Each year, the Smith School of Business hosts leading and up-and-coming stars in entrepreneurship research from around the globe for a three-day academic research conference. This year celebrated the 11th anniversary of the Smith Entrepreneurship Research Conference, which was held from May 7-9, in Van Munching Hall at the Robert H. Smith School of Business. The invitation only conference is co-chaired by Anil Gupta, the Michael D. Dingman Chair in Strategy and Entrepreneurship at the Smith School, and David Kirsch, Ph.D., Associate Professor of Management and Entrepreneurship at the Smith School.
The goal of the invitation-only event is to gather both junior and non-tenured faculty to present early stage entrepreneurship research to senior, tenured faculty for discussion and feedback — very similar to the way in which entrepreneurs constantly pitch their ideas, hear reactions and pivot. Continue reading →
Financing is a hurdle faced by nearly every entrepreneur and can the need for funding can occur at various stages of a company’s life cycle. It’s important to know what options are available, as well as the risks that come with each.
Some common methods of financing include:
Friends & Family – Many early stage companies raise a “friends & family” round, relying on the networks of the startup’s founders for seed capital.
Crowdfunding – If you are selling a product or service that you think would appeal directly to consumers and you need capital to fund your business, consider crowdfunding as an option. Sites like Kickstarter, Indiegogo , and Gofundme allow you to post your “project” for viewing by thousands of potential funders in exchange for a percentage share of your money raised.
Contests & Grants – A great way to get funds for your start-up without giving up equity is to apply to contests and grants. In this article Forbes offers some tips for those seeking grants. A tip: follow entrepreneurship organizations and centers, accelerators, and VC firms / angel groups on social media for posts about local contests.
Small Business Loans – This option is most effective if you have been in business for a while and are generating some cash flow. For those who meet these requirements, the Small Business Administration offers different types of loans to help you grow your business.
Angel Investors – For early stage companies with an ability to scale quickly and high growth potential, there is the option of raising a round from angel investors. There are many angel investors, both individuals and groups, who invest ~$25B each year in early stage companies. Most angel deals are done with companies who have either successful beta testing or initial revenues. Deals range from straight equity to convertible notes.
Venture Capital Firms – For later stage start-ups with a proven track record of success who are seeking to reach the next level, raising venture capital funds can be the right next step. The total Venture Capital market is ~$45B, invested in a variety of industries and stages. You can check out the VC100 for a look at the top 100 venture capital firms in the U.S. Researching the right firms for your company stage and industry is essential when raising VC funds. Looking at the funding history for similar companies to yours on CrunchBase or AngelList can be a good place to start your research.
It has been three years since Obama’s historic signing of the JOBS Act, which was enacted as a way to help small businesses, the lifeblood of job growth in the U.S., more easily obtain funding by easing securities regulations. Since 2012, the entrepreneurial community has eagerly awaited the SEC’s final guidance on the rules regarding crowdfunding.
It appears that the SEC is close to issuing rules on how the Act will affect equity investments of non-accredited investors in small businesses and startups, particularly through crowdfunding vehicles.
On Friday, May 8, the Smith School’s Center for Financial Policy, Dingman Center for Entrepreneurship and the Smith Entrepreneurship Research Conference will host a panel discussion among experts from the academic, regulatory and entrepreneurial communities on how to regulate the industry in a way that protects investors from fraudulent activity while preserving the spirit of the JOBS Act.
The panel will be moderated by Brent Goldfarb, Academic Director at the Dingman Center and Associate Professor.
The panelists will include:
Wayne Kimmel, Founder and Managing Partner, Seventy-Six Capital
David Lynn, Partner, Morrison & Forester, and former Chief Counsel of the Division of Corporation Finance at the U.S. Securities and Exchange Commission
Ramana Nanda, Associate Professor of Business Administration, Harvard University
Brian Knight, Associate Director, Financial Policy, Center for Financial Markets, Milken Institute
The panel culminates the annual invitation-only Smith Entrepreneurship Research Conference hosted by the University of Maryland, which is attended by faculty from leading academic institutions (e.g., Wharton, Stanford and MIT). Leading researchers and rising stars in entrepreneurship research gather to discuss relevant social, economic and organizational issues around entrepreneurship.
