY TALKING TOO MUCH?

Every entrepreneur I have ever met is as proud of his/her company as a new parent is of that wrinkly little baby. Both groups often make the mistake of being long winded, without first ascertaining the audience's degree of interest. Someone's polite inquiry at a networking event of “What do you do?” or “Tell me about your company” may welcome a 2 minute soundbite between drinks, not an uninterrupted oration.

Winter Morning Chores Around an Off-Grid Alaska Cabin

Among winter chores, the most important involves keeping warm.

We sleep under the world's fluffiest, warmest down comforter, which is actually too hot most of the year, but a warm bed, in a cool room is very cozy. Waking up in a cold house (mid-40s to mid 50s), however, is not so fun. The first thing we do is start the coffee that I have set up on the stove the night before, and then open the wood stove hoping that some red embers remain. If they do, we can start a fire without a match. To do so, I open the flu, and scrape the embers together. Then I form a sort of chimney shape of dry, friable birch bark and thin slips of kindling to funnel the embers' heat up along these surfaces, which catch and burn. If the embers have gone cold, we generally shovel them into a metal bucket we store in the snow outside and start afresh. (When the ashes are thoroughly chilled, we dump some down the outhouse hole and save the rest for summer gardening).  This slow and steady approach is difficult to do first thing in a cold and dark morning! Many a time my chilly fingers have overloaded the firebox too early and ended up with a smoky fire. Then I either have to wait until that clears or smoke up the cabin while rectifying the situation sooner.

After a hearty breakfast of bacon and eggs, or pancakes and sausage or bowls of oatmeal, my husband and I have different sets of outdoor chores for which we bundle up in bunny boots, padded Carharrt's overalls, and parkas. 

Routine chores include emptying the night's chamber pot in the outhouse, burning trash in the burn barrel (currently located in a snow hole about 3 feet below the level of snow we walk on), hauling birch logs from our enormous wood corral (we estimate 24,000 lbs of wood, about 8 cords), and collecting additional buckets of snow to melt on the wood stove for washing.


The first thing one of us does is to visit the rabbits with extra water and vegetable ends accumulated the prior day, and perhaps a cardboard toilet paper roll as a chew toy.  They particularly love carrots and bean sprouts. The rabbits are currently housed in the chicken run.  Since that ground is frozen solid, they can't dig their way out. The snow surrounds the chicken wire to the height of the roof. This forms a sort of igloo around the rabbits which they like – it is cold, to which they are well suited - but neither wet nor windy.  To keep the water from freezing,  we have a low wattage water heater for them. They neatly keep their food, sleeping, and pooping areas segregated, so it is easy to feed and clean up after them. Over the course of 3 weeks, these two adolescent Flemish giants have eaten about 10 lbs of pellet food and additional vegetable snacks and alfalfa hay and have excreted about 15 lbs of manure, which we haul to the compost pile. By spring, before the ground thaws and before we bring in a small flock of laying hens, we'll move the rabbits to segregated hutches: one for the male alone and one for the female with what we hope will be a litter of future dinners for us.  (Update:  in subsequent years, we switched to medium sized satins and installed them in hutches, see article on raising rabbits.)

Winter Afternoons Around an Off-grid Alaska Cabin

Although the temperature outside this March is below + 10F degrees in the morning, and above that  in the afternoon, the sun is so extravagantly reflected from the snow into the cabin that by late morning through afternoon (on sunny days) the interior is comfortable without a fire.  So every second or third day, after breakfast/dishes/spit baths, we let the fire die out (if we have enough melted snow for water).  Once the stove is cool, we clear out the ashes and use the embers to burn trash in a snow pit in the back yard.  About once in the spring, fall, and winter, we sweep out the chimney too.   What a dirty job that is!  But we don’t want any uncontrollable creosote based chimney fire in a log cabin in the middle of the woods.  

We tend to have hearty breakfasts and lunches (followed by light dinners). For example, today we had ham and spinach omelets for breakfast.  For lunch, we had salmon salad and crispy cabbage wrapped in a tortilla, browned on the grill, served with stewed apples, followed by  peanut butter cookes topped with Reeces bites and tea.    

<><><><><><> </> <><><><><><> </> <><><><><><> </>

Chicken coop & snow machine commute

After a morning working on business emails and phone calls, Bryan is eager for outdoor energetic projects.  Sometimes he said that he gets into the "zen" of the work, particularly something repetitive like shoveling. Other times he "processes" some business goofball he talked with earlier in the day.  Yesterday, he chopped down a huge birch bough that had crashed into and was hung up in an adjacent tree ( a "widow maker").  Wearing a helmet and Kevlar chaps protected him from most chainsaw depredations, but the snow was so powdery that maneuvering in snow shoes on unstable snow while hefting his Husqvarna 455 seemed less and less prudent so he gave that up (without my having to haul out my widow's weeds). 

Last week he built a chicken coop which we hope to populate next summer with the fluffiest, cold hardy chickens you could ever hope to see.  But I wonder, why am I the only one concerned that the building will fall at a damaging tilt when the 8 feet of ground snow melts in April? 

Winter Logistics with No Electricity or Roads

Anyone living in a cold or variable climate spends a judicious amount of time planning supplies and logistics.  This is not only for seasonal changes, but for the all important Plan B when those changes are extraordinary and when things go awry!  In Alaska, it is not a facile statement to say that the seasonal changes are always extraordinary.

Planning is particularly important for those of us living far from roads and community services, where you can't say, “We're out of eggs, dear.” Bryan and I have whole files devoted to inventory, shopping, future construction projects, and fuel needs. We have back ups for everything we have been able to anticipate so far. What if the propane stove breaks down in winter? (Cook on top of the wood stove). What if the freezer or refrigerator breaks in summer? (Smoke all meats, stuff the cold hole with other foods) What if we run out of food? (We have 128 lbs of long term tofu substitutes, and supplemental freeze dried foods). What if the generator breaks? (I'd say that we'd be screwed, but actually, our wind and solar panels are our primary sources of power, and our heaviest usage is in the summer, when we have more leeway.

An Early Autumn

Autumn is a short season here, and, in a place already rich in light and temperature dependent “now or never” opportunities, fall welcomes seasonal activities that we enjoy only this time of year.

View of home from the kayak

This summer gave clues that winter might come early, and indeed it did. By mid-August, the last fire weed flowers bloomed. That final flowering is our “old wife's tale” warning that winter is 6 weeks away and autumn is upon us. The 6 foot grasses and fireweed die back, revealing the red, yellow, and brown leaves of shorter ferns, cranberry bushes, and devil's club. The berries of the ash, elderberry, and cranberry bushes start orange and turn red and, in some cases, attain a gorgeous burgundy. The birch and aspen trees turn yellow, reflected along the lake edge, reminding me of many a Japanese screen. Over time, they shed their starry seeds and heart shaped leaves along the brown woodland paths, as though ready for a blushing bride to walk upon them. On a short shopping flight to Anchorage in late August, I saw a beautiful sight: miles and miles of yellow birch and aspen, looking, from the 500 ft vantage point of a de Havilland Beaver, like bouquets of giant daffodils as far as the eye could see.