Another entrepreneur interview

Posted on June 29, 2009

After the interview with Don Daszkowski, the About.com Guide to Franchises I now had the chance to interview Andrew Markou, an entrepreneur that also deals with selling, buying or starting a business. Here is what I found out:

Cristian:  Andrew, welcome on Entrepreneurship interviews. You are running an online publishing business, what is it?

Andrew: We run a number of websites in the entrepreneur space and have been doing so since 1996. We like to think that the whole business is greater than the sum of each website as we are able to cross-refer pertinent and engaged traffic between them.

Find out the rest over the Entrepreneurship Interviews blog.

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Good article on investor pitching

Posted on June 9, 2009

Truth to be said I’m not an expert on investor pitching. I’m all pro self funding, but yes sometime you need some outside cash, especially if the business you are planning to start requires larger funds.

Scott Gerber from Entrepreneur.com had an interesting article on Investor pitching -which I enjoyed because is not the regular theoretical article that say more or less the same thing and then leaves you unprepared. The article starts by describing a pitch failure: how they tried to get $15 million without selling a single product and they failed.

And, as I learned on my own, if everything goes right, you learn little. When it goes bad, your mind records everything and turns it into a source of knowledge.

The article talks about 6 essential steps in pitching an investor. As usual I will add my comments:

  • An elevator pitch is vital. Well, I’m watching from time to time a TV show where people come to pitch a group of investors. I would say about 90% of the pitches fail because the entrepreneur fails to explain shortly what is his business about, why it does need the money, and how it will make money for the investors. You know what they are doing? They come with a 30 pages Powerpoint, which they realize it’s too big and filled with un-important stuff the moment they open it. You can see that from the way they are turning slides, going fast over some.
  • Inspire confidence with facts, not fiction. What Scott is saying is that when you pitch someone for money you should first show that you sold your first product, cashed some money in and generally everything works. I remember I’ve been pitched once to invest some money in a product and the pitch went and said: “nobody did this product before. That’s why we are sure it’s going to be successful when we will start selling.” I didn’t not invest.
  • Have a grasp of reality. Meaning that the income projections should  be realistic. I’m amazed on how entrepreneurs usually make their pitches: if we just get 2% market share, then we will be reach and all go home with $100 million. If you remember that each entrepreneur pitches these investors with the same projections and way of estimating revenues you will realize how throwing some sense and reality in your projections could actually help win the pitch.
  • Prove that you are a fiscally responsible manager. Spend like your spending from your own pocket – nobody wants to overspend, especially in these times of crisis. The investors will want to know how they money are spent, and for sure they aren’t going to buy you a Porsche.
  • Demonstrate that your business can crawl before you say it can walk. A proven business record, and wish to invest in one product line it’s always better than expanding out of control. Usually you first want to see it works, and if it does, it’s not a problem to expand.
  • Choose not to be the smartest person in the room. If you feel like you know everything and the investors are a clueless source of money, then you are wrong. They might now know the business in-depth or might not fully understand the very technological aspects of a business. But remember something: they have a feeling of what could fly and what it doesn’t. In fact this is what put them into the position to be pitched – they have a good sense of good businesses and sometimes that’s all it takes.

Well, Scott said everything better than I could ever say it in the original article.

I would add some ideas of my own:

  • Never pitch for to little money. If you only need a small amount, maybe you shouldn’t pitch investors but banks. Simply put, investors don’t look for businesses that will bring them $50k in the next 3 years. It doesn’t worth their time (of course, unless the investor is your mom)
  • Speak with someone that did a pitching before. The insights you could get from an entrepreneur that have pitched before, successful or un-successful will teach you what to expect, what to say and what to avoid. It’s far better than reading any book.
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NOW IS THE BEST TIME FOR YOUNG PROFESSIONALS TO START THEIR OWN BUSINESS

Posted on June 7, 2009

Entrepreneur Robert Tuchman Guides Readers Who Are Young, Bold and Ready or Forced to Break Free From the Pack and Pursue Their Passions

NEW YORK, New York, June 2009 – “There’s no time like the present” may be a cliché, but clichés exist for a reason. As decades-old corporate warhorses continue to go belly-up, even the most tried and true “safe” career paths—say, the Bear Stearns trainee program or climbing the General Motors management ladder—are no longer guaranteed. The landscape is now perfect for young, resilient workers to quit waiting around for an economic recovery and recruiters to come knocking and instead direct their ambitions into their own ventures.

In Young Guns: The Fearless Entrepreneur’s Guide to Chasing Your Dreams and Breaking Out on Your Own
(AMACOM; May 1, 2009; $21.95 Hardcover), Robert Tuchman shows young professionals how to start and succeed in their own business, giving examples of many entrepreneurs under the age of 35, from mortgage giants to PR moguls, who thrived in the face of adversity. There is no better time to take a chance than when you’re youthful, bold and have very little to lose—and he knows from experience.

