Here are the three steps I’ve taken to succeed in “dark” times:

Identify When the Economy Will Take a Turn

• Wall Street. Look for rapid drops in major markets for consecutive amounts of time. When this happens, most investors start to sell and take higher losses, which in turn creates great opportunities for savvy investors. The common phrase associated with smart investing is, “Buy low and sell high.”
• GDP. Gross domestic product is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period. When GDP is continuously dropping, it’s a sign that a downturn is close.
• Loan ability. Talk to your banker on a regular basis; look for them to tell you that they aren’t loaning much and qualifications are becoming more obtuse. When banking opportunities start running dry, it squeezes the economy as well as business owners. This can create great strategic opportunities if you have money in the bank and are looking to buy out competition.
• Inflation. This means your dollar can’t buy as much in a short period of time as it could before.

When all of these signs occur, there’s a strain on businesses and consumers, giving strategic business owners great opportunities to buy.

Prepare Yourself to Take Advantage

Over the past several years, I’ve raised several rounds of funding for my startups. I’ve also helped several other startups with their fundraising processes as a fundraising coach. While there’s no easy way to fundraise, there are some tips that bring method to madness:

Plan Ahead

If you know you’ll be fundraising in the next three to four months, start planning ahead of time. Depending on which round you’re looking to raise (seed, Series A, B, etc.), prepare a list of potential angels and/or venture capitalists. You can start with an online search or ask friends who are entrepreneurs or investors. If you’re part of an incubator, then this exercise becomes relatively simpler.

During our first round at my last startup, we didn’t follow this approach and were rushed in the end. This is never a good thing, as your tendency to make sub-optimal choices is higher when the clock is ticking.

Do Your Homework to Establish Fit

I can tell you from experience that a lot of entrepreneurs, especially first-timers, don’t do a good job at this. Once you have your initial list ready, refine it based on investment thesis and fit.

The first step is relatively easy since you can find that information (sector focus, what stage they typically invest in, fund size etc.) online by looking at their website and portfolio. Fit requires more work: Given that an investor’s inbox is always filled with cold outreach, they tend to mostly take meetings that come through a trusted source to make the process efficient.

Try to find people in your network who can introduce you to the angel or someone at the firm (preferably a partner) if it’s a fund. You can also ask for introductions to founders of portfolio companies. Founders are a pretty powerful source for connecting with angels/VCs; they’re in the “trusted circle” since the investor has already made a bet on them. I gained several of my investors through founder recommendations.

Don’t Ask For Money Right Off the Bat

The reason you do this exercise three to four months in advance is so you don’t pitch or ask for money in the initial meeting. Yes, you heard that correctly: You should first get to know them, build a relationship and evaluate if they are interested in you and your idea. But what exactly do you talk about?

I’ve heard great advice on this from different experts. Ask them for their thoughts on the sector and hold a genuine brainstorming session on your business. Keep it brief, ask for advice, and ask if they can help with recruiting and sales leads. If they agree to help, that’s a positive sign. You can mention that you might be raising a round at a later date, and inquire if they’re interested in setting up a meeting closer to the process.

We followed this process for my current startup, and it has worked out quite well. This is because both sides know what they’re doing, but neither side is desperate nor under pressure to make a decision. This will also help you further refine your list for the folks who might be hot leads when you start raising in a few months.

Prepare Your Pitch

I’ve advised multiple startups on pitch preparation, and almost always, founders take too long to get to the point. Hit your big points on the 30-second, one- and two-minute marks of your pitch, or else your chances of success diminish substantially.

Yes, you may have already heard this before, but let me repeat it: follow the KISS principle (Keep It Short and Simple). Keep the main deck between seven and 15 slides, and pack all the powerful content up front. Be sure to include slides on your team, PSR (problem, solution, results), market size, a competitive overview with your differentiation, current metrics, future milestones and projected use of funds.

You can and should have a detailed appendix, but remember, it’s an appendix for a reason. It should be used to offer additional details and answer specific questions.

