Unfortunately, lost in too much of the "dramatic" coverage of the Facebook IPO has been the real lessons to be learned for those interested in successful technology and growth company investing.

Part of the confusion is understandable. An IPO is a purposely dramatic event - made so by Wall Street needing both to justify fees and to "arouse" investors from their varying states of boredom, apathy, discouragement, and distraction.

And for a uniquely high profile deal like Facebook, the media also plays a less than "innocent" role.

Let's call this the Oprah Winfrey Network effect - or the idea that a good majority of the public just isn’t all that interested in hearing the "mom, peaches and cream" Mark Zuckerberg success story over and over again.

Rather, tales of trading "irregularities" and of the "little guy" being taken advantage of by “big banks� makes strangely addictive and popular TV viewing and blogging and tweeting.

And, as long as we recognize it for what it is, a classic "bread and circus" distraction, a little bit of is mostly harmless.

But, when it rises to a level where this is where most of the coverage is focused, well that is both a problem and a huge lost opportunity to communicate the essence of value and wealth creation in a capitalistic economy.

It is that the value of a company is solely based on the quality and quantity of its future growth prospects.

This is what has been playing itself in the mostly downward gyrations of Facebook stock since its IPO - sophisticated reviewers deeply questioning whether the company can fulfill on its insanely high growth expectations.

So high, in fact, that for investors in at the IPO price to realize even a market rate of return that Facebook’s future growth expectations will have to be such as to value the company greater than that of any company in the history of the world.

This, of course seems like way too tall a mountain for any company to climb, to say nothing of one majority managed and controlled by a very bright but also very inexperienced 28-year-old.

From this perspective, the central investment lesson of the Facebook IPO should be that earning alpha returns requires identifying and investing in companies that are priced below their true growth expectations.

Now, most unbiased observers - i.e. those not making markets in or commissions on trading stocks - argue almost unrefutedly that doing so is impossible in a high profile, high valuation stock like Facebook.

And that the same can be said for virtually any public company part of a major index - Dow, S&P, NASDAQ 100, etc.

Luckily however, there is now a wide, deep, and increasingly liquid world of investable companies that can be bought at prices below “true� expectations.

They exist within the legion of start-up, small business and middle market companies that make up the beating heart of entrepreneurial America.

Once, a long time ago (in terms of development, if not years) Facebook was one of these companies.

And those that invested in it then made returns beyond any and all expectations.

This, identifying and investing in companies with growth prospects to the moon but priced only to go to the corner market, is the game worth playing, isn’t it?

Hard to do?  Of course.

But as the story of Facebook's dramatic rise should teach us so well, far from impossible.

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To help you to be more productive (and stress-free) during this new era of "crowdsourcing," I put together a list of 23 websites and services that let you harness the power of the crowd, or otherwise help people more effectively work together through the Internet.

Most of these are hubs that brings a wide variety of people together from around the world with some sort of value to exchange. It's amazing to see how this has been done in matching freelance service providers, and now business funding from multiple donors online.

What's also interesting is to see how specialized a lot of these sites are. It used to be that Elance and Guru were the only two places to go to hire people. Now it seems there is a site for every specific kind of niche freelance needs, as you'll see.

So here are 23 virtual platforms and tools that are gaining in popularity and also stand out for their uniqueness, ideas they provoke, or just plain being cool.

• Elance, Guru, and Odesk - These are the 3 old favorites for finding contractors that still got it. I suggest posting a project on each of these and hiring the best from among the total responses.


• OnlineJobs.ph - A subscription site that gives you access to hiring skilled workers in the Philippines directly, often for $300-400 per month full-time!


• Amazon's Mechanical Turk - this is a marketplace where you can request tasks requiring human intelligence-tasks from getting questions answered to writing product descriptions for you.


• Fiverr - It amazes me all of the things you can get from people here for just $5. Professional voiceovers, fast logo designs, and all kinds of writing and search engine marketing gigs are available here.


• 99Designs - a great place to get multiple designs or logos made BEFORE choosing a provider to pay. This is valuable if you've ever paid someone to make a design you didn't like.


• Hatchwise - This site is nearly the same as 99Designs. I've used them both but have no real preference. Both are worth checking out.


• Etsy - this is the "Ebay" of handmade goods. Many entrepreneurs and small businesses test-market new products here first to see what sells better before investing more in promoting it elsewhere.


• Kickstarter - The largest crowdfunding platform for creative projects and endeavors. It uses an all-or-nothing funding system, where donors' funds will not be transferred until you reach your funding goal, and reimbursed if it isn't.


