June 29, 2009
The business community united to show their support of entrepreneurism last week in anticipation of the announcement of the first annual Utah Angel Investor of the Year. After narrowing the field to the 3 finalists of Scott Frazier, Nobu Mutaguchi, and Alan Hall; the capacity crowd applauded as Scott Frazier was named the 2009 Angel Investor of the Year.
As Frazier accepted his award, it was easy to see why he has been so successful in his business career. He quickly shifted the attention from himself and pointed out several colleagues who have also made significant contributions to the entrepreneurial community here in Utah. Frazier said, “If they were giving this award out for being good at specific aspects of investing, there are many others who are more qualified than me.”
Along with the Investor of the Year Award, we thought it was fitting to recognize an individual who may not be making significant monetary contributions to entrepreneurs, but provides significant guidance and education to help them fulfill their dreams. Though many were qualified to win this award, Greg Warnock stood out for his years of mentorship through Junto, Mercato Partners and other worthwhile endeavors.
It was incredible to see the business community come together to recognize these individuals and support the entrepreneurial spirit here in Utah. While we were expecting anywhere from 150-200, we were pleased to see almost 300 in attendance and packing the room to the limit. Next year we will definitely have to find a bigger venue to host the luncheon.
June 26, 2009
Through the recently announced American Recovery & Reinvestment Act of 2009, the SBA has just announced changes to the standard SBA 504 loan program that will allow businesses to refinance high-interest-rate debt. Here are the details:
Debt Refinancing: Legislation allows 504 program projects to include a limited amount of debt refinancing if there is a business expansion and the debt refinanced does not exceed 50 percent of the projected cost of the expansion. “Expansion” includes any project that involves the acquisition, construction or improvement of land, building or equipment for use by the small business. The following are some of the conditions under which borrowers will be eligible for refinancing:
• The debt being refinanced was incurred to acquire land, to construct a building or to purchase equipment. The assets acquired must be eligible for financing under the 504 program.
• The existing debt is collateralized by fixed assets.
• The existing debt was incurred for the benefit of the small business.
• The new financing provides a substantial benefit to the borrower when prepayment penalties, financing fees, and other financing costs are taken into account.
• The borrower has been current on all payments of existing debt for one year prior to the date of refinancing.
June 18, 2009
FundingUniverse is the host and sponsor of the first annual Angel Investor of the Year award here in Utah. This has been a great program to recognize those individuals that are investing in tomorrow’s successful companies. We’ve had many nominees and, today, have announced the 15 finalists. Here is the list:
- Alan Hall
- Craig Earnshaw
- David Carter
- Gary Williams
- Hal Widlansky
- JD Gardner
- John Richards
- Kent Thomas
- Kyle Love
- Mark Madsen
- Martin Frey
- Nobu Mutaguchi
- Robert Kunz
- Scott Frazier
- Warren Osborn
If you are in Utah, the event is next Tuesday!
- Tuesday June 23rd
- 11:30 am to 1:30 pm
- Hilton Alpine Room, 255 S. West Temple, SLC, UT
- $25/seat, $200/table (includes lunch)
- www.investoroftheyear.org
May 22, 2009
I just received an email from the SBA Director in Utah that announced the new “ARC” loan program for small businesses.
Beginning on June 15, SBA will start guaranteeing America’s Recovery Capital (ARC) loans. ARC loans are deferred-payment loans of up to $35,000 available to established, viable, for-profit small businesses that need short-term help to make their principal and interest payments on existing qualifying debt. This is an incredible program … ARC loans are interest-free to the borrower, 100 percent guaranteed by the SBA, and have no SBA fees associated with them.
According to the SBA:
“These ARC loans can provide the critical capital and support many small businesses need to make it through these tough economic times,” said SBA Administrator Karen Mills. “Together with other provisions of the Recovery Act, ARC loans will free up capital and put more money in the hands of small business owners when they need it the most. This will help viable small businesses continue to grow and thrive and create new jobs in communities across the country.”
I agree… it’s a good start.
As with all SBA loans, ARC loans will be made by commercial lenders, not SBA directly. For more information on ARC loans, visit http://www.sbaarcloans.org.
May 19, 2009
Each month, FundingUniverse hosts an Online Speedpitch Event in which it showcases 4-6 entrepreneurs and their companies in front of 10-20 accredited angel investors and venture capitalists. The event has turned out to be a huge success. Investors can get a close look at 4-6 deals in under an hour and entrepreneurs are able to develop meaningful relationships with several qualified investors.
The format of the event is similar to our live Speedpitch Event. Pitches are done live over the web in an online webinar format. Entrepreneurs go through their concise PowerPoint presentation for four minutes after which the time is opened up to the investors to ask questions for three minutes. Once this question and answer period is over the investors are surveyed and asked to express their level of interest in the deal and we move on to the next presenter. At the end of the event, the results of the surveys are compiled and delivered to the entrepreneurs to help them follow up with each interested investor to pursue further conversation.
The entire event lasts about 45 minutes-1 hour depending on the number of entrepreneurs selected to present. Thanks to the quality of the investors who attend these events and the devotion of the entrepreneurs to improve their pitches, each of our participants has been able to generate the interest of investors through this event.