Be Aware of The Nuances of Different Stages

Having raised or helped startups raise multiple rounds, there are clear differences in fundraising strategies depending on the stage. This is especially important for first-timers. Depending on your round, here are a few best practices:

• Seed/Angel. In this stage, it’s mostly about the founding team, so focus on that. Investors are interested in the idea, but they’re more interested in you. Once you like an angel or early-stage investor, make sure you hold several meetings in both formal and informal settings. Showcasing your working prototype, minimum viable product, customer pilot results or initial traction are big pluses.
• Series A. These rounds are mostly VC-led. Unless you’re inventing new technology that will disrupt the market (think Google search), investors will want to see that you’ve established product-market-fit and have gained some initial traction with actual customers/users. Here, having a list of referenceable customers will come in handy. It’s an in-between stage where you’re still in the early adopter curve, hence team and vision still play an important role. Be sure to show how the raise will take you to the growth stage.
• Series B and beyond. This round is all about growth metrics and numbers. A charismatic founder or team can help increase valuations, but don’t expect to get top investors on board using only your story with no actual metrics behind it. Be sure to have conversations in advance with your board, advisors and potential investors on what it will take to raise the next round, and manically focus on delivering those numbers.

The next time you’re looking to fundraise, start early and go through the process in a more structured manner. Fundraising isn’t easy, but the above tips will make the process more efficient and prepare you for an optimal outcome.

R&D Tax Credits

Tax credits give you discounts on federal and state taxes, if you satisfy all of the qualifications. (Not all states have a credit, so check your state’s laws.)

The R&D tax credit has been around since 1981, applying only to income tax, until recently. Starting in the 2016 tax year, the R&D tax credit can be used to offset payroll tax for qualifying startup companies. Previously, the credit was only allowed to offset income tax, which most startups don’t pay. Now, early-stage companies who haven’t been profitable don’t have to miss out; they can claim the credit too. These changes provide substantial competitive advantages and growth opportunities via tax savings and cash flow. Previously these options were utilized almost exclusively by Fortune 500 firms. These larger firms have received billions in credits annually over the last thirty years. Now startups can access those same credits.

On average, the credit equals 6-10% of a company’s R&D cost, including but not limited to wages, supplies and even contract researchers. The maximum cap annually is $250,000, which means your company could save $1.25 million over five years.

Does My Company Qualify?

To receive the R&D tax credit, your company must:

• Have $5 million or less in annualized gross receipts (that includes companies with no declarable income yet)
• Have five or fewer years of gross receipts
• Have its R&D evaluated and determined valid

Be prepared to devote some time and resources to the testing process. Getting your R&D evaluated and approved is a four-part process. Each part has extensive regulations and intensive documentation:

1. Technical uncertainty: What’s being made new or improved?
2. A process of experimentation: Were alternatives explored? Was modeling done?
3. Technological in nature: Are you using hard sciences?
4. Qualified purpose: Are you making or improving a product as it relates to performance, ability, function or quality? (One caveat: Software and other similar developments that are for internal use only don’t qualify; the work must benefit the public.)

The fields for R&D are varied and popular, and many startups will qualify, especially those in app development, platform design, cryptocurrency, robotics, VR hardware and software, drones and wearables. (A clarifying note: A company that was founded before 2012 can still qualify if it did not generate any gross receipts. For example, a research-intensive firm might have existed for years before generating receipts.)

Using this credit will probably increase the chance of an audit, so make sure you enlist a qualified tax advisor to claim this credit correctly. After your company qualifies for the R&D validation, claim the credit on the annual income tax return, then monetize the credit on subsequent quarterly payroll tax returns. Even factoring in any potential risk, there is a strong positive outlook on the total gains to be had. Firms who think they have eligible activity or want to develop activity as a result of the incentive should move soon to best fully capture the returns possible.

A version of this post originally appeared here.

