A Special Week For Entrepreneurs
Bill Warner Thursday, November 03, 2011
Triangle Entrepreneurship Week introduces an exciting new approach to entrepreneurial programs. From November 14th to the 18th dozens of focused events will give entrepreneurs an opportunity to directly engage with successful entrepreneurs, business professionals, investors and community leaders.
Starting with NC State’s Entrepreneurship Lecture Series and surrounding the Internet Summit, this innovative approach to advising entrepreneurs is taking place throughout Raleigh, Durham and the greater Triangle area by:
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Digging into the details of several grass root industries,
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Meeting real investors and getting feedback on your business ideas,
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Exploring how to create solid business ideas,
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Seeing how communities foster entrepreneurship,
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Learning how to establish an effective financing strategy,
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Getting the straight talk about how to raise money and
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Seeing some real “green” businesses.
Conducted by a cast of dozens of leading entrepreneurs, business leaders, investors and community development executives, this event promises to provide “up front and in your face” advice and perspective that entrepreneurs need in order to establish their own businesses. In addition, there is plenty of time devoted to collaboration and networking with all attendees so you can discuss all aspects of entrepreneurship and how to get businesses started.
As entrepreneurs, there is a lot to see and take advantage of in this series of events. This inaugural event should lead to many more to come and provide an opportunity for entrepreneurs to make connections they need to create and grow their own businesses. Just having the chance to meet people that have been entrepreneurs will be a gold mine of information and know-how. The relationships established in this event could lead to the information and assistance you need to be successful.
Triangle Entrepreneurship Week is a fantastic opportunity for entrepreneurs, business leaders and investors to connect in a way that we have not seen in this area before and is a must for any entrepreneur in any industry.
This event is proudly supported by: The Idea Hive, Entrepreneurship Initiative at NC State, Poole College of Management at NC State, Scale Finance, Downtown Raleigh Alliance, EntreDot, Inception Micro Angel Fund – RTP, The State Club, Durham Chamber, Bull City Forward, Triangle Blvd, Center for Creative Marketing, and TTYLapp.com.
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IMAF Launches New Angel Seed Fund In RTP
Bill Warner Tuesday, May 03, 2011
The newly formed Inception Micro Angel Fund in
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The Fund is focused on pre-launch companies in several industries, and positions itself as providing the financing entrepreneurs need to finalize their business just prior to launching into the market. Essentially, this financing is what entrepreneurs need to prepare the businesses for the first round of formal angel financing.
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Entrepreneurs are expected to be prepared with a solid business proposition and a well thought out launch plan and revenue model that has the potential for creating a successful return for investors.
“This is a proven investment model that provides local companies, across many industries, an opportunity to obtain funding and guidance needed to achieve success,” says Rich Kramarik, Fund Executive.
Family of Funds
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Although each fund is independent, they operate under similar principles and can syndicate with one another as needed. This brings the power of North Carolina wide angel investing to the aid of entrepreneurial businesses.
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Angel Investors Narrow Their Focus
Bill Warner Sunday, September 12, 2010
As you know, the entrepreneur’s “Valley of Death” is getting wider as the pressures on our economy move many private investors to lower risk venture investments. As they did early this decade, both VC’s and formal angel organizations are moving to more mature companies, widening the valley that is between where entrepreneurs are and where they need to be in order to find money to get their businesses launched.
The Valley Widens
In the late 90’s, entrepreneurs could get funding from venture capital organizations for start-ups. However, that produced a bubble of companies that were not very viable and most of them failed when the bubble burst in 2001 and 2002. In that same timeframe, formal angel organizations moved from providing start-up seed funding to start-up launch funding, focusing instead on companies that were nearly ready to go to market. The result of this was a large void of available funding for companies that were just getting started. I call it “grant land,” where the primary source of funding is public and private grants for feasibility assessment, research and development.
Well, it appears to be happening again. Venture capital firms are struggling for their very existence, as their model is changing to look more like investment bankers, loan operations, or small private equity funds, all driven by the near disappearance of the IPO. Driven by the uncertainty of the economy, private investors within formal angel organizations have become much more cautious as their managing partners move their investment preferences to companies that are approaching predictable profitability. These investors have been hurt badly by the economic downturn and many are moving to much lower risk investments. This further widens the Valley of Death, leaving entrepreneurs with an even greater period of time between their company’s inception and when they can even be considered by angel organizations.