• IndieGogo, RocketHub, FansNextDoor - These sites operate just like Kickstarter.


• DonorsChoose - Backed by Oprah Winfrey and Stephen Colbert, this site makes it easy to donate (as little as one dollar) to any one of a long list of charities, with total transparency.


• 8-bit funding - a crowd funding site specifically for video game developers. Probably not your specialty, but see how there's a niche for everything? Google "your industry + crowdfunding" and see what's out there. Appbackr is a similar site, but is specifically for mobile phone apps.


• RetailMeNot - this is a site where you can get (or post) coupon codes for business services and supplies at significant discounts, like office supplies or even press release submission services.


• ChaCha - A question answering service you can text your questions to get answers on your mobile phone in a few minutes. It's helpful when you're super-busy and don't feel like looking something up.


• 37signals - Probably the simplest and best Customer Relations Management software I've seen for the price (Highrise) and also project management (Basecamp). With everyone on your team able to make and access notes, files, tasks, and emails about a customer or prospect, it makes life a lot easier.


• Skype - a must-download if you hire anyone overseas, for their audio or video chat feature, but also because their Instant Messaging system is just plain handy. It's nice having a record of every conversation with someone in one place, as opposed to a bunch of archived emails.


• TomsPlanner - A good way to manage projects if you're visually-oriented without having to learn to use Microsoft Project. By the way-if you're in business, you manage projects. It allows you to list action items and schedule them in order, in a printable Gantt chart that gets everyone on the same page about who does what and when.


• Quickbooks Online - If you're still using an older version of Quickbooks, consider getting the online version. The monthly cost isn't fun but it's worth it with the time you save. It imports your online bank transactions right into the register so there's not a lot of re-typing.


• SaneBox - This one will change your email experience by making it sane again-a lot faster than by organizing and checking a bunch of folders yourself. There are even timed folders like @SaneNextWeek and @SaneTomorrow that will make your emails re-appear when you're ready to deal with them.

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If you've been following the crowdfunding phenomenon, you've seen the swift rise of small businesses and entrepreneurs that have been getting funded by everyday people-through specific sites on the Internet that put it all together, like Kickstarter.com.

Instead of trying to find the one donor to contribute 100% of your funding, you can post your project online, spread the word about it, and may end up getting smaller donation amounts from tens, hundreds or even thousands of people.

The overall trend is that the people who fund or invest in crowdfunding ventures want transparency in their investments. They don't want to be far removed from their money as with stock market investing, where they have very little control, and insider information is not allowed in the decision-making process.

With a crowdfunding campaign, people of all incomes will be checking out your project and assessing whatever opportunity you offer to them in exchange. Importantly, just as you want to know the demographics of your customers, you also want to know exactly who your "typical" or "ideal" crowdfunding prospect is, so you can attract and influence them to invest in your company.

It's all marketing - identify your target market, position your offering properly, seal the deal!

So here are some interesting facts about what types of individuals are more likely to invest in your company via crowdfunding, according to an ADCI survey asking thousands of Americans asking them just that (FYI, ADCI stand for The American Dream Composite Index(tm),  which is a survey conducted by Xavier University's Williams College of Business).

Keep these survey answers in mind when planning your funding campaign:

• People over 34 are less likely to provide crowdfunding dollars.
  
  While those in their 40s and 50s are now getting on Facebook and social networks like never before, and making plenty of purchases online, they're not using it for social connecting like younger generations are - which crowdfunding is very similar.


• Females typically evaluate businesses themselves before investing, while men take greater risks and often invest based on the suggestion of a third party.
  
  To me, this means that it's better to put all the information up for potential crowdfunders to see, for those who want to know the complete facts to analyze themselves.


• On a percentage basis, Caucasians are less likely to provide crowdfunding than other ethnic groups in the US. Also, Caucasians and Asians are more likely to invest in businesses they don't have an existing relationship with than African-Americans and Hispanics.


• People with incomes of $100,000 or more are most likely to engage in crowdfunding. [This does seem to contradict a little with the first statistic that crowdfunders are younger, but does point to the fact that young (aged 25-34), affluent people are the ideal crowdfunding candidates.]
  
  But plenty of people with incomes closer to median ($40,000 or more) will still contribute, and there are many more of these individuals to reach through the Internet.

Now compare this demographic information with what you know about your existing or target customers. If they're people in their 20s and 30s, they may be perfect for crowdfunding your venture.