The anxiety is already palpable (and should be, given taxes are due on March 15 for S corps and partnerships and April 17 for C corps and individuals). I reached out to several of Paro’s tax experts to ask what businesses large and small need to focus on to make it through the season unscathed. Here’s what they said:

It’s Time to Change Your Bad Tax Season Habits

Every year, the same thing happens the closer it comes to tax-filing time: Tax preparers get a bunch of last-minute, frantic clients freaking out about getting their taxes paid on time. Business owners throw tax experts every document they can find, get frustrated when the tax preparers ask follow-up questions and request additional information (which they often don’t have prepared) and end up filing late because they need a new bookkeeper and accountant to fix a multi-month (or sometimes multi-year) mess — not to mention paying out the wazoo for tight turnarounds.

It’s time to get ahead of this headache. How? Preparation is absolutely key to tax success. So to help you prepare, we’ve compiled the 13 most critical pieces of information you need to provide your tax preparer with. If you know right now that you do not or will have some of these elements, talk to your finance team, understand why and come up with a plan in the coming few weeks to get these items together.

13 Critical Items Your Tax Preparer Needs From You

1. Trial balance that reflects balances in each of your company’s general ledger accounts
2. Reconciled statements for the entire year, including bank, investment, credit card and loan accounts
3. Documentation for transactions within the past year that are especially unique to prior years
4. Fixed assets purchased in the given tax year, with information necessary for depreciation, including the year put into service, whether asset was new or used, cost and weight (if a vehicle)
5. Fixed assets disposed of in a given tax year, with the same details as needed for asset purchases
6. Loan documentation that reflects principal versus interest payments
7. Payroll tax returns for each quarter with form 941
8. Sales tax returns from throughout the year
9. Aging details for accounts receivable and accounts payable
10. New rental, equipment lease or utility agreements and related prepaid expenses
11. Distributions to partners or owners
12. All 1099 contractor information (1099s were due January 31! Here’s what you need to know.)
13. And, finally, if you’re filing taxes on a cash basis but like to analyze your business on an accrual basis, be prepared to explain any adjustments that the tax accountant needs to back out to file on a cash basis.

If you’re looking at this list and feeling a sense of dread, chances are your bookkeeper and accountant have some work to do before they make the handoff to your tax preparer. Reach out to them and ask for the plan. If they don’t have one or take a week to respond, it’s probably time to move on and find someone who gives your business the time and priority it deserves. Above all, know that you’re not alone in this. There’s always someone worse off from a tax standpoint than you. That I can promise.

The first order of the day was to examine the numbers. After reviewing the financial statements, I discovered that the CFO was paying himself dividends as the company was running at a loss. When confronted on this item, he declined our request to defer dividend payments until the company was in stronger financial health. It became clear to me that I had to fire the CFO.

Next, I had to shop around for a financing deal that would consolidate all of the company’s debts — instead of the high-interest line of credit the company was paying too much for. But getting a bank to take a chance on the business was no easy task. At the time, I was working full-time in procurement for IBM where I was responsible for negotiating vendor agreements to save the company money. That experience came in handy. I had to knock on many, many doors. And eventually, I found an institution that was willing to give my small business a shot.

After finances, I had to put in place new processes after discovering that the three main divisions of the company (sales, manufacturing and accounting) worked in silos. I eventually got involved in the business full-time and took over as CEO until the company was in stable financial standing. I later hired a general manager to run company operations. Turning the business around was a huge learning experience. Here are some of the lessons learned, which I hope help you manage your own business.

Know Your Company Finances

No matter how big or small your company is, make sure you understand your balance sheets. I recently graduated with an Executive MBA, but you don’t need to have an MBA to learn how to read financial statements. You can always take a course online to help you get a grasp on your numbers. Always get a second opinion on your financial situation — whether things are going well or not. After firing the CFO, I hired a small accounting firm that specializes in small business accounting. For a small monthly fee, they ended up doing a much better job than the CFO who was costing the company 300,000 a year.

Don’t Be Discouraged by Rejection

When I was looking for a financing deal, I received one rejection letter after another. I met up with several bank representatives. Most were very helpful and gave me good advice but were not able to take on the risk and finance a small business. But I persisted. I kept reaching out, making appointments and showing up, until finally, a major bank agreed to give my business a chance. Without that financing deal, the company would not be in business today.