The Reemergence of Seed Financing
To the rescue is coming the reemergence of the seed fund. Over the last couple of years, the NC Capital Highway project, sponsored by the NC Biotechnology Center and the NC Small Business Technology Development Center has been fostering the creation of seed funds throughout North Carolina, including one in the Research Triangle Park area called the Inception Micro Angel Fund (IMAF-RTP).
IMAF-RTP and the other IMAF funds are trying to narrow the Valley of Death by forming a new private equity fund that invests in startup companies at the seed level of maturity. This is at the point in time when they are still completing their proof of concept and formulating their marketing and sales plans; but are able to explain and verify a strong business model.
The Narrowing Focus
As with the original IMAF fund in Winston Salem, and the other IMAF funds that are emerging in Charlotte, Asheville, Greenville and Wilmington, IMAF-RTP is trying to narrow the focus on the kinds of companies it will invest in. These funds are much smaller than formal angel funds and will be the first investors in a company. They are looking for companies that will not need a lot of capital in order to become sustainable growth businesses. Finally, they will favor companies that have the possibility of exiting in less than five years.
Since these funds usually do not make subsequent investments in their portfolio companies, they are looking for the potential of substantial returns when they evaluate the companies in which they might invest.
Attracting New Investors
Many of the IMAF funds are still raising capital and are also looking for new investors. Angel investors are finding this a way to continue their interest in angel investing at a much lower investment cost, even though at higher risk. For new investors, it is less expensive than formal angel groups while providing a broadly diversified investment portfolio.
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Connor’s Kits for Kids
Bill Warner Friday, July 30, 2010
The STEM (Science, Technology, Education and Math) education initiative is certainly gaining momentum throughout North Carolina. Without realizing it, Connor Bernstein started down the same path of being a leader in science education from the time he was in the fourth grade. Now, at fifteen, Bernstein is an emerging entrepreneur with exciting science project kits for kids of all ages; including adults that think like kids.
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The mission of Bernstein's company, Kits For Kids, is to show kids just how much fun science can be with simple, focused, teacher and kid friendly science kits and activities. Bernstein says, “It’s important to give all kids the chance to find their place in the world of science. Science can sometimes seem complicated and mysterious, like it’s only for certain kinds of people. That’s definitely not true! I believe we can never have enough experimenters and innovators. Inspiring our next generation of scientists with exciting, hands on experiences at an early age is what I’m all about. I mean, what’s better than having fun while you’re learning?”
Bernstein founded Kits for Kids when he was in the fourth grade, because he was frustrated with the science kits he bought in stores. He says, “I’ve been playing with science kits and experiments since I was little. I look at things and wonder, why does that happen or how does that work, so it was frustrating when my teachers couldn’t always answer my questions, or when science kits ran out of materials before I was finished experimenting with them. I finally decided to see what I could do about that, and in third grade I began making science experiments and showing them to friends who thought they were really cool. By fourth grade, my love of teaching and my love of science came together when I started Connor’s Kits for Kids. Today, kids all over the country are using my kits and having fun with science! My allowance friendly kits help kids learn about science with awesome, focused experiments, lots of materials, and easy to follow instructions with clear explanations. In fact, I include such a generous amount of materials it’s like getting two kits for the price of just one!”
Bernstein is truly a unique individual. His curiosity is boundless and his energy is seemly unlimited. Bernstein can be found teaching science to school children, as they learn how to make Slime, create Plant Pals and discover Insta-Pets. All of this and more is out of Bernstein’s innovative mind. Remarkably, he has conducted team building sessions for small businesses, having them all make Slime together. Fun stuff!! He says, “I know that inspiring the next generation of scientists starts with positive science experiences at an early age. That’s why I raise funds so I can visit elementary and middle school classrooms at no cost to teachers and lead exciting science activities with students. I also speak to students about the importance of entrepreneurship and the pursuit of life goals.”
But, this is a business. Bernstein has pulled together the marketing program, science project design, packaging, raw material supply, manufacturing and assembly of his innovative science kits. He has sold hundreds of them, and is ramping up to sell thousands with the help of his new website and manufacturing operations.He is running an increasingly complex and rapidly expanding retail business, and has yet to graduate from high school.
Bernstein has big dreams of being a successful entrepreneur that brings value to society through science education. As a high school senior (Yes, a 15 year old senior) at Hawbridge Charter High School in Saxapahaw, NC, he plans to go onto college to further pursue his dream. In fact, he is getting a head start on that by already completing college Chemistry, Biology and Launching the Venture.