If not, it doesn't hurt to announce it to them anyway when the time comes. You also know people within your own personal and business network that you can announce your project to, as well.

And you might use it to determine the types of ads that you run and for whom they appear, should you promote your funding project with any kind of paid advertising. Or, you may find that the opposite is true - this is why we always test and track our marketing.

Suggested Resource:  I hope you found the results of this survey on crowdfunding prospects' preferences to be helpful. I've identified even more strategies and tips to ensure you succeed with your Crowdfunding raise. I put them all together in a simple-to-follow program called "Crowdfunding Formula."

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Obviously the Facebook IPO has absolutely dominated the business news this past week, and for very good reason.

Not only was it the biggest technology IPO in history, but the company in just a few short years has embedded itself into the very fabric of the lives of hundreds of millions of people worldwide.

And the tale of Mark Zuckerberg and that of the founding and the beyond supersonic growth of the business is exactly the kind of feel good, incredibly inspirational entrepreneurial success story that America and the world desperately need.

So yes, the Facebook IPO is greatly inspirational.

And its product is off the charts awesome - intuitive, fast, elegant, user-friendly software as a service that allows networks of people to share and connect with a speed, ease, and breadth like never before in history.

So Facebook is great.  Facebook is cool. I have and regularly use my Facebook account as do a lot of people (though by no means most) I know.

But moving forward, as a business with real big legs, of that I am not so sure.

You see, Facebook falls into that category of things that are nice and interesting and kind of fun - all of which of course are very good things and ones on which you can build a very nice business.

Think fashion, music, and most forms of entertainment.

But does Facebook really feel like something that anyone really needs?

And it goes deeper than that.

You see, Facebook, for lack of a better word, for too many people, even its most active users, is actually quite annoying.

Now I admit that a lot of my evidence and thought process here is anecdotal, but really when was the last time that you asked someone their opinion of Facebook they came back with anything other than some variation of the below:

"I have an account but I don't really use it�

“I just don't get what the big deal is"

Or yes, the bane of all of our Facebook’s existence:  "I just can't stand people on Facebook who just brag incessantly about how great their lives are and do so like 42,000 times per day!â€�

Okay, so there is a strong argument, like with many new technologies that all of us just really don't know how to use Facebook yet.

And as we do, the value of the product will naturally increase and the annoyance factor will go down.

But in the case of Facebook, I am not so sure.

The best analogy I have to make on this point - and not coincidentally, the company that Facebook is most often compared to - is Google.

Google, from its first days, gave users an experience that was both incredibly exhilarating and useful.

How many times have you interfaced with a Google search and just been blown away by the speed and accuracy of the results?

And here is the key point - how many times have you done so in an "economic" frame of mind - i.e. searching for a product or service for which you were in a buying mode?

This strong intent of most Google searches is at the heart of the unique usefulness for advertisers and thus the vast and awe-inspiring profitability for Google's business model.

Now let's compare this to Facebook.

Sure, it is interesting to see what some long-lost and distant connections are up to.

And yes, this "voyeuristic pleasure" does make the Facebook experience strangely and uniquely addictive.

But, is so doing really solving an obvious and pressing problem?

It is fine if it doesn't, but at the level of current valuation of the company, the assumption is that Facebook will be solving the kinds of problems that people would pay far more for than the very obvious, pressing, and actionable ones that Google search does.

My gut tells me this won't happen.

Facebook will remain a cultural icon, but as a big, public company its monetization prospects will most likely resemble that of other "nice to have" technology services that inevitably disappoint on their so very high expectations.

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To be effective, your marketing efforts depend on targeting the specific customers (and potential customers) who will produce the best results for your business.

No company, no matter how big their budget, can afford to spend precious marketing dollars on too wide of a group of people. You just can't be everything to everyone.

You can create fast and cost-effective growth however by identifying your core customers and focusing your marketing activities on them - attracting them, selling to them, and providing the right customer support and retention.

This doesn't necessarily mean to focus on customers who buy the most, though that is the most important criteria in a top customer. There are also the "Influencers" who are the most vocal or respected, and spread the word about you to others - very valuable, even if they don't buy more than other customers.

Who are Your Top Customers?

It's easy enough to tell which customers of yours buy the most. Look at sales receipts or customer information to see who has made the most purchases, or the largest dollar amounts.

Sort out the 20% of customers who have bought the most from you over time, and that's your target group to which you want to focus your marketing (mainly to find more potential customers like them).

