strategic advice

  • Carbonwolf Energy

  • It's Not Business… It's Personal!

    Gangster movies, lawyer sitcoms and too many business coaches would have you believing that emotion is the enemy. They’d have you think that to be successful you must scheme, plot and ultimately crush your opponents. That’s not to say warfare has no place in business –because it absolutely does. However, the mentality of command-and-conquer business leadership doesn’t work for most companies –anymore.

    You've got to have the love.

    The world has changed. Today, a Maasai-tribesman on the plains of Kenya has access to more information via his smartphone than a White House top-level official did in the 1980s. Full stop. With advancements in technology and communication, it has never been easier for “the individual voice of the masses” to be heard. And, guess what… They care. Countless blogs, videos, websites, organizations and grassroots movements have been started because of the shared-beliefs of a few or many individuals –simply because they care.

    It’s no longer good enough for a business to just open its doors and hope for customers. Today’s customer wants to know what your business believes in. It’s the reason that companies like Apple have such a loyal customer following. Apple believes in “challenging the status quo” with every single product. Accordingly, Apple customers yearn for those distinctions.

    People care what you, as the leader of your company, truly believe in. The business world is still brimming with mediocre companies holding on to the outdated premise of keeping “heart” out of their businesses. This represents an incalculably-huge opportunity for passionate, empowered and driven startups. People desperately want to believe in something authentic. Authenticity cannot be measured, but it is instantly recognized. Ardent shared-passion throughout your company fosters such purity.

    If you make your business take a stand for what you believe in, people will follow you...

  • We Fund World Changers

    Carbonwolf Energy - We Fund World Changers

    Our Investment and Partnership criteria is simple to understand -but surprisingly difficult to meet. Here are the three primary questions we must answer "YES" to:

    1: Do we love the founding team? This is a deceptively difficult question. We're not talking about just great people skills. Many executive teams have great ideas and are hyper-talented, but lack true commitment to their cause. Some teams have fantastic ideas, but poor timing. Fewer still, handfuls of teams have phenomenal ideas and are reasonably-skilled -and are hyper-committed. History, as we know it, is largely written by these types of groups, partnerships and individuals. It's predominantly the latter groups who achieve so much -they can actually make history. Often times it's the sheer will (read: commitment) of the founders alone that gets the company through some of the most devastating setbacks -which are all but inevitable.

    We know that level of commitment. And, we require it as the starting point of any great endeavor.

    2: Do we love the project? We work with companies centered around great ideas. Phenomenal ideas. Good ideas will get tabled. We also require your project to positively impact humanity and the world.

    Additionally, your project has to be past the "proof-of-concept" or prototype stage. In the future, we will include seed-stage funding, but for now, the projects we get involved with must have moved from the "paper" stage to the "market" stage with actionable target-customer feedback.

    3: Does the company have an unfair advantage? It's what makes your company distinctly unique -and better than your competition. Not just apples-to-apples better. We mean driverless car versus horse-and-buggy better.

    Sometimes, a company has an unfair advantage buried deep within and they just need tactical help to effectively share it with its future/existing customers. We like companies that compete, but we LOVE companies with the potential to dominate.

  • What Are the 5 C's of Small Business Lending and Startup Investing?

    There are key “Pillars” Banks, Private Lenders and Investors look for when it comes to small business loans. It’s widely referred to within the banking industry as the “Five C’s” of Lending and/or Investing:

    The Five C's of Lending and Investing

    Character:

    The most nebulous of the Five C’s. Some Lenders do take in consideration your management team’s experience and history as well as your reputation in the community. Most banks, however, rely more heavily on the rest of the “Five C’s.” Many Venture Capitalists and Investors, interestingly, will look at this C as the one of the most important –if not the most important “C”.

    Credit Score:

    This Pillar is one of the most important for Banks. Traditional Lenders swear by this number. Banks will often say it’s a measure of your commitment to meet your financial obligations. Alternative Lenders are a lot more flexible, but many will, at least, want to understand why your score is where it is. Low Credit Scores will be scrutinized by Banks. Credit is generally a nonissue for potential Investors, but they’ll need a good understanding of why your score is where it is.

    Capacity:

    The most important Pillar. No Lender wants to loan you money –if you can’t adequately prove you can repay it. The easiest way to prove this is have three years of historical financials backing up what you’re stating financially. If you don’t have three years of financials, then you must show a fundamental “pivot” point or “turnaround” scenario by supplying additional contracts with target customers. These agreements need to be executed, or in the process of being secured. Otherwise, it’s just a good story… And, while a good story makes for fascinating conversations with potential Lenders –they rarely survive the due diligence and underwriting phases if that story isn’t supported by appropriate agreements.

    Capital:

    The “supporting actor” Pillar. It’s not the most important factor, but it can be a deciding factor. Capital refers to how much “skin-in-the-game” you’re coming to the closing table with. Ex: If you’re purchasing a business and you’re prepared to put 30% of the purchase price as a down payment, then the Bank will believe you are less likely to walk away from the deal. If you don’t have access to cash reserves, consider doing a responsible joint venture with a partner who will lend the cash portion of the deal.