His mom has supported him the whole way. She's helped him develop the skills needed to build his company and stay organized. She's also helped troubleshoot issues, and of course, driven him to meetings and places he needs to be. Thanks to his devoted mom and dad's financial sacrifices, he’s been able to afford the costs associated with building his business.
If Connor Bernstein can do all of this himself, with his parent’s devoted help, think what could happen if he got some help from others. He has gotten professional business help and meets with them regularly. Keep an eye on this entrepreneur. He is going to be one of our leading business people in North Carolina.
I suggest that the education innovators of North Carolina learn some things from Connor Bernstein about how to bring science to kids in innovative and effective ways.
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We Need More New Companies
Bill Warner Sunday, July 11, 2010
Sometimes I just sit back in my chair and yell at the ceiling. "What the blazes are we doing in this economic recovery?" We are making no progress and simply growing the government sector that produces nothing that represents lasting economic growth. The administration and Congress are deploying ideas that have not ever worked, both in this country as well as Europe and others.
I am no economist or expert in government, but a key part of the solution seems so apparent to me. We need to foster new business growth by taking the actions necessary to create new businesses through a revitalization of entrepreneurship in America. At the heart of American jobs and economic success is the small business. We need to be doing the things that create lasting viability of small businesses and enable them to prosper.
There's a good article on this in Inc. called Revitalizing the American Dream. Take a look at it each of the sixteen steps for revitalization and see if you agree. The ideas are quite doable but don't go far enough:
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Entrepreneurship should be taught in our high schools, community colleges and universities. We need a new mindset that reflects that going into business for yourself is a fine undertaking, but we need to teach our young people how to do it for real. This would be a monumental undertaking by our school systems, requiring leadership that can make it happen.
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Incubators are fine, but they have to be staffed by real business people that can tap into the entrepreneur's local community. We need to go beyond the limits of incubators and provide pervasive mentoring for entrepreneurs. We need to tap into the wealth of business knowledge that resides with senior business people. Thanks to medical science, we live well into our 70's, leaving many years for retired business people to coach and mentor entrepreneurs. We have a wealth of knowledge that can be put to work to mentor aspiring entrepreneurs. Take a look at EntreDot, an organization that is trying to foster mentorship.
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Government needs to get out of the way, but also enable the way. A partial list of what is needed is as follows:
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Provide tax credits for business investment.
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Reduce the capital gains tax, if not eliminate it all together.
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Reduce taxation on business. We are the second most highly taxed nation in the world, and people wonder why businesses leave the US. Watch the economy flourish at a 15% tax rate on businesses.
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Reduce and eliminate non-productive regulation; including Sarbanes Oxley, OSHA, FDA, healthcare, banking and environmental to name a few that add tremendous cost to business operations.
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Free up angel investor organizations and micro-angel funds from caps on their returns and fees. In addition to grants, this is where the seed money for businesses comes from.
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Government backed education loans for small business programs, but phased out once the private sector can finance this.
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In addition to grant programs provide equity investment in early stage companies
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All tax reduction actions have to be coupled with government spending reductions. A task that should be quite easy by laying a copy of the Constitution next to the budget and start making cuts to all those things that government should not be involved in.
A tremendous economic boost would come from effective action to become energy independent by aggressively exploiting our own oil and gas capacity nationwide. Watch the price of energy drop if we did that; further accelerating company profits.
Basically, we have to let Americans do what they do best. Innovate. Our uniqueness lies in our freedom and an economy based on capitalism. Sure, we make lots of mistakes and the going is rough, but it sure beats any other alternative I have seen from any other country or society ever.
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John Draper - Champion of the Entrepreneur
Bill Warner Sunday, July 11, 2010
Every day of his life, John Draper had time for an entrepreneur who needed help. Now we have lost John to an untimely death, but his influence on the world of entrepreneurs will long be felt.
I am proud to have known John from the time he started the rejuvenation of the First Flight Venture Center in Research Triangle Park. From the first day I met him he always wanted to know how he could make First Flight a success. He wanted to know how to approach state government with a positive message about the future of First Flight. He wanted to meet the movers and shakers in the area. He had a flood of new ideas coming out of his head on how to help entrepreneurs create successful businesses. To say that John had energy is an understatement. He was a gusher of compassion, advocacy and innovation when it came to finding ways to help entrepreneurs.