The crowdfunding panel is the only session open to the public. Join us for the event, which will be held in Tyser Auditorium, Van Munching Hall at 3:30 on Friday, May 8. For more event details, please click here.
I first met student entrepreneur Brooks Gabel in 2012 when he began coming to the Dingman Center to get feedback on what seemed like a brazen business idea for such a young man. Brooks was taking a big risk and I wondered how he’d accomplish such a mission and bring it to fruition. I know now–through two long years of customer discovery, pivoting, research, passion and just plain hard work. Now a senior at the University of Maryland (UMD), Brooks is the founder of justlikeyou.org, a non-profit organization providing a free and anonymous social network for people 13 years and older going through the coming out process. Through developing online and mobile technology, coordinating LBGTQ competency/suicide prevention training and connecting users from the network to their local communities, justlikeyou.org is working to eliminate the burden of coming out. I recently sat down with Brooks to talk about the history of his company and his plans for the future.
Danielle Bennings (DB): Tell me how and why you started your company? Brooks Gabel (BG): The company started after my decision to leave UMD’s Division 1 swim team. It was my personal perception that the college community was not accepting of an openly gay athlete. That was the time when I swore to myself that I would do something to create inclusive environments in our schools, on our teams, and in our communities.
DB: How did you first get involved with the Dingman Center? BG: I started coming to Innovation Fridays to talk to the Entrepreneurs-in-Residence. The idea started as a question of whether the personal narrative could guide a discourse around the coming out process. The feedback I got was to test it, so I started the Just Brooks blog and began writing about my personal story. Eventually I invited some of my friends to write about their stories. After a month, emails began flooding in from UMD all the way to Australia from people who could relate to my story. It was at this time that I realized my idea could have huge impact on a global scale.
Members of the justlikeyou.org team
DB: What happened next?
BG: In January 2012, my parents helped me fund the site and we hired a web development company based in Washington D.C. to develop the social network. In the beginning it was just me facing plenty of people that told me no. Since then we’ve developed a custom social network that connects free users with other people going through the coming out process and volunteers who have been through it before. The Just Like You team has gone from being a team of solely myself to a team of 21 people; 16 from the U.S. and five who are international. We all collaborate through Skype and conference calls to deliver on our mission.
DB: Have you made any connections on campus? BG: We recently brought on a UMD student that you connected me with. He is another entrepreneur working in the Startup Shell who will film a campaign video that addresses our story, the problem we’re solving, the solution we’ve created, the team creating it, and where your donations will go for our Indiegogo campaign.
Brooks Gabel, Founder, justlikeyou.org
DB: I know you’re embarking on a crowdfunding effort. Tell me more about your Indiegogo campaign. BG: Our Indiegogo campaign is a $50K online fundraising campaign to generate awareness about the network and to raise funds to develop technology, coordinate LBGT competence and suicide prevention trainings, and connect users from the network to their local communities. It will launch on February 1, 2013 (my birthday) and will continue until the site launch on April 13, 2014.
DB: That’s great–I’ll check it out. What do you plan to do next? BG: Unlike my peers, I haven’t gone on a single interview. This will be my job after college. This is what I want to do. I understand that I’m not going into investment banking, but at the same time this is the resource I never had.
Brooks Gabel, Founder, justlikeyou.org
DB: What is your ultimate goal for what justlikeyou.org will become? BG: We see this as being an international operation. We designed it so that the resources aren’t bound by language or location. Everyone’s story is unique so there is a seemingly infinite amount of people who can engage in the discussion and ultimately we would love for people who have come out, for people who have an LGBT sibling or friend or parent, to join the conversation. The social change will happen when we recognize that the story of the ally is just as important as the person who is going through the process.
DB: Brooks, thanks for answering my questions. I hope we’ll continuing seeing you in the spring. BG: I will continue spending a lot of time here — the Dingman Center bullpen has become my office. I still meet with Dingman Center staff and EIR Harry Geller to field new ideas and update them on my progress.
To connect with Brooks, email him at brooks.gabel@justlikeyou.org. Connect with justlikeyou.org on Facebook and Twitter. Follow the Dingman Center blog for updates on the justlikeyou.org Indiegogo campaign and to read about other student entrepreneurs.
