Tag Archives: JOBS act

Event Recap: 2015 Smith Entrepreneurship Research Conference

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

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Smith Centers of Excellence and SERC to Present JOBS Act Panel: “How To Protect The Crowd In Crowdfunding”

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.

jobs-act-senate-passesOn 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.

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Nothing Lifestyle about a Lifestyle Business

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.

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