Then gather whatever other information you have about these customers and see what they have in common. While every customer is different, you'll notice there are certain trends and common characteristics among your target customers.

The easiest and primary information to get about these customers is their demographics - the directly observable characteristics that describe them (as opposed to psychological characteristics such as preferences, needs, motivations, self image, etc.).

Find out their basic demographic information

This includes basic facts:

• Age
• Race
• Gender
• City/Zip Code

And also some less apparent information:

• Income
• Occupation
• Marital status
• Children

And if you serve business to business customers, demographic information will include information such as:

• Size of their business (in revenues and/or personnel)
• Title/function
• Purchasing/decision-making authority

How to turn your customer knowledge into gold

Time for a little alchemy...suppose you're going through your list of top customers and find that the majority are married women in their thirties who live within 5 miles of your store.

What can you do with these four demographic facts? To me, this information could be used in the following ways:

1. Running ads on Facebook that only appear for women, age 30-39, within your city or town. By knowing this information you won't have to pay for clicks and traffic from people who are less likely to buy.

2. Using signs, flyers, or some other kind of print advertising just within the 5-mile radius of your store. This would further saturate your business area and make your potential customers more likely to buy (as it takes 7 contacts with your company or ads on average to get a response).

3. Running an offer that specifically appeals to younger married women; for example, an offer to bring in one's husband and receive a discount, if this is applicable to what you do.

4. Selecting photos for your ads of people who closely match your target customers. In this case, you'd show women in their thirties who look like they live in your city, however that can be represented. Or pictures of happy couples, if appropriate.

5. Using direct mail to target potential customers. Chances are the 5-mile radius around your store is all in 1-2 zip codes. This information is very helpful if you're doing a direct mail promotion. When you buy a mailing list through a service like MelissaData or Listsource, you can select only addresses of women within your zip code. Why spend $.50-$1.00 or more per person if they're not as likely to respond, purchase, or love you?

6. Finding out where these women congregate and then going there or sponsoring and event. For example, if you determine that most of your target customers belong to the local PTA (Parent Teacher Association), sponsor a PTA meeting or event. As a related note, this is why I love airport lounges. Yes, it's nice to stay in a comfortable environment when waiting for a plane, but I love the marketing implications. That is, virtually all of the people I see in these lounges are corporate executives and salespeople that travel a lot. If your business' core customers fit this demographic, then hanging out in these lounges could be a goldmine.

7. Designing your store's appearance and layout with these women in mind. Your store would probably be colorful, aesthetically pleasing, and perhaps "hipper" and less formal than if most of your visitors were Baby Boomers.

8. Conducting research to learn what has been discovered about these women's preferences. Did you know there have been tests showing that women prefer ovals over squares, or purple over red? This information would be very useful when creating a logo, designing your store's outside and inside, and all of your promotional materials.

See all the ways you could utilize this information? This is why big companies spend a LOT on market research and surveys, and ask this information of customers when they buy online, etc. The more you know about them, the better marketing decisions you can make.

But what if I don't have this information about your customers?

Start with what you know

If you're interacting with customers face-to-face, you know their gender and can guess their ages. Your sales receipts will probably tell you customer addresses, so there's the city and zip code.

If you have collected business cards or know your top customers' demographics from memory, write that up as a working profile for now until you can do it more formally.

Then, start collecting their information

The best way to do this is to ask for it! Have a jar on your counter for business cards and a drawing/raffle. Or hand them a short survey form to fill out with 5-8 questions.

Or you can make simple online surveys using SurveyMonkey, SurveyGizmo, or Zoomerang, and then promote the web address where people can fill it out. It helps if you offer them some incentive, like a free gift or chance to win something.

It seems like fast food restaurants are getting pretty systematic now about encouraging customers to rate their experience online or by calling into a hotline.

And last time I went to a new doctor, they had me fill out a "Patient Information Sheet" asking for quite a bit about me medically, as well as about my demographics. See how doctors and dentists collect this so routinely? Make it a part of the way you do things and you won't have to remember.

Have you ever registered for something online and they ask for your company name, company type, your job title within the company, and so on? That's a great example of collecting demographics about a business, for B-to-B sales.

Make a demographic profile

Take your findings and summarize them on one page, for easy reference.

I know several copywriters who have told me that the best way to "get through" to people reading their sales letter or persuasive copy is to sit down to write with a photo of their "ideal" or "typical" person from their target market, and write as if speaking directly to that person.

Photo or not, at least write what you know about your top customers' common characteristics and print it out on a sheet of paper.