Surround Yourself With the Right Team

It was during those difficult times that I learned the valuable lesson of surrounding myself with a team that I can rely on. When I took over the company, I realized that the previous management had isolated its vendors, clients and employees. It’s amazing what can happen when you treat everyone as part of the same team, working towards the same goal. When the company was in financial trouble, I reached out to our vendors and asked for extended deadlines to make payments. To my surprise, many agreed to it. It was around that time that I developed my “Let’s Grow Together” philosophy. I’m a true believer in the strength and absolute necessity of teamwork as the foundation of success.

A version of this post originally appeared on Medium. 

The startup journey is similar to a survivor’s journey, and the last person standing is not necessarily the strongest or the smartest, but the person with the most skills who manages to outlast the other players. But before you start your adventure in the mysterious land of startups and possible unicorns, make sure that you are prepared. Here are five key components of the entrepreneur’s total startup capital that you should think about.

Industry

Pick the industry that will be the most advantageous considering the skills and expertise of you and your team. Keep in mind that some industries are more competitive because they have lower barriers to entry and do not require a significant amount of capital. Other industries are less competitive but are more complex and capital-intensive. Pick your industry carefully, and do not disregard factors such as regulations, the velocity of change and emerging new technologies.

In the fintech industry, for example, the regulators are slow-moving and approvals are often required from financial regulators such as Financial Industry Regulation Authority (FINRA) and the Securities and Exchange Commission (SEC). I know this because it took the company I co-founded almost eight months to obtain the funding portal license. The best advice I learned is this: Find an expert who has already been through the same process who you can learn from.

Experiences

Gather as many experiences as possible and develop as many skills as you can. For example, if your software relies heavily on a specific application program interface (API), then make sure you personally have a general understanding of it. This will help when your team is developing the software and during the integration process. If one of your software’s major integrations is payment services, make sure to read its API documentation or ask one of your software engineering peers for some help.

Advice

You likely have access to knowledgeable advisors, from VPs of major startups to successful entrepreneurs. Remember that every piece advice should be taken with a pinch of salt and some careful consideration — the VP of engineering at a fashion tech company might not be the best person for fashion advice but would be a great person to talk about software architecture.

Try and find the genius in each advisor and to focus on asking them for advice relevant to their expertise. For example, one of my advisors and mentors is great at building competitive advantages and is, therefore, my go-to-person when I have strategy questions.

Scratch

Don’t reinvent the wheel. Figuring things from scratch takes time, energy and a lot of trial and error. Look at what others have been doing and how you can take advantage of what they have built.

Besides looking at what the direct competition has created, you can also talk to experts in the field who can give you insights on how to build or improve the process. You can also look at similar processes in different industries. One way that you can save time is to use open source codes for your prototype. This will save time and energy both coding and debugging.

Network

Every entrepreneur will tell you how important it is to build your network of investors and professionals within your industry. You also need to build a network that can help you on a project basis — individuals to talk to about creating a press release, financial modeling or your hiring process. This can be really helpful and save you significant resources versus relying on freelance websites to find a suitable person for a one-time assignment.

In the past, there has been so much emphasis on raising capital, but that’s not the only factor an entrepreneur should consider. Increase your chances of success by raising your startup capital in terms of skills, knowledge and expertise.

What is It?

Bitcoin is a currency. It can be sent digitally. It can also be stored securely, either digitally or on paper. Unlike traditional money, it can’t be easily forged. Unlike traditional currency, bitcoin transactions are both public and largely anonymous.

Why is Bitcoin Valuable?

Bitcoin does a number of things that traditional money, gold, credit cards and checks do, but it does it without a central bank. Bitcoin also does it digitally and in a way that is very difficult and arguably impossible to forge. These characteristics are so desirable that many people are trading traditional currencies for bitcoin. In fact, so much of this is happening that it’s causing the price of bitcoin relative to traditional currencies to skyrocket, creating an investment opportunity for many people coming into the currency.