    Collateral:

    Another “supporting actor” Pillar. Many Lenders are “cash flow” Lender –so they focus intensely on your ability to repay any business loan. Some Lenders are “collateral” or “asset-based” Lenders. Accordingly they focus on what assets or collateral is provided –in the event of catastrophic failure. In other words, if you stop paying: what will they own? And, what is it worth to them? Additionally, keep in mind that Lenders and Investors will significantly discount the Fair Market Value of your collateral depending on the type of deal your seeking. Again, consider seeking a reliable partner to supplement your transaction with a Lender.

    Translation:

    Lenders and Investors rely on the Five C’s to make decisions on whether to loan you money –or not. It’s common to have one or two “C’s” that are weaker than the other Pillars. So long as the remaining “C’s” are strong enough to overcome any issues presented by the weaker ones, you should be in good shape. Think of it this way, if you enough Pillars (legs) for you to make a “sturdy table,” Lenders should be interested.

    Suggested Action:

    Spend time every quarter (or at the very least, every year) stress-testing your company’s Five ‘C’s. Doing so on a regular basis, will make your company more valuable –regardless if you ever seek out Investors. Paradoxically, the best time to apply for a loan or investment is when you don’t need it. And, when you make your moves accordingly, you can make the system work for you –instead of against you.

  • Why We Do This

    We want to positively change the world.

    And, we're doing just that by orchestrating funding for and/or directly investing in humanity-improving technology, cleantech and status-quo-defying companies. We like the relentless underdog. We like gutsy bold moves. We like rabble-rousers.

    Successful entrepreneurs are a special breed. They take the big risks, the hard hits, and make heart-heavy sacrifices. Frequently, everything they’ve built up to that point is at risk: reputation, finances and emotional well-being - at minimum. Entrepreneurs do this because of their largely unshakable belief in what they do. It is because of this belief that they invest all of their time, energy and resources in expectation of their business finally rewarding their unwavering faith. Ironically, it is also due to this mentality that many visionary entrepreneurs wait until nearly all of their precious resources are depleted before seeking out external funding and strategic advice.

    At Carbonwolf Energy, we understand this creed. Our key decision-makers have experienced it firsthand -time and time again. We fund companies respectfully -keeping your brain-trust and vision maximized. Or, we don't get involved.

    "Destiny by choice not by chance." --Carbonwolf Creed

  • Your Reputation Is the Difference

    The cornerstone building block of all business dealings is your reputation. It will open or close doors for you, but if you don’t have one, borrow one via a high-level introduction…

    Warren Buffett

    Brand Association

    It’s the fundamental reason that people care about “brands.” Certain brands like Nordstrom, Porsche, Louis Vuitton and Apple instantly evoke feelings of white-glove customer service, high-performance, build quality or innovation (respectively) because their reputations are based on following-through with their promises. Your reputation is what keeps your customers satisfied and your profits coming in.

    Who are you again?

    However, if you’re part of a startup seeking money, it will be the difference between being taken seriously by an investor and being told “we’ll get back to you” –which is investor-speak for “we’re not interested.” Normally, would-be entrepreneurs have a strong-sense of purpose propelling them to turn their ideas into reality. But, they generally have no idea where to go to find the capital necessary (outside of friends and family) to develop their projects.

    Enter the venture capitalists, angels and investor groups. Most of them have made it their profession-of-choice to entertain entrepreneurial ideas and fund the ones that truly resonate with them. They have access to lots of cash and as such they get bombarded with requests to fund projects and companies daily. Contrary to popular belief, though, it is not just a matter of submitting your idea via an executive summary to anyone and everyone calling themselves investors.

    An investor’s willingness to take a look at your project is directly related to the reputation of the introducing party. For example, an executive summary sent via the investor’s website will eventually get read, but it will be done so with the same level of caring that a nightclub bouncer looks at the people waiting in line to get in. You’re not getting in until they say you’re getting in –which could be longer than you might care to wait. And, even then it’s likely your executive summary won’t make it past the screeners who are looking for every little fault to dismiss you. On the other hand, if your project is introduced by someone with a strong reputation it will increase your odds-of-success dramatically.

    Reputational Risk

    When someone makes a business introduction he takes a risk because he is tacitly vouching for you. Well-connected individuals understand that making an introduction effectively puts their reputation on the line. If they introduce a “tire-kicker” or somebody with a “crap project” then the person whom they introduced will think less of them. And, if it happens continuously, it may adversely affect the relationship. It’s also why great connectors jealously guard who they know.

    If you’re blessed with well-connected individuals in your life, enlist their help to get you high-level introductions with top-level VCs and investors. If you’re not, make your pitch or opening-email to the VC firm as customized as possible. Include names, why you’d like to specifically work with their firm and, most of all, be authentic. It’s that same authenticity that will build you a sterling reputation.

Carbonwolf Energy
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