Make this profile a quick snapshot to reference that will represent them, rather than going about your marketing haphazardly, or in a less focused manner.

Lastly, do some research

As I said, you should also look for studies and reports online about how people of certain ages, genders, or marital statuses behave differently (from a marketer's perspective).

Lastly, in order to prevent false assumptions, if your main customers fit a certain demographic, for example they are mostly of a lower income, ask yourself if this was intentional, or if your previous marketing efforts just happened to attract them.

Executing on the ideas above will shed light on exactly whom you're working hard to serve, and will aid you in your efforts to find more of them and treat them the way they want to be treated.

Otherwise, it's "Round peg...meet Square Hole."

Here's to focused, targeted marketing...good luck!

Suggested Resource: Growthink's Ultimate Marketing Plan Template allows you to expertly create your marketing plan. Importantly, it allows you to quickly and easily build your target customer profile as explained above, and much, much more in order to dominate your market. Click here to learn more.

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Below is an easy exercise that will boost your profits.

First, list your products and/or services

Create a spreadsheet. In Column A type the names of each product or service you offer.

Second, list your market segments (customer groups)

In the first row of columns B, C, D, etc., write the names of the different types of customers you serve.

For example, if you have a walk-in store as well as a website set up for e-commerce, you will have at least two groups of customers - those who come in to purchase and those who buy online.

Or you may sell to consumers and businesses.

Or you may sell to affluent consumers and less-affluent consumers. Or you might sell different products and/or services to men vs. women.

List all of these customer segments in the first row of columns B, C, D, etc.

Place an "X" in each cell in which you have a combination

To recap, in Column A you have a list of your products and services. And in the top row of the other columns, you have a list of all your customer segments.

Now, place an "X" in each cell in which you offer that product or service to that customer segment.

For example, if you sell insurance to affluent consumers, then type an "X" in the cell that intersects these two variables.

The result will be a chart with "X"s showing all your product/service and customer segment combinations.

Next, write down a list of all the combinations you found. For example, your list might include:

• insurance to affluent consumers
• insurance to businesses
• home security to non-affluent customers
• etc.

Determine your revenues and profits for each combination

For each combination, type in how much revenue and profit you generate from it.

In many cases, you will find that one combination dominates your profits. Or that one customer segment (among several products and/or services) buys the overwhelming majority of your products and services.

Importantly, in completing this exercise, you may also identify combinations you didn't know even existed.

Sharpen your marketing focus

Most entrepreneurs and business owners place equal marketing focus on ALL their combinations of product/service and customer segments.

But, smart entrepreneurs and business owners place more emphasis on the combinations that are proven winners. Now that you know your winners (i.e., the combinations that are generating the most revenues and profits for you), focus on them.

How?

Using the example of "insurance to affluent consumers" being a winning combination for you, here's what you should do:

1. Do more marketing to them. Figure out how can you reach more affluent consumers. Perhaps stop doing general advertising that reaches both affluent and non-affluent consumers and do more targeted advertising like direct mail or cable television. Or perhaps there's another company serving this clientele with whom you can partner. Etc.

2. Better tailor your marketing to them. Rather than having advertisements that mention several of your products/services, create ads that solely focus on your insurance offering, since this is what generates the most revenues and profits. Likewise, since you know the specific customer segment you want (i.e., affluent individuals) use terminology and images that will specifically appeal to that segment.

Most entrepreneurs and business owners make the mistake of trying to be all things to all people. As a result, they water down their value proposition to the customers that give them the most revenue and profits.

Rather, by identifying your most profitable customer/product combinations and focusing your marketing efforts to them, you can quickly grow your revenues and profits, and distinguish yourself from your competition.

Suggested Resource: Growthink's Ultimate Marketing Plan Template allows you to expertly create your marketing plan. It will help you fully leverage your most profitable marketing combinations and dramatically increase both your revenues and profits. Click here to learn more.

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One of the key objectives of the recently passed JOBS act is that it will “open� the now 11 years and counting "shut� window for initial public offerings.

Hopefully, it will help. Because golly, when it comes to the IPO market and public market returns in general, help is needed in a big way.

How bad is it? Since the Internet bubble burst in 2001, the number of IPOs hasn’t recovered to even 1980s levels.

That's 30 years ago, folks.

For perspective, before 2001 over 40% of all venture capital exits were via initial public offerings.

By 2010, that percentage had declined to a mere 3%.

Or, in hard numbers from 1990 to 1996, 1,272 U.S. companies went public.