Meet Live Unchained, an EnTERPreneur Academy company in the Hatch stage that is in the midst of a major crowdfunding campaign on IndieGoGo. We caught up with Kathryn Buford, the founder of Live Unchained, to chat about her organization and her latest efforts.
Tell us about yourself and your company.
A: I am Kathryn Buford, a PhD student in sociology at UMD, an artist, journalist and digital media consultant.
My organization is Live Unchained, an international arts media and events organization featuring works by female artists across the African diaspora. Our media offerings include a growing online magazine at www.liveunchained.com where we’ve interviewed over 100 female artists from over 16 countries. We also offer a variety of events such as art exhibits, festivals, film screenings, concerts and now, with the help of our Indiegogo supporters, we’d like to add an awards ceremony to our offerings as well.
How did you come up with the idea?
A: I started Live Unchained with my college roommate, Miriam Moore. She majored in Graphic Design and I studied Sociology and African American studies. A lot of our classes overlapped and led us to discuss topics like art, social justice and black identity. In our eyes we had pretty radical ideologies. Negative and limited representations of black women in popular culture really upset us and learning more about the history behind those images added fuel to the fire. When it comes to arts media and venues, women of African descent are still under-represented, with not enough done to reflect the diversity of our perspectives and experiences.
At the start, we wanted to create a cultural project that would critique the misrepresentation and under-representation of black women, by satirizing the absurdity of it all. But, as we grew – putting others first and developing a global conscience – the project changed. We didn’t want it to only be about what was wrong, but also celebrating what black female artists were creating. We grew to see it as a platform and community to unite black women across the diaspora.
How has the Dingman Center and the EnTERPreneur Academy helped you and your startup?
A: I am so grateful for all the wonderful entrepreneurs the EnTERPreneur Academy has allowed us to meet. It’s amazing to not only learn about business marketing and strategy from some of the leaders in the industry, but to also see their human side. These accomplished business executives have been so humble and down-to-earth; I really respect their approachability because they model for me the type of entrepreneurial leader I want to be. I also love seeing my colleagues in the program and learning about their businesses.
Tell us about your Indiegogo campaign.
A: The campaign is called “Terrifying, Strange & Beautiful.” The name comes from a line from the poem, For Women Who Are Difficult to Love by London-based Somali poet, Warsan Shire: “You are terrifying and strange and beautiful, something, not everyone, knows how to love.”
After I heard these words I shared the poem with everyone I could. Later, I had a vision for an awards ceremony titled, “Terrifying, Strange & Beautiful,” The goal of this ceremony would be to recognize the many amazing artists that we’ve interviewed during the last 4 years on Live Unchained for their layers, fire, and vulnerability, both as individual women, and as part of an international community. The ultimate message being that, like in Warsan’s poem, these are qualities meant to be celebrated.
With Warsan’s blessing, we’re raising funds for an awards the ceremony to honor artists across the African diaspora. The funds will also cover the costs of Warsan’s travel and accommodations so she can attend the ceremony. In conjunction with the awards ceremony, Warsan will host a workshop on healing through narrative and participate on a panel on cultural activism.
Why did you decide to utilize crowdfunding and what have you learned about running a crowdfunding campaign so far?
A: Being very resourceful, we’ve been able to put on some really great Live Unchained events and share some great magazine features. However, to make “Terrifying, Strange & Beautiful” a reality, we need money.. For this campaign, I decided we’d raise our own funds instead of waiting on someone else’s grant or competition time-table.
I did a lot of research on crowdfunding platforms and learned some are better suited for different type of initiatives. We’re raising funds for an arts initiative and want to avoid the risk losing all the funds if we don’t reach our goal soIndiegogo is the best choice for us. I’ve also learned the importance of having a strong start, affiliate networking plan and fundraising milestones. We kicked off “Terrifying, Strange & Beautiful” at our anniversary party and it brought a lot of awareness and positive energy to the campaign.
A: I’m really excited about adding people to our advisory board. We’re also adding a non-profit component to the business so we’ll by established as a hybrid for-profit/non-profit entity.
Additionally, we’ll share more regular video features and new content at www.liveunchained.com.