“A seismic shift is happening in the economy, with the tone moving toward an entrepreneurial world,” says Tuchman, who started his own company in the economic downturn in the mid-1990’s. “New forms of life are springing up, making possible ventures that seemed impossible just a short time ago.”

When Tuchman graduated from college in 1993, he entered the stockbroker trainee program at Lehman Brothers but quickly realized his professional path in the rat race would leave him unfulfilled. Armed with one phone, a fax machine and his tiny, one-bedroom apartment, at the age of 25 he funneled his passion for sports and business into his own company, Tuchman Sports Enterprises (TSE). Within two years, TSE was named to the annual Inc. 500 list of America’s fastest growing privately held companies and as one of the top 100 promotion agencies by Promo Magazine.  TSE, which was started with no money and no investors, sold for millions of dollars to Premiere Global Sports in 2006. Last year, TSE (now known as Premiere Corporate Events) earned more than $70 million dollars in sales.

“I can’t tell you how many people warned me against veering off the safe route at Lehman,” says Tuchman. “But I knew I had the drive and resiliency to make something else happen for myself instead of spending years being apathetic in my job, never knowing if I’d make it to the top. And given what ended up happening to Lehman and other corporations, playing it “safe” might have left me unemployed, broke, and in a career that I hated.”

In Young Guns, Tuchman shares practical strategies for not only getting a business only up and running but also ensuring its staying power:

“This is the moment to turn your passion into something tangible,” says Tuchman. “You’re in control of setting the rules for your life’s agenda. If you feel the drive in your gut, got for it now.”

About the Author:

Robert Tuchman is the Founder of TSE Sports & Entertainment, a company he started out of his one-bedroom apartment in Manhattan at the age of 25. TSE has gone on to appear on Inc. 500’s list of America’s Fastest Growing Privately Owned Companies. Tuchman now serves as President of Premiere Corporate Events, a division of Premiere Global Sports. A frequent guest on “Your World with Neil Cavuto,” he has also appeared on CNN, the “CBS Morning News,” BET, and has been the subject of features in USA Today, The New York Times, The Wall Street Journal, and Entrepreneur. He lives in New York City.

Tuchman’s Tips for Young Entrepreneurs

The Small Business Administration’s latest statistics show that a new startup has about a 50 per cent chance of surviving for five years or more. Robert Tuchman’s advises entrepreneurs to start doing the following early on to ensure a company’s longevity:

1.      Do business from home. Save money on renting office space by doing business out of your own living space. Install a separate phone line or purchase a cell phone for business use only. Print your own letterhead and business cards. Your clients will never suspect that “Suite 12-B” is really “Apartment 12-B.”

2.      Try to fund it yourself, or mostly yourself. It pays to go after the least amount of funding that is necessary. When you’re starting out, it feels good to say that some venture-capital firm invested millions of dollars in your idea. But a few years down the road, when you’re doing well, it will not feel so great to know that you own only 25 percent of your company.

3.      Put a positive spin on things. Does the timing of your entrepreneurial project coincide with you having been recently laid off? Don’t include that in your pitch to customers or investors. Nobody wants to think they’re doing business with someone who’s only there because they have to be.

4.      Build a culture of action and enthusiasm. During your first year, you will face a lot of questions about your experience. The best—and probably only—way to overcome them is to impress clients with your vigor and dynamism. If you want to be perceived as youthful, forward-thinking, and results-oriented, be proactive! Reward your people for taking the initiative. You’ll have a huge competitive advantage over established companies. Many clients will pay, and even take a bit of a risk, to get young, energetic minds on their side.

5.      Stay balanced. During the first year, and all the years thereafter, you will have to find a way to achieve balance. Basically, this means avoiding the temptation to work eighteen hours a day, seven days a week, without a break. Find an outlet—a hobby, an amateur sport, or an exercise activity—that gets your mind off work and relieves stress. It’s essential to maintaining perspective and the energy you need to keep your business thriving.

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Social Entrepreneur’s Cup Finalists Announced

Posted on June 5, 2009

Social Venture Partners is proud to announce the four finalists for its Social Entrepreneur’s Cup awards. The Social Entrepreneur’s Cup is a competition to find Minnesota’s most innovative and effective social entrepreneurs. The four finalists compete for recognition and cash awards as part of the Engaged Philanthropy Conference that takes place on Thursday, June 18 at the Graves 601 Hotel in Minneapolis. The Social Entrepreneur’s Cup was created to seek out, celebrate, and promote Minnesota’s most innovative and effective social entrepreneurs and the non-profit organizations they lead.