In our most recent Online Speedpitch Event, FundingUniverse showcased the following companies:
At the end of the event, each presenter had interested investors to follow up with. In fact, one presenter pitched well enough that he got two term sheets in less than a week after the event while another was able to develop a strategic partnership with an investor!
FundingUniverse’s Online Speedpitch Events are held each month. To be considered to pitch to our investors, please send an email to mangumz at fundinguniverse.com with your executive summary attached.
UPDATE: we just received word that an investor from the last Online Speedpitch Event flew in from across the country to meet with one of the entrepreneurs this week to discuss funding their deal!
May 15, 2009
While I’m getting to it a little bit late, I thought that it would be provide a report on the first annual invite-only Utah Angel Group Summit that FundingUniverse hosted with each of Utah’s Angel Groups (Utah Angels, Olympus Angels, Park City Angels, Dixie Angels, Salt Lake Life Science Angels, and others). As the exclusive sponsor, we had a fun time and were glad to receive such great feedback from each of the angel groups. It was a fantastic day with great topics and plenty of networking. Here are a few of the highlights:
- Richard Sudek, Board of Governors for the Tech Coast Angels (largest angel group in the US), was our keynote speaker. He did a great job talking about best practices and the do’s/don’ts they TCA has learned over the years.
- Fortunately, I was able to take 30 minutes to present “The State of Angel Investing in Utah” to the group. We have partnered with students at BYU to gather and analyze 51 angel investments that have been made in Utah over the past 18 months. It was great data and interesting to see various trends, investments sizes, valuations, etc.
- We had a fantastic panel in the morning focused on Investment Best Practices moderated by Greg Warnock (prolific angel and VC).
- In the afternoon, Hal Widlansky led a panel to talk about the current climate and Structuring Deals in 2009.
Can’t wait to start sharing some of the content that we have gathered during research project — stay tuned for that! Here are a few picture highlights:
Richard Sudek
Group Shot
April 21, 2009
Are you guys a scam?
You’d laugh if you knew how often we receive email asking us that. It’s OK. We understand. There’s more than a few shady characters in our industry and it’s alright to be cautious. There’s a lot of services out there like ours, designed to match entrepreneurs to funding, which just don’t deliver anything of value. So the question, “Are you guys a scam?” is not a stupid question, I just wonder how much you can trust the inevitable response of “no.”
Clearly, anyone who’d steal your money would have no qualms lying to you. But if asking someone directly isn’t a good idea, how do you find out if someone’s a good guy? Well, here’s a few ideas:
1. Use Google
Google is a great place to start. Just do a search for the person’s name or company’s name and see what comes up. Do a search on a contact’s address or phone number as well in case the name they gave you is an alias.
It’s also important that you consider all the information you find. Critics can spin things just as much as anyone else so weigh comments, good and bad, carefully.
2. Check Out Social Profiles
Look at
LinkedIn,
Facebook,
Twitter and even
MySpace for profiles of the company principals or the organization itself. Find out if the company or individual has a blog and review the blog’s content. Look at how long they’ve been online and what they talk about. Also consider how much content is available. Legitimacy lends itself well to transparency.
3. Verify Credentials
In this world of online media, it’s easy to get some kind of mention in famous publications. It’s also easy to secure awards or certifications. Investigate those credentials. If they have a Better Business Bureau logo on their website, review the BBB profile. If they refer to an award given by a group you’ve never heard of, find out more about that group.
FundingUniverse rocks the Wall Street Journal logo on our front page not just because of a perfunctory mention, but because the article talked pretty extensively about our services and feaured quotes from an interview they had with our CEO. Those are media mentions you can bank on.
4. Don’t Pay Up-front for Vague Deliverables
A common maneuver by less-than-savory characters is to promise great results without talking about the process. If all you have is a promise, don’t pay. Expect them to give you a plan to get you to the promise and be sure it makes sense to you.
5. Get Referrals
Be sure to ask for referrals from satisfied customers. And don’t just be satisfied with names, get specifics. How much did they help them raise? What was their market vertical? How long did it take? Etc. If they can’t give you any, that’s a problem.
6. Review Agreements Carefully
Don’t sign things you don’t understand. If you need to have a lawyer review a contract, do it. Ensure you know exactly what both parties are being obligated to do to avoid misunderstandings in the future.
7. Trust Your Gut and Common Sense
The most important thing is to trust your instincts. If it doesn’t feel right, don’t do it. Usually when an entrepreneur tells me how they got taken for a ride by someone who promised to help them raise money, they mention that it didn’t feel right but they took the gamble. Don’t gamble.
Remember common sense too. If you’re dealing with someone who says they’re a highly prominent organization in the capital community and their email ends with “@yahoo.com”, something doesn’t add up. If their website looks like it was put together in the early nineties, be weary. Details matter.
There’s not a huge risk for being scammed when you’re looking for help raising money, but there is some. Just follow these suggestions and you’ll be fine.
February 17, 2009
How much are you willing to risk to make your company a success?
