Sherry Coutu

We ask Sherry Coutu to reveal what she wished she'd known when starting up her business.

I am pleased that you are considering starting up your own company. I can't begin to describe how rewarding an experience it can be. I would very much encourage you to embark on the road - assuming that you are sure that it will be something worth doing.

What do I mean by worth doing?

I mean that the company you are starting has the chance of solving someone's problem. Better if that problem is a big one! Excellent if the problem is big and the number of people who have this problem is huge and growing!

In my experience, if you are solving a "big problem" for a customer, then it is easy to attract people to your team and to motivate them to focus on "solving the problem". It is easy to become seduced by "an idea" or "a scientific breakthrough" or "a cool technology" that has no proven (or conceivable) customer demand for it.

"Must have" solutions are so much more compelling than "nice to have" solutions. It has to be something that you think is going to get you out of bed in the morning and keep you from going to bed at night for, well, the best part of a decade.

You need a great team - with one you can achieve the impossible

Successful businesses require a team. Big problems require a team because if the problem is worth solving, it will surely take a bunch of people with complimentary skills to address.

Another benefit of a great team is that you make great friends as you solve more and more customer problems (and are more and more successful). I am still working with the folks from the first company I founded. Five years on from the "exit", we still enjoy solving problems together.

Sometimes the problems we are working out are with companies I have invested in, sometimes with the companies they have subsequently set up, sometimes with the companies they have invested in. Solving problems is something entrepreneurs do.

If you 'feel' something, you are probably right

One of the best pieces of advice I had from one of my mentors was that an entrepreneur listens to evidence and then makes decisions based on educated guesses. He said that those who were capable, but ultimately unsuccessful in business, liked to analyse things from every different direction and then reflect for a long period of time and then gather more information to check before acting.

He said that it was a transition everyone needed to make as they moved from the academic world to the "business world". This is also something that is alluded to in the book "Blink" by Malcolm Gladwell. Don't let someone else "win" the customer.

Timing the window is critical

Something I was taught in business school, and have been "lucky" with since, is timing. If you set up the company to "sell it", (which if you are reading this BVCA publication, must at least be something you are considering) then you must be mindful of which companies might have an "appetite" for buying a company like yours.

You must also be mindful of what your competitors are doing. If all your competitors get bought by the likely acquirers, then you will "miss" your window to sell your company. Another window might be a very long time in coming or might not come at all. Keeping a close eye on the target acquirers and competitors is something you should get from your independent directors, VC backers and angel investors.

It takes more time than you will think

I had to laugh recently when a friend of mine (also an entrepreneur) reported "I am on the seventh year of a two year project". He had floated his company, and was still very passionate about it. Customers don't always adopt things as quickly as you think they will... even though they should!

Different investors have different agendas and interests - you need to reconcile them

Before I floated my company, angels, VCs and trade investors had invested. I did not realise at the time the extent to which the interests of these parties could differ or the amount of time that it would take to reconcile them so that I could get the company through the next stage of its development.

Make sure that you anticipate this and that you work out how to pull them into alignment beforehand so that there is no chance their "non-alignment" can derail a sale/IPO.

Angels/Trade Investors are great! Angels/Trade Investors are horrible!

I had some terrific and some terrible angels in my companies and the companies I have invested in subsequently as an "angel investor". One thing is clear: Angels are not created equal! My best angel story of them - he helped the company through everything including the IPO and subsequent acquisition of the company.

I have also seen some angels too busy running a portfolio of their interests that they did not have sufficient time to devote to the company. These types slow down the company and ultimately it is best to ask them to leave the board. The same things can happen with trade investor representatives.

Lesson to learn: make sure that the persons on your board have the time and inclination to help you grow your company as quickly as the opportunity will allow.

VCs are great (my own) VCs can be terrible (vicarious)

I was lucky with my own VCs. They were super smart, experienced, ambitious and great people. They created all sorts of opportunities for the company and helped us overcome a variety of obstacles that are experienced when companies grow very quickly. On the other hand I have a variety of friends who are entrepreneurs and have not had the same experience.

Be very sure about the value your investors can add and make sure you ask the entrepreneurs who they have backed, how they add value and what they are really like after the "deal" has been done. There are also sites which help you see what other entrepreneurs think - www.thefunded.com.

Another thing to bear in mind is that there are many people who will claim they can "help" you get financing. Bear in mind that for them, it is just a deal that they will make commission from; they will not need to live with the consequences for decades.

Forecasting is something that needs to be done all the time - is there gold in them there hills?

It is even more important after funding to check the information you put in your business plan forecasts is correct. Is the pricing right? Adoption as you thought? What about retention? Otherwise, you may find that you run out of the money you raised faster than you anticipated.

Cash is King and you really really really don't want to try to raise money when you are out of it. If you are a great scientist or deal-doer, then make sure you get someone on your team who can keep track of the cash.

It is hard, but not impossible to lead a balanced lifestyle

Given that I have chaired board meetings from the labour suite of a hospital and I was five months pregnant with my second child when my company IPO'd, it seems a bit rich making this statement, but it is important to try.

I don't think it is really possible to keep things in balance everyday, but try to keep an eye on it. You will always need your health, family and friends and you will be able to keep up the marathon if you maintain them. Business is a marathon, not a sprint.

If you don't try, you will never know

It is hard to describe what it is like to have millions of customers using the services of a company that you created. It is also hard to describe what financial independence feels like.

It is also hard to describe what it feels like to know that most of the people who backed you made a lot of money from doing so. Just suffice it to say, it feels really good. Go on, give it a go!

There are a lot of really big bad problems that need to be fixed difference to the world we live in and will leave to our children and grand-children. How good would that feel?