My closest relationship with John was on the board of the Triangle Accredited Capital Forum, a local angel investor network. John was one of the original board members who helped us establish our founding principles and was a day-to-day critic of where we needed to focus. He was always available to coach the entrepreneurs through their business plan presentations and would go the extra mile or two to help them meet people they needed to meet. We had some heated debates about the viability of businesses that approached us, and in every case John spoke from his love for the entrepreneur and his sincere interest in helping them be successful.
Our hearts and prayers go out to John's family as they deal with John's passing. John will be greatly missed in our community.
There will be a memorial service and celebration of John's life on Tuesday, July 13th, from 3:00 to 6:00 pm, at the First Flight Venture Center at 2 Davis Drive in RTP.
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The Alternative Board
Bill Warner Friday, April 23, 2010
I recently had the opportunity to sit in on a meeting of The Alternative Board (TAB) in Research Triangle Park. We have all been to all sorts of networking meeting and events as well as executive round-tables. All of them are "nice to meet you" and "want to get to know you" kind of encounters. But, TAB is different.
TAB is not a "soft drink"
TAB groups are invitation-only organizations of peer business owners who want to have a serious conversation about how to grow their businesses. Business owners and executives are led by an experienced facilitator who has extensive experience in executive coaching. During a half-day meeting every month, the group of peer business executives conducts well structured discussions about specific business issues that each of them have.
OK, that's the easy part. These discussions have a serious intent. The peers act as they would if they were the board of directors of the company who has an issue under discussion. The business owner is given time to explain their business issue and its significance to the company. The peers then ask questions for further clarification, without making judgments. Once the issue is clarified, the board then gives advice. Quite frankly, the business owner needs to fasten their seat belt, because this part of the agenda is characterized by highly focused straight talk without any sugar coating.
The business owners get some very valuable and unfiltered feedback that they will often not likely hear even in their own management and board meetings. The reason is that none of the peers are wrapped into the business owner's strategy or their company politics, giving them the opportunity of being brutally honest.
Accountability and trust is at the heart of it all
What makes this work is that the members of the TAB group have built a high level of trust with each other and as a result command a high level of accountability. After the business owners get feedback on their issues, the business owners are required to summarize what they heard and say what they are going to do next.
This is where the accountability appears. The business owner has committed a course of action and will have to report results to the TAB group at the next meeting. Of course, all of these discussions are kept confidential.
But, there's homework
Business owners also receive monthly private executive coaching services from their board facilitator using TAB’s small business consulting tools. These skilled business consultants help solve particularly sensitive issues and teach management and leadership techniques that can be immediately put into practice. Each facilitator/coach has extensive top-level business management experience to further enhance the executive coaching sessions.
Take a look for yourself
Being the owner of a business or a top executive is a lonely job sometimes. It is often good to get out of the office and be able to talk with some people who are truly interested in helping you and can be relied upon to give you good advice.
Go to the TAB website to learn more. If you are in the Research Triangle Park area, contact Keith Weaver (keith@smart-state.com) or Jack Ford (jack.ford@balfoursales.com) to learn more.
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Business Mentoring for Entrepreneurs
Bill Warner Wednesday, February 17, 2010
Approximately 26,000 new companies are formed each year in North Carolina. In that same year, over 23,000 companies fail due to poor management and operational mistakes. The statistics are worse in rural and minority populations. This means that good ideas go to waste along with the grant and investor funds that helped get these companies started. As a result, the potential growth of revenue and new jobs is lost also.
If we had assistance for entrepreneurs who are struggling to create successful businesses, the failures should decline considerably. Entrepreneurs should be seeking out business mentors that can help them through the early years of their business.
EntreDot™ Connects the Dots for Entrepreneurs
For the majority of the companies that fail, the missing ingredient that could have ensured their success is basic business-operations “know-how.” This is the void that EntreDot™ fills. At no cost to them, EntreDot™ provides business mentoring to entrepreneurs and helps them make the right decisions as they start and operate new companies.
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Managing in an Uncertain Economy
Bill Warner Monday, February 01, 2010
There is no one single thing that will protect your business in this economy. You need an array of actions to maximize your chances of getting through this downturn and pull you through what might be in store for us, whether it’s further depression or looming inflation.
Cash remains king
Have you tried to get a business loan lately? Pretty tough isn’t it? Better take a look at your line of credit and see if you can get a higher limit and a better interest rate over a longer period of time while you can.
Take a really hard and pessimistic look at your cash position. How long will it last in the grimmest of sales forecasts? Establish refreshed limits on your cash reserves and then create the cost and expense budget that would achieve it.
