WIF AX Accelerator Proves Its Value With Fuego Fino Graduate
Summary: To grow, be a forever student. Are you funding the law firm of that start-up? Are you investable? Focus on revenue growth over profits. Give back or get lost.
Jessica Contreras, (CEO) Fuego Fino, Inc (Left). Barbara Bickham, Managing Director of WIF AX, LLC (Right).
A Student Forever
“Though I have been a serial entrepreneur forever, I realize that having a mindset of being a student, always open to learning, is a plus. To think that because you are in business, you do not need the instruction of an accelerator or incubator, just means that you really do not need to be in business or you have decided that you are going to limit your growth” says Jessica Contreras, CEO of Fuego Fino, Inc.
The WIF AX Team
“One of the most valuable aspects that I bring to the table is my experience in launching and managing companies. I quickly realized that far too many fund management teams lack real startup experience, and they have an investment strategy which is the equivalent of throwing noodles against the wall to see what sticks, which they call diversification. This lack of experience leads them to make costly mistakes, such as the fact that they by proxy end up funding law firms. This happens when the average startup thinks that every document needs to be reviewed or drafted by an attorney, thus 2/3 of their funding goes towards legal costs, paying thousands for documents which a law firm created for another client or pulled of the internet — swapping out names and addresses. It is mind boggling the amount of money that startups waste which funds end up taking a loss on, relying on the law of averages — mixed with one off success stories — which they call Unicorns — to return an investment to their investors. I joined the WIF AX team to change this,” says Jessica Contreras, CEO of Fuego Fino, Inc.
Lesson 1 — The Hard Truth: Most Ventures Are Not Ready for Investors
Many ventures view themselves as being a hot investment, yet they fail to realize that they are not ready for an investment. Some have the wrong structure, such as an LLC (Limited Liability Companies) rather than C Corporation, which investors prefer because there is a clear line of just how much ownership they are purchasing. One of the most common mistakes is to think a business can offer a percentage of ownership of company to an investor, when they are structured as a partnership, which is how many LLC are treated both for tax purposes, and in terms of state filings.
Turning a Profit is not an Exit Strategy
Amazon is one of the most valuable companies in the world; however, it took 14 -years to turn a profit — not to mention Tesla, Facebook, Snap Chat, and others.
Many businesses make the mistake of thinking investors want to see them turn a profit, or worse, that they can return the money which investors put into a business when they become profitable. They use Pro Forma estimates to present the investor with a picture of how they will do this, not realizing that most VC’s view the word “pro forma” as being the equivalent of “my best guess.”
Far too many companies offer an investor no real exit strategy, they are more of an open book, money goes in, but there is no real plan to pay it back, because turning a profit is clearly not the most timely return on an investment.
Lesson 2 — Sustainability is a Part of Business Planning
A company that uses the planets assets must take an active role in preserving the planet. Consumers are requiring firms to become sustainable, and to give back to their respective communities, even those involved in industries such as wine and spirits.
“Once I reviewed Fuego Fino, Inc.’s activities and saw just how much waste was created. I changed how we were bottling, distributing, and giving back to the community. I also thought about how I could make this review and planning a part of doing business, and The Aclyd Group was born. I am not Elon Musk, a person that runs many organizations; however, when you are in business — you are solving a problem or meeting a need — and your operations should accommodate this” says, Jessica Contreras, CEO.
“I am proud to announce that our inaugural accelerator alumna include my partner and friend Jessica Contreras. She has brought many valuable skills to our group, and will go on excelling within any organization which she leads,” says Barbara Bickham, WIF AX Managing Director.