So You Want To Be An Entrepreneur
This is National Entrepreneurship Week. Many of us have within us an idea – an idea that we think could change the world or, at least, our world. We want to be our own boss. We want to start our own company.
“What would you do if you knew you would not fail?”
Where does one start? Well, you start with that idea. You start with something that makes you passionate or makes you sing or makes you think you can do it better, faster, cheaper or in a more wholesome way. You research your idea. Will it work? Is someone already doing it? Then you “sell” the idea to your family and friends. The people who know you and believe in you should be your first investors. With their backing, you try it, build it, form it. You build a prototype or working model. Now you need a company to sell it. This is a good time to get to know your local business incubator. I can recommend two in our area. Tech Fort Worth techfortworth.org is an incubator on the near south side of Fort Worth. It is a private/public partnership involved in trying to help small companies with potential get started in the Fort Worth area. Another is N Tech in Frisco www.ntec-inc.org. Both will provide free training and advice and then start up services for a fee. There are others in the area. Try to find one close to you and get to know them. Try to find an individual or two who believe in what you are doing and ask them for enough money (seed money) to get you through your prototype stage.
Now that you have a company – not just an idea – you can try to sell your product or service. You try to sell it to those you think are your target customers. If you are still going at this stage, you are probably going to need more money. You need money for equipment and employees and marketing and advertising and customer service. Where will that come from?
It usually will not come from your bank at this stage unless you are a high net worth individual who can guarantee the loan. Banks generally require collateral – assets of some kind – to back up the loan. This is where the angels come in. This kind of angel does not have any wings. They are ordinary people who have a little money, and want to invest it to help make small companies grow. Reasons are unique to each angel. These are not people who have raised a fund of money from silent investors and promised a return. Angels do their own research and invest their own money. They do form networks to share information and risk. The networks will often form around regions or objectives. Cowtown Angels wwww.cowtownangels.org invests in Fort Worth and the surrounding region. North Texas Angels Network (NTAN) www.northtexasangels.org invests in the North Texas region. Golden Seeds www.goldenseeds.com is a national network with a Dallas chapter. It invests in women led businesses wherever they are.
What are these people looking for? What will they ask of you? I call it the 4 Ms. First, what is your business Model? Will it work? The success of your prototype and your ability to sell to your first customers will help with the assessment here. Next, how big is your Market? Is it big enough for both you and the angel investor to make money? Remember, they are investing for their own account – maybe their own retirement. Another important question is “What is your Moat?” By that I mean, how will you keep someone from stealing your idea? Can you patent it? Can you copyright it? Finally, and most importantly, how will you Manage your business? Have you been successful at drawing capable people to work with you? Do you have the experience to succeed? If you don’t have the experience, have you been able to bring in employees or advisers who do? Do you listen to them? Some angels will have a fifth M. A friend of mine says her investments must have Meaning to her. They must resonant with her reasons for being in angel investing.
If you have an idea, go for it! Depending on your stage, contact one of the resources that I have referenced here. If you are not sure, contact me at email@example.com.