So you want to be an entrepreneur?

Image courtesy of i2e.org

Last week I had the opportunity to attend the SXSW (South by Southwest) music festival in Austin, Texas, with literally thousands of live music performances, convention and trade show exhibits, and dozens of panels and guest speakers. Wow! What an event!

Of the many panels I attended, several dealt with small entrepreneurial ventures and their need to funding. In almost every case, these young interactive, music or high tech startups have an extremely difficult time finding the capital necessary for an initial company launch, since risk capital investors typically shy away from startups in favor of ventures that have at least been able to get some traction and demonstrate the potential for a viable business model. Many of the entrepreneurs I met expressed their frustration that the panelists seemed to be saying “Sorry, not interested.”

My advice for would-be entrepreneurs is the same as that from the experts who presented on the panels. Especially in a slowly recovering economy, investors are very leery of investing in startups with no track record that propose to compete with so many other players who may have already attracted some of the identified market share. Especially these days, the inconvenient truth is that new ventures are funded predominantly via bootstrapping and “seed money” from family and friends.

Think of it this way: if you can’t demonstrate to an investor that the people who know you the best, love you the most, trust your integrity and know your capabilities – if those people don’t believe in you enough to invest in your future, why on earth would a perfect stranger want to do so? Bootstrapping is essential to the formation of a business in that, by definition, it requires us to stretch our very limited resources as far as we can. We wear multiple hats because we can’t afford to hire employees, we eat ramen noodles – not steak, and work our butts off to establish ourselves in the marketplace.

At the SXSW conference the keynote address was given by Bruce Springsteen. Among the many pieces of great advice from “The Boss”: when you go on stage to perform, give it every ounce of energy and passion you can muster. “Leave it all on the stage.” That’s what fans expect from great performers. Guess what? It’s no different when launching a business. Are you ready? The curtain’s going up.

Graphic courtesy of Last week I had the opportunity to attend the SXSW (South by Southwest) music festival in Austin, Texas, with literally thousands of live music performances, convention and trade show exhibits, and dozens of panels and guest speakers. Wow! What an event!

Of the many panels I attended, several dealt with small entrepreneurial ventures and their need to funding. In almost every case, these young interactive, music or high tech startups have an extremely difficult time finding the capital necessary for an initial company launch, since risk capital investors typically shy away from startups in favor of ventures that have at least been able to get some traction and demonstrate the potential for a viable business model. Many of the entrepreneurs I met expressed their frustration that the panelists seemed to be saying “Sorry, not interested.”

My advice for would-be entrepreneurs is the same as that from the experts who presented on the panels. Especially in a slowly recovering economy, investors are very leery of investing in startups with no track record that propose to compete with so many other players who may have already attracted some of the identified market share. Especially these days, the inconvenient truth is that new ventures are funded predominantly via bootstrapping and “seed money” from family and friends.

Think of it this way: if you can’t demonstrate to an investor that the people who know you the best, love you the most, trust your integrity and know your capabilities – if those people don’t believe in you enough to invest in your future, why on earth would a perfect stranger want to do so? Bootstrapping is essential to the formation of a business in that, by definition, it requires us to stretch our very limited resources as far as we can. We wear multiple hats because we can’t afford to hire employees, we eat ramen noodles – not steak, and work our butts off to establish ourselves in the marketplace.

At the SXSW conference the keynote address was given by Bruce Springsteen. Among the many pieces of great advice from “The Boss”: when you go on stage to perform, give it every ounce of energy and passion you can muster. “Leave it all on the stage.” That’s what fans expect from great performers. Guess what? It’s no different when launching a business. Are you ready? The curtain’s going up.

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