For the period from 2004 to 2010 a mere 324 did.

Not unrelatedly, since the bottom has fallen out of the IPO market, the performance of the public market as a whole has been dreary to say the least.

Let’s call this the Boston Celtics phenomenon. Twice in the last 20 years the Celtics have had great teams decline as they “got oldâ€� as they didn’t sufficiently “re-invigorateâ€� with younger, fresher players. 

And aren’t our public equity markets - after more than 10 years now of only a handful of dynamic, innovative companies being added to them in any meaningful quantity - like that too these days?

The major stock market indices certainly seem to indicate so, with the Dow and the S&P and the NASDAQ trading today basically in the same range as they were 11 years ago.

So the hope of the JOBS bill is to encourage more “emerging� companies to take the IPO plunge via relaxing regulation and reporting requirements for smaller, younger companies as they go public.

Will it help?

Sure but…

…the bill will not in any way alter the technological and global macro-economic forces that:

A) Just make it far more interesting and possible for private companies to do and have everything that public companies do - from big multiple exits (see Instagram), to growth capital (see the robust world of hedge and private equity funds), to liquidity (see Sharespost, Second Market) - without the headache of a public listing; and,

B) Seem to indicate that even when companies do go public that it is almost a sign that their best innovation and growth days are behind, and NOT ahead of them.

Sure, there are exceptions, but in a world driven by SaaS, by open source, and by the “app store� phenomenon, the cost of innovation - and the cost to disseminate that innovation globally - has dropped so far and so fast that the days of needing a public market “balance sheet� to innovate seem long behind us.

What does it all mean?

Well, for investors seeking capital appreciation, it is critical to digest that the “big picture� vectors all point toward private companies that remain private being the main drivers of innovation - and thus growth - for as far as the eye can see.

Now translating this overriding point into a specific, private equity investment strategy is hard for sure…

…but the alternative of looking to public stock market investing as a true growth strategy long ago passed into the realm of that famous definition of insanity as doing the same thing over and over again and expecting a different result.

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In your business experiences, you may have noticed that "selling" is not particularly hard when you have the right product positioned correctly, in front of the right person who wants it NOW.
But, when one of these factors are "out of whack," it can be a much tougher sale to make.

Getting funding from angel investors is the same way. It's not so much about how good of a presenter or salesperson you are (though those qualities help). Because the most important time you spend influencing potential investors is done long before you present to them, even long before you even contact them; it's done when you prepare your company for funding.

You've probably heard the quote from Abe Lincoln, "If I had 8 hours to spend cutting down a tree, I would spend 6 hours sharpening my saw." The point -- you can get a job done with a lot less effort when you are fully prepared.

So how do you prepare?

You prepare by making sure angel investors will want to invest in your company. And they'll want to invest if they believe your company has great potential to achieve a liquidity event, and one that enables them to earn a significant return on their investment.

Trust me, you're not going to show them that potential with your passion and enthusiasm alone, or a killer presentation. There are certain criteria that, if your business meets them, will show the angel that you DO have the potential. Here they are below...

Criteria #1: Scalability

This is the potential for your company to achieve significant annual revenues. An angel investor, when no future funding is required, might be willing to invest in a restaurant or website that has the potential to generate hundreds of thousands or a few million dollars-as long as a clear path has been laid out regarding how they could get a sizable return on their investment.

The problem is that some businesses are not as conducive to scaling as others. If you offer a professional services business, you can probably only handle so many customers yourself. Even with an office full of lawyers, for example, you would have to hire and manage more and more people in order to grow.

In a truly scalable business, you can multiply your sales without having to greatly increase your resources. You would simply turn the knob up and an existing infrastructure can handle it.

Criteria #2: High Barriers to Entry

Barriers to entry are those things that make it difficult for another firm to compete against you, such as patents or proprietary technology, a unique location, strategic partnerships with larger firms, and long-term customer contracts.

Having first-mover advantage (being the first to offer something) will give you an initial head start. But rest assured, competitors will copy your idea, once proven. You've got to find ways to keep that advantage by excelling so well at what you do that it will take others a long time to catch up.

Your company will need what Warren Buffet describes as a "sustainable, long-term competitive advantage" and looks for in the companies in which he invests.

Criteria #3: Strong Management Team

Who is running things (besides you)? The angels must believe in and be comfortable with both the founders and the key operating personnel of the company.

Does your management team have relevant experience and successes under their belts? Are they capable of taking things to the next level? Do they advise you, or are you currently more of a babysitter to your managers?

