Unless they're independently wealthy, virtually every entrepreneur reaches a point where they need money to take their venture to the next level. "Seed Money" is generally sought from angels, friends of the founders or individual investors, is usually in the 10's of thousands to 100's of thousands and is used for anything from market research to product development. There's definitely a "right" way and a "wrong" way to approach angel investors.
Tips to remember when seeking Seed Money:
Do you have more tips to add to this list or interesting stories to share? We would like to hear from you.
I recently attended a great breakout session at SXSW Interactive in Austin. The Topic was “Early, Cheap and Often: Failure as a Key to Success”. The panel consisted of three entrepreneurs who had all been involved in businesses that failed with their original visions. The entrepreneurs had to close down or pivot into another direction.
It drove home the point that finding that the original vision (a) won’t make money or (b) doesn’t have the market opportunity originally assumed, is not unusual in the entrepreneurial world. Failure is normal. The key is how the entrepreneur reacts to failure. Failure, if handled properly can redirect the entrepreneur to a better opportunity. Here are some key lessons shared by the panel:
Here's a great example of how to fail boldly and publicly with integrity:
Have another example you would like to share?
Mike Breck, SBDC Business Advisor
In case you missed last week’s Spectrum Knowledge Transfer Series events, here’s the recap as seen by Lauren Lorek, founder of Silicon Hills News. Next month, we cover Working with Universities and in subsequent months–Innovation Readiness and Preparing Your Investor Pitch respectively. Stay tuned for future dates and times.
Does anyone remember, back in the day, the anxiety and strain of selecting, applying to and making a good impression in order to get accepted by their college of choice? So many variables and nuances went into that decision and presentation—what programs are offered, what’s the reputation of the school and its graduates, is there a good advisor/student ratio or is it known more as a degree factory? What does the university or college or program look for in its applicants and what makes one candidate better than another? Is there a strong affinity between the school and industry, assisting grads to find viable employment and is there a strong alumni network? All, big items on the checklist, but the nuances of an institution can also make or break a student’s success.
Think now about the entrepreneurial entrant seeking a place of learning, a home base while they concept, pivot and grow to an independent and thriving company. There are a plethora of options in Austin—incubators, accelerators, co-work spaces, individual mentoring programs and more—but, but from the outside looking in, and without a stack of college catalogues or an advisor who knows the ropes, it’s easy to make a mismatch, spending valuable time and money without much to show for it.
On November 14 (that’s this month folks!), the Texas State Small Business Development Center is hosting Incubators, Accelerators and Co-Work Space: Which is Right for You? to help Austin start-ups that are looking for a program (now or in the future) in understanding the strengths and focus of groups working with technology companies. We are joined by representatives from Techstars, Tech Ranch, the Austin Technology Incubator (ATI), Capital Factory, DreamIt Ventures, STAR Park and Emergent Technologies and will highlight the elements and operating procedures that make each program unique.
Click here to learn more and click here to register. I promise, this will be a lot more fun than a visit to the guidance counselor.
With Halloween one week away, the holiday shopping season is just around the corner. For some businesses, small and large, the next three months can make or break their year. One of our nationally affiliated SBDC sponsors—Rhonda Abrams, Chief Entrepreneur at the Planning Shop, best-selling business author and nationally syndicated business columnist—recently published a 22-page Holiday Success Guide. Even better, she’s made it available to business owners and leaders as a free download on the web. Inside the planning guide, you’ll find marketing tips and strategies, including 99 ways to attract more customers, social media game plans, a handy organizing calendar, holiday money managing tips and more.
Congrats to Chris and Jen Forgey and the entire crew at Light Bohrd on their major win at last weekâs Under Armour Future Show! Here is the video from USA Today:
A major key to success for small business owners after launch is “staying power.” In order to stay viable many paths exist to “add value”and learning your business by the numbers is one of the most important tools required for smart growth. Profit Mastery is a program designed for entrepreneurs who want to de-mystify the books so it can be used as a tool for increasing profitability and managing cash flow. Created by long time banker, Steven LeFever, who has made it his mission to create and retain jobs in small business America. He enlightens owners about how to read the books and use as a management tool while keeping it simple. I encourage you to join me for a journey to increase your confidence in using your finances.
Classes are 4 hours each on: July 30, August 1 and the following week on Aug. 6. and Aug. 8 at the Greater San Marcos Partnership. Don’t settle on being handicapped with regards to your growth by not understanding your finances. This is not an academic course rather a course for entrepreneurs who need the practical!
I was speaking to a would-be-entrepreneur recently discussing what it takes to actually pull the trigger on a new idea, project or business. She shared with me a TED Talk that touched very nicely on that topic and I, in turn, want to share it and one other by the same speaker with you. Brené Brown is a sociologist at the University of Houston, and would be stand-up comedienne, who researches, and I quote, “messy topics.” These TED Talks touch on the mess that is the heart of innovation, creativity and change. I hope you find them as compelling and inspirational as I did.
Click here to view Brené Brown, The Power of Vulnerability, filmed June 2010
Click here to view Brené Brown, Listening to Shame, filmed March 2012
WOULDN’T IT BE COOL . . .
.. . if your skateboard lit up when you were riding?” It was just a fun question Chris Forgey asked his son Mason, an up-and-coming, junior competitive skateboarder, one evening in 2010. A question that launched a sports-equipment manufacturing firm poised to change the look of an entire industry. Using motion-activated lighting technology, Chris spent the better part of the next two years designing his line of patent-pending, illuminated skateboards, longboards and safety helmet designs, refining the production processes and securing first mass market retail sales.
With growing industry buzz and interest among sports manufacturing heavy weights, Chris and his wife Jen, the company’s chief sales and logistics officer, sought assistance from the Texas State SBDC to scale their manufacturing operations and expand into new global markets.
GO BIG OR GO HOME
The first order of business for Chris and SBDC advisor Peg Richmond was to refine the business and marketing pitch for an investor / lender audience. Once that was done, Peg pitched the company to various lenders and arranged meetings between Chris and two interested institutions. Peg also facilitated meetings between the Forgeys and three key parties—export specialist Larry Tabash of the U.S. Commercial Service, a local business writer and a local factoring company—in order to accelerate the hunt for foreign distributors, gain press coverage as an up-and-coming start-up and to help stretch funding during manufacturing ramp-up, respectively. Peg also located and amended a draft distributor agreement for terms discussion and legal review by the Forgeys’ attorney.
Chris devoted part of the half-million dollar total funds raised, which includes the couple’s life savings, to create a skate industry market-launch advertising campaign, to secure additional manufacturing equipment, and as working capital. He also continues to innovate and produce additional product prototypes. In fact, he purchased a new snowboard press with the intention of entering the snow sports market ahead of the Christmas 2012-2013 retail buying season and the major industry buying show that leads the 2013-2014 retail-selling season. He’s also developed an urban commuter (longboard) that features integrated head lights and tail lights. The next product target is a pair of skis that will be unveiled at a tradeshow in late January 2013.
On the verge of signing the first distribution agreement in Europe and the UK, Chris is also seeking licensing opportunities for his technology, is in serious talks about creating branded products for other companies and celebrity endorsers and is preparing for a second round of investor funding.