01 Jun Experts share advice for Wisconsin entrepreneur programs
MILWAUKEE – Some of the people who helped North Carolina and Los Angeles become havens for entrepreneurs and host to surprisingly public communities of angel investors shared their most effective practices Tuesday at the Entrepreneurs’ Conference in Milwaukee.
Their techniques included educational programs—but you have to be careful with that word, said Monica Doss, president of the Council for Entrepreneurial Development, based in North Carolina’s Research Triangle Park. Entrepreneurs and investors alike may think they know all they need to and are beyond basic educational programs.
Instead, she called what CED does “building know-how.” The center eventually tries to give entrepreneurs the knowledge they need, but it must draw them in by offering something they want.
Mentoring New Businesses
One thing entrepreneurs look for, Doss said, is practical advice on breaking into certain markets or approaching investment groups. And through programs targeted at those desires, the center can teach people about business plans and the foundational skills they need for their businesses.
CED’s approach involves hands-on mentoring from experienced entrepreneurs, said Adam Smith, the center’s entrepreneurial programs director. The center provides a series of workshops, conferences, and ad-hoc training programs, which are aimed at linking budding entrepreneurs with experienced mentors and their networks.
“Those canned business-plan CDs that ask you questions and you answer them … they’re pretty worthless,” said Alan Oelschlaeger of business guidance firm Telaric Alliance. “Just a bunch of facts and data.”
A more effective approach is to tell a story, he said. That story, if compelling, can obtain money from venture or angel investors more readily than the basic facts and figures placed in a template.
A mentor could help.
Showing it All
To vet business plans before they have to weather actual investors’ critiques, CED runs a program it calls Streak, which provides entrepreneurs with critiques as they develop proposals.
“Starting a new business is like streaking,” Smith explained. “Everybody sees everything you have.”
Entrepreneurs are not the only group CED encouraged to show themselves. Angel investors, who often take on mentorship roles as well as funding companies, were reclusive in North Carolina before CED had its way with them, Doss said. Perhaps it was because they were afraid their phones would ring all night long if people knew they had money to invest. But when CED publications wanted to start featuring angel investors in stories about the companies they had helped, Doss said, they were willing.
The resulting publicity created a community of angel investors that mirrors the entrepreneurial community, she said, and which has banded together to form small syndicates. Thus safety in numbers, rather than secrecy, protects investors from odd-hours calls.
Entrepreneurial Culture
When CED launched in 1984, the Raleigh Chamber of Commerce was uninterested, Doss said. The chamber wanted to bring in established companies, mostly ignoring the upstart effort to bring an entrepreneurial culture to the Research Triangle. Now, the people who made that decision may wonder why: in North Carolina, entrepreneurs have become mainstream.
But the entrepreneurial culture does not spring to life in the same way everywhere.
Victor W. Hwang, president of the Larta Institute in Los Angeles, flew out to the conference to share his experiences bringing entrepreneurial efforts to market. Even though Larta is a non-profit organization, it refers to the companies it helps as clients. Those clients include thousands of businesspeople each year—only a fraction of the immense business community in California, the one state in the union that can claim to be an economic power on its own.
“You can drive from Santa Barbara down to San Diego without ever leaving civilization,” Hwang said.
Larta was chartered in 1993 in response to a fiscal crisis—which California seems to have once a decade, Hwang joked. The institute is now involved in capital raising and education, with Larta University teaching a mini-MBA course.
Hwang said people who want to develop technical enterprises who don’t have much business experience need that education. Otherwise, they will fall in with the chaff of ill-planned businesses.
“In Southern California, there’s probably not a month that goes by without someone trying to start their own tech organization,” he said.
Larta, too, helps its clients network, but sometimes with difficulty. Ego and the desire to have a personal niche can get in the way of people working together. Hwang said the holistic approach CED takes in North Carolina impresses him. “It’s very special,” he said. “That doesn’t happen in Southern California, I assure you.”
And Larta does not deal only with California groups. Los Angeles being a major port and a hub of international activity, conferences there can attract consul-generals from countries ranging from Japan to Switzerland, Hwang said. The region no longer has a definite ethnic majority, making it at once a place ideally suited for international networking and full of different ways of doing business.
Measuring success in an entrepreneurial environment is not always easy. Hwang said Larta looks at the amount of venture capital raised and tries to track the companies it helps, but the typical startup’s need for immediate returns and short-term advice can get in the way of doing that over the long term.
“The hardest part is, companies come to us and they don’t even know where to start … we’ve become a really good map and, I guess, tour guide for companies,” he said.
When Larta started out, it did not charge any fees for its referral services, which connect entrepreneurs with potential funding and other services. But that changed, Hwang said, because nobody remembered the referrals for long and gratitude soon faded.
“When you take a fee, people remember you, and they give you credit for it,” he said.
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Jason Stitt is a staff writer for the Wisconsin Technology Network and can be reached at jason@wistechnology.com.