Investors call it “skin in the game”, others call it gambling, I call it rite of passage. Risk is an inevitable part of entrepreneurship. You risk your money, time and ego whenever you sign your name as founder. You needn’t risk unnecessarily, but at some point or another, you’ll need to step out and take a leap of faith that your ideas, assumptions, abilities and team are enough to pull you through.
Every opportunity is accompanied by a certain amount of risk. Investing money into a marketing campaign means you might lose it all. Hiring a new employee means you might hire a lemon. Making a sales call means you might get told no.
But what if you never took any of those risks? . . . Could you even stay in business?
So risk it. Step out. Risk getting laughed at. Risk losing money. Risk that prospect rejecting your offer. No matter what happens, you’ll be glad you did.
January 20, 2009
Trivia question for you. Is the car on the left a Honda, Toyota, Subaru, Suzuki, Chevy, Ford or VW? Answer, it’s none of those, it’s a Scion. Don’t feel bad if you didn’t get the right answer either, like you, almost every new car looks the same to me too.
This weekend I had the opportunity to attend the 2009 Utah International Auto Expo and boy was I disappointed. With the exception of the hood ornament, just about every car looked like the other. Seriously, how many shades of silver can an industry turn out?
When the Detroit automakers went to congress with their hat in hand, I for one was not surprised. Did you know that the Big 3 average less than $2,000 profit per vehicle? That represents less than a 5% margin and I don’t know a lot of companies that can operate long-term on those kinds of margins. Bloated overhead, a history of producing inferior products and (for me) a lack of imagination are obvious warning signs that the Big 3 have been running over and over for the last 25 years. Is all lost for Detroit? I don’t think so, but a return to earlier roots would certainly be appropriate.
The best part of this years car show was the “classic car corral.” Mustangs, Corvettes, GTO’s and other trophies from Detroit’s glory years were on display. Looking at these “classics” I found myself wondering what happened to those innovative car designers and what their thoughts would be on the this years Ford Fiesta? How these brilliant minds became replaced by todays cookie cutter designers is a mystery to me that I doubt I will ever understand.
The problem with Detroit and other established businesses is that you can’t fool the public for long. New Flash: When you belong to a company that prides itself on mediocrity, it shows! It shows in the design, the packaging and the imagination (or lack thereof.) We “know” when you don’t care. Don’t believe me? Take a seat at your local DMV for a heaping bowl of stale mediocrity. Yeah, the DMV really has your best intentions at heart…Now serving number two-four-nine at station twelve…”
The best of the best are always looking for ways to define and then re-design themselves. Nike, Apple, Coke and McDonalds spend millions of dollars each year refining, designing and expanding their brand. If you don’t have millions of dollars to spend, try spending just a few minutes of time imagining the possibilities and then make it happen. At Funding Universe we challenge you to dream, to scheme and to use your imagination to grow and innovate. For those of you who find that task too daunting, may I suggest taking a test ride in a 2009 Chevy Cobalt. For guys like you, it comes in 17 shades of silver.
Joel Nielsen is a Venture Consultant at Funding Universe. He can be reached at jnielsen@fundinguniverse.com
January 13, 2009
To be successful you MUST share the misery! Yes, you heard it here folks we strongly believe in handing your problems off to everyone else. Isn’t this the kind of advice that you have been waiting to hear? Well it’s kinda true actually.
If you have ever worked as a small business owner you are very familiar with the fact that work never starts at 8 and ends at 5. Owning a small business is a 24 hour comittment which means that we NEVER stop thinking about it. Over time, this constant focus on profitability and success can take an ugly toll.
The other trait that many small business owners have is a reluctance to lean on outside help. Afterall, your business becomes like a member of your family and who in their right mind would leave their own baby with a complete stranger?!? Unfortunately, this kind of thinking is flawed and can lead to burnout, frustration and office rage (for example, it’s a really bad idea to whack your computer monitor. See here for more on that!)
As a Type A personality myself, I often had a “go it alone” mentality that served me well, until graduate school. It was in my MBA program that I finally had to come to grips with the fact that there weren’t enough hours in the day to micromanage every one and every thing. It was a hard habit to break but in the end I learned that there are a lot of talented people who can produce phenominal results if you trust them and more importantly empower them to do it “their” way.
Brock Blake, the CEO of Funding Universe learned this lesson at a much earlier age than I did. Early this month he sat everyone down and challenged us to elimate costs and improve profitability. In a matter of hours thousands of dollars were eliminated from our overhead. New ideas and strategies were put into place and a feeling of ownership was felt up and down the hallways of our office. Funding Universe is “my” company. No good idea is ever turned down and often, good ideas are tweaked into GREAT ideas.
Again, this leadership style comes with a severe warning. If you give power to your employees to solve problems, you must do it with the full faith and confidence that they will come through for you. If you give power and then pull it out from underneath them you will damage credibility forever. Trust but verify, guide but empower. If you view each of your employees as problem solvers versus problem causers you will find small business ownership a constant delight!
Joel Nielsen is the Director of Debt Services for Funding Universe. He can be reached at jnielsen@fundinguniverse.com
