Entrepreneurship is touted as the salvation for many who have great ideas for how to improve our lives and grow the economy. However, the number of entrepreneurs that fail still far exceed the much heralded few that succeed. Why is that?
The answer is clear – the lack of a well thought plan and insufficient capital to bring the business concept to a commercial success. Entrepreneurs are notoriously long on ideas, but short on cash. You would think that anyone starting a new business would have a plan – right? Wrong!
Typically, fused with enthusiasm the founder and their soul brothers rush wildly into business and shortly thereafter realize that the little cash that they had has been spent on early stage essentials that have resulted in no tangible results. In life, as in business, everything takes longer and costs more.
In his new book, How to Fail at Almost Everything and Still Win Big, Scott Adams, the creator of Dilbert, shares his insight on planning: “no one with accounting skills would get involved with a business model that can’t work on paper.”- Developing a business plan is an invaluable exercise that can be done on paper or more likely on a computer these days, which can save a would-be entrepreneur from themselves. The real value of the exercise is in the process, not the plan.
Building a business plan before investing the precious cash that they have is a critical learning experience for any entrepreneur. Just the process of developing a break-even analysis is an eye opener for many entrepreneurs. You need to be convinced that your idea for a better world can be brought to market, generate a profit, and most importantly - a return on the investment - for you and whoever else is financially involved in the business with you, or else why invest in it?
This leads to the next fundamental element in the success of any new business – raising the cash to implement the plan. If you have done a good job in developing the model for success in your business plan you should be more convinced than ever that your value proposition is viable. Likewise, having polished your unique selling proposition, you can present it with passion and confidence to prospective investors.
The initial funding for many new businesses comes from the founder, their soul brothers, family members, friends, and other relatives. These start-up funds are quickly spent on establishing the foundation for the start-up, i.e. getting ready to do business. Marketing the value proposition and creating awareness typically requires an initial additional investment from angel investors – those individuals who are believers in entrepreneurship primarily because they did it themselves and were successful. If they see value in your business concept, are convinced that you have the passion to make it happen, and have a viable model for success demonstrated by your presentation and business plan, they will invest in you and your value proposition.
As you can see, this process is quite challenging and an intimidating task for inexperienced entrepreneurs.
An angel investor understanding this scenario has developed a platform and educational process to prepare entrepreneurs for more successful start-ups. Mario Casabona, a successful entrepreneur and angel investor has focused his resources and network of like-minded investors, strategic partners, and others in helping aspiring entrepreneurs to fulfill their dreams by creating Tech-Launch, a combination of an incubator and accelerated educational experience for “techies”.
Mario has gone one step further by recruiting a cadre of mentors from all disciplines that are available to TechLaunch teams for advice on every aspect of business.
The process begins with entrepreneurs and their colleagues applying for an opportunity to be considered for the Tech-Launch business training program, called Launch-Pad. Each team is evaluated by the Tech-Launch selection committee and, if approved, then enters the 16-week Launch-Pad program at the TechLaunch offices wherein they get an education in developing a winning business plan, hone their unique selling proposition, and regularly meet with mentors who share their years of experience with the founders and their teams.
The culmination of the process is the development of a “pitch deck”, a combination of a graphically sophisticated presentation of each team’s technology and a polished presentation of their value proposition. These presentations take place on Demo Day which is held on the campus of Montclair State University. Demo Day consists of an exhibit area in which the teams meet with prospective investors, reporters from the press, and a wide variety of other interested associates of Tech-Launch, after which each team makes their “formal pitch” to the audience of angel investors, early stage venture capital firms, and potentially strategic partners. After the presentations there is another informal opportunity for networking in the exhibit area.
After a few very successful Demo Day’s, Mario Casabona’s vision of creating a platform to advance the opportunities for innovative tech entrepreneurs and assist them in making their dreams a reality has become an ongoing success. Graduates of the program have received various levels of funding to implement the next phase of the evolution of their businesses. Their testimonials reinforce the brand equity of TechLaunch.
This model for success should be emulated by other angel investors across the country.