Have you looked at your accounts receivables and their aging? Do it now. If needed, establish new goals for collections and execute them with discipline.
Of course, manage expense
Take a more insightful approach to managing expense. It’s not just a budget cutting exercise, although you may find unnecessary things to eliminate. More importantly, it’s a matter of getting more for your dollar.
This is about working smarter, being more focused and increasing productivity. Consider things like:
- Taking stock of your knowledge of your market and determine if there are better ways to reach your customer
- Looking for ways to reach additional customers within your current market, with essentially the same marketing dollars
- Creating teams of people that look at process improvements in marketing, sales, development, manufacturing and customer support, looking for ways to be more productive. Constantly ask why we do things they way we do them. Give them a reward when they find substantial improvements
- Analyzing your lines of business, bringing focus on those that are performing poorly. Find out why and fix them or eliminate them entirely
Communicate
Often overlooked, communications is even more important in tough times. When employees are left in the dark about the business situation, they will surely make things up based on any observation they make or rumor they hear. As they make up the situation for themselves, they will take care of communications for you by simply telling others what they believe to be true. Pretty soon, your business picture is painted with a brush you never held.
It’s time to over-communicate. Use whatever means of communication you have to your employees:
- Frequent all hands meetings
- Management meetings with stress on getting information to employees
- Newsletters to all employees
- Make a point of walking around every day, talking to everyone you meet
Most employees can deal with any news you give them, as long as it is the truth and you are realistic. When employees know the truth and the ramifications of it, they will work hard to achieve the company’s goals.
Get the best from the best
Take the time to realign everybody’s roles and responsibilities with the company’s goals. Everybody needs to understand what they have to do and why they are doing it. This will turn out to be a giant productivity improvement by getting everybody on the same page, and being able to clearly see how everybody’s job fits into the strategic plan for the company. It will help eliminate unnecessary work that is not important to achieving their goals.
It’s also time to put more discipline into managing the performance of people. This means setting realistic expectations, working with employees to meet them, and rigorously assessing their performance. This will bring the best forward as they rise to the challenge and will weed out those that are not been performing.
Just as in most start-up companies, you need all “A” players, because everyone has to be an outstanding performer to get you through the tough times.
Look to the future
In a way, this is all getting you repositioned for the good times. You business will come out of the downturn being stronger, more focused, more productive and with excellent people. Take the time also to look at new business areas you might attack when you are ready to spend some of your cash reserve.
Do the market research that will lead you to new opportunities. You are looking for the next great deal in which to invest your hard earned cash. You may find an acquisition or new partner that you never expected. Your new found strength may be just what they need at a price that is very attractive to you.
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Successful VC’s “Stay Fresh”
Bill Warner Thursday, January 28, 2010
I just read an amazingly refreshing perspective by Greg Gretsch in PE HUB. It’s all about what it takes to be a successful VC. It is counter-intuitive, but makes a lot of sense.
A Fresh View of a Successful VC
With only ten years as a venture capitalist, with some very successful investments and lucrative exits, Gretsch is worried about becoming stale and out of date. Heck, most VC’s with his record of success would be riding high, living the good life, and pontificating to the venture community about his formula for success.
But no! Gretsch doesn’t think that the longer you’re a VC, the more skilled you become in picking winners. Instead, he theorizes that if you’re a VC for more than 10 years, you’re likely to grow worse at your job over time. And, he has some data that point out that this may very well be true. Even with spotty verification, Gretsch takes this seriously. Here’s why:
- The older a VC becomes, the further out of touch with new technologies they become
- As they move up the professional pyramid, their network actually shrinks because they are working with fewer and fewer people
- They are not meeting the new people that are really bringing innovation to the market; as a result they miss trend setting ideas
- They are stuck in looking at existing market sectors for new opportunities, missing new and significant market changes
- Family demands increase as they get married and have children
How Do VC’s “Freshen Up?”
Gretsch’s simple advice is to “remain humble, keep your attitude in check, and stay hungry.” The hard part is to remember how that all feels. Here’s his formual, which might apply to many of us in lots of different lines of work:
- Increase the number of relevant technologies with which you are familiar
- Follow the leading industry analysts to learn what they are thinking
- Build relationships with the next-generation of successful investors and technologists
- Reach out to the younger entrepreneur and learn from their fresh ideas
- Always be better at what you do
I think Gretsch really believes this and will remain on top in the VC community for another decade.