Bill Drayton, the founder of the Ashoka Foundation and a leading social entrepreneur himself, describes a social entrepreneur this way: “Social entrepreneurs are individuals with innovative solutions to society’s most pressing social problems. They are ambitious and persistent, tackling major social issues and offering new ideas for wide-scale change. Rather than leaving societal needs to the government or business sectors, social entrepreneurs find what is not working and solve the problem by changing the system, spreading the solution, and persuading entire societies to take new leaps. Over the past two decades, the citizen sector has discovered what the business sector learned long ago: There is nothing as powerful as a new idea in the hands of a first-class entrepreneur.”

Each of the finalists will make live presentations before the judges and conference attendees vying for cash grants and consulting assistance from Social Venture Partners. The winner of the competition will receive $20,000 as a general operating grant and 40 hours of consulting services from the experienced entrepreneurs and managers who make up Social Venture Partners. The second place winner wins $5,000 and 20 hours of consulting services from Social Venture Partners. The other competitors will receive a $1,500 honorable mention award. Sandra Vargas, the president of the Minneapolis Foundation, presents the winners their awards at the concluding ceremony and reception.

Judges for the competition are: Kate Barr, Executive Director, Non-Profits Assistance Fund; Terry Barrerio, Executive Director, University of St. Johns Entrepreneurship Center; Trista Harris, Executive Director of the Headwaters Foundation for Justice; Sean Kershaw, President of the Citizens League; Melissa Stone, Director, Public and Nonprofit Leadership Center, Hubert H. Humphrey Institute; Greg Tehven, co-director of Students Today Leaders Forever and the 2008 Social Entrepreneur’s Cup winner; and Jeff Tollefson, former venture capitalist and current Executive Director of Genesys Works.

The Social Entrepreneur’s Cup finalists represent the spectrum of social needs including education, health, homelessness, and sustainable energy. Each of the finalists has a fascinating story of innovation and hope to tell. The four finalists are:

Admission Possible

A college education remains the best pathway out of poverty and into a middle-class life. Admission Possible helps promising low-income students enter college by providing ACT and SAT test preparation services and admissions and financial aid consulting. Each year, approximately 200,000 low-income students in the United States graduate from high school prepared for college, but don’t go. At no cost to students Admission Possible provides four critical services to help them prepare for admission to college: 1) ACT/SAT preparation; 2) college applications preparation; 3) Financial aid assistance; and 4) Guidance in the transition to college. Since 2000, 99% of Admission Possible students have earned admission to college, and nearly 80% are continuing to work toward their degree or have already graduated.

Admission Possible was the first college access program in the country to use AmeriCorps members to “coach” their students. Starting as a 35-student pilot program in 2001, Admission Possible’s program is now in 17 Greater Twin Cities high schools and serves 1,300 students across five school districts. In fall of 2008, Admission Possible expanded its program to high schools in Milwaukee, Wisconsin.

Rural Renewable Energy Alliance

Rural Renewable Energy Alliance (RREAL) installs solar heating systems for low-income families that qualify for public heating assistance. While Heating Assistance is a vital safety net for the lowest income Minnesotans, it isn’t a permanent solution for generational and cyclical fuel poverty. RREAL home solar heating systems saves low-income families money while reducing carbon and other greenhouse gas emissions; localizes energy production; and creates green jobs in impoverished communities in northern Minnesota. The solar heating systems installed by RREAL offset as much heat in one season as a family receives through heating assistance.

RREAL manufactures and sells of one of the most efficient solar air heat collectors on the market. The income from sales of its solar heating systems allows it to subsidize installations of systems in the homes of low-income families. RREAL is working with Community Action Programs to replicate their work across Minnesota.

RREAL’s goal is to install Solar Air Heat in residences, businesses, and industry throughout Minnesota and beyond not only as a solution to fuel prices, but for the reduction of greenhouse gases, keeping energy spending local, the creation of local employment, and energy independence.

Hearth Connection

Homelessness is a social ill that Hearth Connection knows how to solve. Hearth Connection’s network of supportive housing providers houses over 1,300 men, women, and children, 92% of whom now live in their own homes. Homelessness is expensive for taxpayers because the homeless go to hospital emergency rooms, jails, detox facilities, and other expensive services. The Hearth Connection’s outcomes are impressive. Extensive research demonstrates that Hearth Connection use public resources more productively and is breaking the cycle of homelessness.

The Hearth Connection solution to homelessness is to finance, develop and manage a network of supportive housing providers that houses people with long histories of homelessness. They provide support for the homeless and help them get treatment for mental illness, addictions and medical problems.

Homelessness is difficult for government or charities to solve alone because both the problem and the solution are complex. As an intermediary, Hearth Connection brings together faith communities, non-profit social service agencies, housing developers, neighborhoods, philanthropy, hospitals and all levels of government. Hearth Connection’s special contribution is rethinking the problem of homelessness by taking it on systemically.