Like other currencies, bitcoin’s value is driven by supply and demand. Bitcoin has a limited supply (today there are only 16 million bitcoins and the currency will only ever have 21 million coins). This is a limited global supply but an in increasing global demand. Bitcoin is becoming more widely accepted and easily transferable. It’s now possible to send money from person to person and country to country, without it going through a bank.

While this may seem basic (that’s the point), it’s transformative. It’s was previously impractical for people to be their own bank. You could store money in a vault or under your mattress but it was difficult and impractical to do so because ease of transfer and portability are important. This is why centralized digital payment companies like credit cards, PayPal and Venmo took off. They made payment easy and portable. But these methods are centralized. Anyone who has had their credit card stolen or had their PayPal account locked up knows how crippling this can be. The differentiator of bitcoin is that it’s decentralized.

Why Does Society Think Bitcoin is Valuable?

• It can store your money.
• It can protect against forgery.
• It can be used to pay people securely.
• It can be exchanged globally for goods and services.
• It can appreciate in value (investment).
• It is decentralized so that no government or individual bank is in control.

Technological disruption often eliminates middlemen. It allows people to deal directly rather than indirectly. Bitcoin is eliminating the arbitrage of a bank. It allows people to control their own funds directly.

What’s Wrong With Bitcoin?

For all the things that are positive about bitcoin, there are a number of problems worth discussing. These problems are being worked on by teams around the world, and given the decentralized nature of bitcoin, will require consensus to solve.

• Bitcoin is slow. Transactions, sending money and receiving it is slow; currently too slow for real-time purchases. Bitcoin is faster and more secure than sending a check, but it’s often measured in minutes and hours, not milliseconds.
• Bitcoin uses a lot of electricity. Part of the algorithm of bitcoin is designed to make it difficult to create new bitcoins. This process is intentionally inefficient. Because of the rapid scale of the currency, it’s estimated to be using enough energy to power about 2 million homes.
• Bitcoin is currently an unstable currency. It’s so new that it changes price daily in 10 percent swings both positively and negatively. This can equate to even larger weekly fluctuations. I expect it will settle, but it’s hard to tell how long this will take. In the meantime, there will be investment winners, losers and inevitable bubbles.

The Future of Cryptocurrencies

Global wealth is measured in the $100 trillion range and up. Cryptocurrencies, including bitcoin, are in the $200 billion range. I believe that the future will have more cryptocurrencies rather than fewer. My predictions:

• I expect cryptocurrencies such as bitcoin will grow north of 1 percent or $1 trillion in global value in the next year. Over the next few years, I expect it to be 5–10 percent.
• The decentralized encryption technology behind bitcoin (blockchains) will be used for many new things including accounting, medical records, insurance and more.
• New cryptocurrencies may begin to grow even faster than bitcoin as the performance and energy issues with bitcoin become more pronounced.
• When the growth rate stabilizes, we’ll see more personal payment solutions (similar to PayPal) as well as traditional banking solutions built on top of cryptocurrencies.
• Governments and tax agencies will begin to pay a lot more attention. Bitcoin is considered an “intangible property” by the IRS. Expect further regulation and taxes around cryptocurrency to measure and track capital gains.
• Exciting new technologies will become more popular. New currencies and blockchain tools like Ethereum will allow a new breed of apps to be built and run in the cloud. This is still in the experimental phase, but people are already using Ethereum for identity, crowdfunding, voting, and even breeding digital cats (yeah, really.) More complex and sophisticated apps will evolve to use the technology that will further digital currency and decentralized trust.

I believe that many aspects of cryptocurrencies will become inevitable. Not everyone wants to trust banks with their money, but to date, it’s been impractical to do otherwise. The collapse of Lehman Brothers, the fraud at Wells Fargo and others have created new opportunities for bitcoin and beyond. I believe the future is bright for digital currencies.

Warning: Never invest in something you don’t understand and don’t risk money you’re not willing to lose.