Life, Liberty, & Happiness

Young Entrepreneur Credibility


ow does an entrepreneur with little or no track record gain credibility? Typically, they gain credibility in two ways—they borrow it and they demonstrate it.

Borrowed Credibility.  When entrepreneurs surround themselves with people who have credibility, they gain credibility themselves. In business, reputations are paramount. When well-respected individuals vouch for an up-and-comer, it is meaningful. There are lots of ways someone can vouch for you as an entrepreneur. They can provide services to your company (great attorneys, accountants, recruiters– if they work with your company it means they were willing to bet on your success). Business leaders can lend their name to the company as an official advisor. They can invest in the company (if industry experts or startup/product/marketing gurus invest in your company, it is a huge vote of confidence in what you are doing). Also, business leaders have no more valuable resource than their time, so if they go on your Board, it is a huge recommendation of you and your company.

When it comes to borrowed credibility, there is perhaps no more important act than the initial introduction you are given to an investor. If you have no track record and you cold call an investor, you have huge reputational obstacles to overcome. This is particularly true because many investors will assume that you were either unable to find someone to make the introduction or too naive to realize the importance of an introduction. Either way, your likely success as an entrepreneur will be sharply discounted. On the other hand, if you are introduced to an investor by someone he or she trusts and respects, you are well on your way to a trusted relationship yourself.

Earned Credibility. The other way first time entrepreneurs gain credibility is to earn it. There isn’t a clear path to earning credibility. You don’t produce a particular amount of diligence. You don’t deliver a particular number of industry reports. You don’t call or email to followup a particular number of times. What you need to do is be really smart and well informed about the business you are pursuing. The best way to earn credibility with investors is to have good answers to the questions you are asked. Credibility also comes from doing what you say you are going to do. It means following up on a question from a meeting. It means hitting numbers you say you will, or closing on a customer you expect you will.

If one of these techniques for garnering credibility is good, all of them together are great. Get introduced to an investor by someone he or she trusts. Build an advisory board and board of directors of industry experts and admired professionals. Do your homework — know everything there is to know about the market you are pursuing. Welcome questions about your business — answer them well when you know the answer and admit when you don’t. And always do what you say you are going to do — whether that is delivering promised followup materials or hitting your numbers. In combination, these techniques can give any entrepreneur, no matter how young or inexperienced, the credibility necessary to attract great investors.

About Dr. Michael Burcham

Michael is an executive coach, entrepreneur, investor, and strategist with 30 years of experience leading investor-backed, high-growth organizations.

“I built and sold a $40M company with Dr. Burcham as my mentor. This is the thing: if you EVER get the opportunity to learn from this man, from that moment forward, you’ll list him as one of the most influential people in your life, even if you live to be 90. And, you’ll know how lucky you were to have that opportunity and you’ll immediately say YES to any chance to be in his presence again—his wisdom is that impactful.”

Sherry Stewart Deutschmann

Former CEO, Letter Logic

“If you are looking for a trusted mentor and coach for yourself or your leadership team, I highly recommend Michael Burcham. He has worked with me as my executive coach for well over a decade now. Our conversations and his feedback have helped me sharpen my critical thinking skills. He’s a trusted advisor that I can confidentially speak with about any issue—and I know I’ll get valued feedback. I highly recommend him.”

Ryan McGrath

CEO, Asset Living

“Dr. Burcham’s depth and breadth of experience makes even the most ADD entrepreneurial leader sit up and take notes! His coaching skills bring out the ‘best you’ possible. He selflessly shares the good, the bad, and the ugly—leaving you with an authentic and moving experience sure to spur action and professional growth!”

Julie Lenzer

Director, U.S. Department of Commerce


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