Do you have any advice for fellow aspiring entrepreneurs?
A: When it came to spreading the word about the “Terrifying, Strange & Beautiful” campaign, I had some reservations about asking people for money. One of my mentors told me, simply, if you want people to give you something, you have to ask for it directly. So, I’d say, once you are clear about what you want and why, there’s no need to be self-conscious about asking for the help you need in making it happen.. Make your requests professional, but also personal; whenever appropriate, include a visual component that humanizes your work.
And, most importantly, Live Unchained.
Watch the video below to find out more about Live Unchained’s Indiegogo campaign. Help support Live Unchained by contributing to their Indiegogo campaign at http://www.indiegogo.com/projects/270627!
By Elana Fine, Associate Director, Dingman Center for Entrepreneurship
This past week’s signing of the JOBS (Jumpstart Our Business Startups) Act has brought a lot of attention to technology startups who hope to have better access to capital through crowdfunding. By expanding the pool of investors beyond traditional angel and venture capital investors, the JOBS Act provides fresh access to capital for early stage companies. Although most of the press on this act has related to technology start ups, it remains to be seen whether it will increase financings for small businesses often categorized as “lifestyle” businesses.
Those of us who spend a lot of time with early stage companies that are looking for capital often find ourselves categorizing companies into two buckets – high tech companies suitable for angel/VC funding and lifestyle businesses. The traditional thinking behind this often unfair labeling is that high tech companies in social media, gaming, cloud computing and other related sectors offer investors the hope of a high multiple IPO or M&A exit that will justify the upfront risk and uncertainly. Companies that don’t fit this profile are lumped into this other less sexy category of “lifestyle” businesses, based on the assumption that these companies may not have an exit but will generate enough cash for their owners to take home a cushy salary and live a balanced, stress free life.
The truth is, there is nothing lifestyle about a lifestyle business. If asked, most entrepreneurs opening a restaurant, building a services company or launching a consumer product are constantly worried about making payroll, losing customers and planning for the unexpected. They barely see their family while they work around the clock to avoid additional labor costs. They max out credit cards, put second mortgages on their houses and hit up every uncle, rich or not, for capital. Lifestyle business gives the image of a satisfied shopkeeper closing down on a sunny afternoon to hit the golf course. The reality is these companies have a harder time finding funding than their tech start up counterparts due to tight credit from banks, lack of assets for collateral, and generally lack the possibility for angel or venture investments. I haven’t heard of incubator for up and coming fashion designers, restaurateurs or local contractors. Yet, these are the businesses that are the “glue” of our communities – -not flashy or the next Facebook – but businesses that provide the goods and services we rely on every day and create jobs. As someone who has used the “lifestyle businesses” term on many occasions, I can’t help thinking that there needs to be a better term for this category of companies and a better way to get them financed.
These lifestyle businesses have a branding and capital problem. Why not just call these companies small businesses? We rarely call a technology startup a small business – don’t know why- but we don’t. By following the lead of their tech startup counterparts, these companies need a fresh name and a fresh voice to call attention to their lack of access to capital, similar to the strong voices that lobbied for the JOBS Act. Most of the typical descriptions carry negative connotations – low growth, low tech or capital intensive are some that come to mind. What if we call these companies Upstarts? Could there be an Upstart America Partnership that creates opportunities for these businesses to receive relevant discounts and connects with relevant suppliers, manufacturers and funders? The JOBS Act’s crowdfunding exemption could provide some additional access to capital to these future Upstart entrepreneurs, but due to lack of financing alternatives and unified voice there are still a lot of ideas that will remain un-started.
Elana Fine
Elana Fine is the Associate Director of the Dingman Center for Entrepreneurship. In this role, Elana manages the Dingman Center Angels, a network of active, accredited angel investors providing open and efficient access to early-stage capital for entrepreneurs in the Mid-Atlantic region, and is also the primary center contact within the Smith School and on campus. Prior to joining the Dingman team, Elana was an Associate and a Vice-President at the Boston office of Revolution Partners, a national middle market investment bank specializing in mergers and acquisitions and private capital advisory for the technology industry. Elana earned an MBA from the University of Chicago’s Booth School of Business and a BS in Finance from the University of Maryland.