Apple Tree Dental

The top unmet health care need for low-income Minnesotans is dental care. Annually, an estimated 20,000 visits to emergency departments in Minnesota are for dental infections that could have been prevented. Apple Tree Dental addresses this problem in a whole new way. Apple Tree Dental provides comprehensive dental services for almost 15,000 low-income Minnesotans enrolled in Minnesota Health Care Programs (MHCP) including Medical Assistance and MinnesotaCare.

Recognizing that traditional dental clinics were not reaching people with the greatest needs, Apple Tree created the “Community Collaborative Practice Model” as a three-way partnership among a group dental practice, community organization and an on-site dental care team. The Community Collaborative Practice Model brings care to low-income people where they live or receive other social services and teaches healthy habits while delivering preventive and restorative care. Dentists and dental hygienists work together like doctors and nurse practitioners, with hygienists providing on-site education, assessment and triage services. The Community Collaborative Practice Model extends the reach of the dental workforce by allowing dentists to focus on restorative care while hygienist practitioners provide earlier disease prevention that reduces painful infections and expensive treatment.

About the Conference Host Organization: Social Venture Partners Minnesota (www.svpmn.org)

Social Venture Partners Minnesota is an engaged philanthropy organization that leverages the money and talents of its members to promote philanthropy and improve the lives of ‘at risk’ children and youth in Minnesota. Our members are successful entrepreneurs, corporate executives, and professionals skilled at growing organizations with a heart for making a better world. We are business entrepreneurs working alongside social entrepreneurs to solve social problems.

Social Venture Partners follows the venture capital model of patient, long-term investment combined with hands-on assistance to transform the social entrepreneur’s vision into reality. We invest financial capital, social capital, and intellectual capital in the nonprofit innovators we support. Social Venture Partner members gain satisfaction from giving of their talents, as well as their money, forming personal relationships with the nonprofit staff they work with and the children served by the nonprofit. Through our youth program, SVP Teens, we prepare the next generation of philanthropists.

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SMALL BUSINESS ECONOMIC CONFIDENCE SURGES

Posted on May 3, 2009

Riverwoods, IL, April 27, 2009 – Economic confidence among small business owners rose to its highest level in 14 months in April as more of them see the broader economy and the conditions for their own businesses improving, according to the latest Discover® Small Business WatchSM.  The monthly index increased more than 10 points, rising to 88.5, up from 78.2 in March and the highest since the Watch hit 90.8 in February 2008. April’s mark represents the third consecutive monthly increase in economic confidence among small business owners.

“While we saw confidence rise almost across the board, small business owners who have been open less than two years showed the most enthusiasm for the economy that we’ve seen in that category since June 2007,” said Ryan Scully, director of Discover’s business credit card.  “At the same time, the economic environment is challenging. Most owners still rate the current economy as fair or poor and continue to keep business development spending on hold.”

The number of small business owners who say the economy is getting better nearly doubled to 31 percent, up from 16 percent in March and the highest level in this category in two years.  The number of owners who see the economy getting worse continued to decline.  It dropped to 51 percent in April, down from 69 percent in February 2009.

Yet while the anticipation of improvement is on the rise, 91 percent of small business owners still ranked the current economy as fair or poor, a figure that has been constant for eight months.

April Highlights:

•    32 percent of owners see economic conditions for their businesses improving, up from 24 percent in March; while 40 percent see conditions getting worse, down 7 percent from the previous month; 22 percent say it’s staying the same and 6 percent weren’t sure.
•    58 percent of owners say they have not experienced temporary cash flow issues in the past 90 days that have caused them to hold off on paying some bills.
•    21 percent of owners say they plan to increase spending on business development over the next six months, unchanged from March; 46 percent plan to cut spending and 30 percent will make no changes.

About the Small Business Watch

The Discover Small Business Watch is a monthly index measuring the relative economic confidence of U.S. small business owners who have less than five employees, a segment that consists of 22 million businesses producing more than a trillion dollars in annual receipts. The Watch is based on a national random survey of 750 small business owners. It is commissioned by the Discover Business Card, which strives to offer the best business credit card for American small businesses, and is conducted by Rasmussen Reports, LLC (www.rasmussenreports.com), an independent survey research firm. The numeric index is calculated by assigning values to responses to a set of six consistent questions. The base value of the Watch was established at 100.0 based on surveys conducted in August 2006. In addition to generating the index, the Small Business Watch surveys small business owners every month on key issues, and polls 3,000 consumers four times per year to gauge purchasing behavior and attitudes towards small businesses. For past results and survey data, visit www.discovercard.com/business/watch. For information on Discover Business Card, visit www.discovercard.com/business.

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I'm Cristian Dorobantescu, a part time entrepreneur living in Bucharest, Romania. This blog is about entrepreneurship, start-ups and small businesses.
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