Experiencing massive growth is hard. You need capable leaders who can deal with the unknown and adapt to rapid change. You need people who can figure things out on their own and pioneer new ways of getting results.

The "Who" often comes before the "What" in priority. Get the right people together and they will likely choose the right course among all the options. Keep this in mind when hiring managers-will they be able to grow with your company, or does it seem like they will only be capable of their current role?

Criteria #4: Your Exit Strategy

The fourth criteria in which angel investors need confidence is your exit strategy. This means that the chances are good of eventually having another firm purchase you or your firm going public.

You have to remember that it's typically through your exit strategy that these investors profit from their investment in you. It's hard to get a company to generate enough cash off the top to pay them back over time-the original investment and some interest, maybe, and generating the cash to pay them several times their investment isn't likely (or desirable).

So angel investors count on some event happening that will generate a very large sum of money that pays them back, plus their profit. Unless they want to be an owner of your company forever, you have got to choose and prepare for your preferred exit in advance.

If you plan to sell, that's the most straightforward way to go. Set a time frame for when you'd like to accomplish a sale and work consistently towards that end. If you don't intend to sell, you'll either need to take the company public someday, or negotiate other ways of paying back the angel.

Criteria #5: Being a Local Company Helps

Another important criterion, while not necessarily tied to liquidity potential, is that angel investors tend to invest in local companies. In fact, according to the Center for Venture Research, 70% of angel investments are made within 50 miles of the investor's home or office.

Angels often like to invest in companies that are close by so they can visit them and participate in Board meetings and other events. And for retail businesses like a restaurant, they like being able to drive by and think or say "I'm an owner here."

Criteria #6: The Right Price

Finally, angel investors will only invest when the price is right. If you price your equity too high, angels may not have the potential to reap significant enough returns and will not invest.

If you know a few angel investors or angel groups in your area, find out in advance what kinds of prices and returns they would find acceptable. With this information, you may have to reset your revenue goals to achieve before getting the next stage of funding from angels, ask for less funding to increase their return, or commit to a higher payout if that's what it takes.

Understanding and preparing yourself and company to exhibit these six criteria will help you achieve your main goal-to convince angel investors to write you a check.

And not surprisingly, working towards the same objectives that attract angels will also help your business to be more profitable, stable, and positioned for growth even if you decide not to raise additional funding down the road.

So, start sharpening your saw today. Think about and strengthen your exit plan. Think about how you can build a better management team. And so on. And then, you'll be able to raise all the angel funding you need.

Suggested Resource: In Growthink's Angel Funding Formula, you'll learn exactly how to find and contact angel investors, exactly what information to convey to them and how, and how to secure your financing check. This angel funding video explains more.

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When seeking equity investments, the source of capital is, for the most part, tied to the stage of capital being raised.

You see, equity capital is raised in stages or rounds. The five main stages include the following:

1. Pre-Seed Funding
2. Seed Funding
3. Early Stage Investment (Series A & B)
4. Later Stage Investment (Series C, D, and so on)
5. Mezzanine Financing

Most companies that raise equity capital and are eventually acquired or go public receive multiple rounds of financing first. Do you intend to go big before selling or becoming publicly-traded?

No right or wrong answer here, but if this is your vision then it's important to consider when negotiating deal terms on earlier stage financing rounds. As Steven Covey said, you'll want to "begin with the end in mind" and not make arrangements with your angel and/or early investors that will complicate later stages of funding.

If it's not your plan to get venture capital down the road, then you'll probably stop in Stage 2-receiving enough funding to boost your marketing, sales, and infrastructure to grow organically from there to the point where you are satisfied or ready to sell.

Here are the five main stages of equity capital:

Stage #1: Pre-Seed Funding

Pre-seed funding refers to the initial capital a company brings in that comes from friends, family members, credit cards-whatever you can get. This could be as small as $5,000 and as high as $100,000.

Though the dollar amounts are lower, this round is more difficult to get institutional funding for ("institutional funding" is when a financial institution, rather than an individual person, funds you). Banks are not ready to make a Small Business loan on a company that has yet to launch, break even, or establish a track record.

Nevertheless, this is when you get the startup money to kickstart your business with the bare essentials needed to begin making and fulfilling your first sales.  Necessary machinery, an initial website, your first batch of inventory-things you can't function without. Put everything else on your "wish list" to buy with revenues from sales or additional financing.

With this funding, the company often perfects its business plan and starts building its management team in order to position itself for its next round of funding. Your first year or two in business is where your dreams merge with reality and take a new form to guide your future efforts.

Many entrepreneurs end up taking their company in a different direction after some time spent testing your initial business model. Take the founder of Wrigley's chewing gum, who began selling baking powder and soap door-to-door and giving away gum as a bonus before discovering people wanted it a lot more than soap.

So during this round, you'll be testing what works and what doesn't. Here, you prepare to scale up the things that do with future funding. It might even be a good thing to not have too much funding at this point of your business so you don't invest too much going in a direction you'll abandon later.

Stage #2:  Seed Funding

Seed funding (also called seed capital) typically ranges from $100,000 to $500,000 and is often provided by angel investors, and is usually structured as convertible notes or common stock.

With seed funding, you hope to grow your business and, at the very least, gain proof of concept. That is, you'll use the funding to build a product or service and prove that customers want to buy it. At this point, you will be ready for institutional investors who can provide funding to scale or rapidly grow your business.

Stage #3: Early Stage Investment (Series A & B)

"Series A" is the term used to describe the first round of institutional funding for a venture. The name is derived from the class of preferred stock investors receive in return for their capital.

The average Series A round is between $2 million and $5 million, with the expressed goals of funding early stage business operations. Providing enough capital for 1 to 2 years of operations, funds obtained from the Series A round can be used for the full gamut of needs-from product development and marketing to employee salaries.

Series B is the round that follows series A in early stage financing. In this round you can generally raise $5 million to $10 million, but can sometimes you can raise up to $20 million in capital or more.

Stage #4: Later Stage Investment (Series C, D, etc.)

Series C, D, etc. (some venture backed companies have raised over 10 rounds of financing) are further rounds of venture capital funding.

Each round may raise between $5 million and $20 million or more. Series C, D, etc. rounds are also typically obtained from venture capital firms and/or strategic/corporate investors.

Stage #5: Mezzanine Financing

Mezzanine capital, often provided by private equity firms, is capital provided either as equity, debt, or a convertible note that is provided to a company just prior to its Initial Public Offering.

Mezzanine investors generally take less risk, since the company is generally solid and poised to "cash out" relatively quickly.

Hopefully this lays out the different types of funding you can get and when. There's no sense going after venture capital if the time isn't right, or if it's not needed to reach your vision.  For most of my readers, the main concern will be preparing your business for angel financing until the time is right for venture capital.

Suggested Resource: In our Angel Funding Formula program, you'll learn exactly how to find and contact angel investors, exactly what information to convey to them and how, and how to secure your financing check. This video explains more.

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One of the hardest challenges of those leading a business is keeping its “star players� happy, productive, and aligned with the mission and key objectives of the company.

This challenge is compounded exponentially in the Internet age - with fast shifting competitive and marketplace realities naturally necessitating that tomorrow’s key priorities and objectives will most certainly NOT be those of today.

As a result, it is almost impossible for everyone every day to be on the “same page.�

Even and especially when doing so seems to many in the company as being contrary to their personal self-interest.

And when these organizational “breakdowns� occur, the wise manager knows to proceed very carefully as these are the kind of “crowded hours� in which business success - and failure - are often defined.

So when this kind of trouble arises, the first suggestion here is to simply take a breath.

Things will fall apart, and even the highest performing employees, teams, and organizations will have their bad days.

Then, try to see these breakdowns as “positive crises.�

Crises that inspire the kind of reflective thinking that can drive organizational design and perspective breakthroughs.

Finally, never underestimate the power of engagement.

Everyone - especially star players - want their voices to be heard, their opinions valued.

Making this happen in an organization in a real, productive, and elevated way is hard and vexing work.

It can easily turn into unproductive airings of grievances.
 
Or gossip.

Or perhaps most insidiously just into an unproductive distraction from the customer - focused work that is so central to the fulfillment of the mission of the company.

But when these “difficult� conversations are properly moderated and bounded, and related and connected NOT to shorter term “selfish� agendas, but rather back to the mission and ideals of the company…

…well, that is when the magic happens.

That is when a team, an organization, and even its most “selfish� star players, truly get on the same page and do great things together.

It may not last for long, and without the continued exertion of spirited and principled and DAILY leadership, it will soon fade away.

But for those that are serious about building companies to last, it is a necessary and ennobling discipline.

And as a lovely bonus, all this hard, principled effort often creates the kind of togetherness, the kind of collaborative elation that we all seek from our professional work.

And dare I say, from our lives too.

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