notre dame business plan competitions training session jim larkin-bootstrap financing 1/24/2007
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Notre DameBusiness Plan Competitions
Training SessionJim Larkin-Bootstrap Financing
1/24/2007
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Agenda
Jim Larkin Presentation
Future Training Sessions
For Semifinalists– Resources including mentors
– Second Round Submission Details
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Jim Larkin• IrishAngels network member• Co-founded Environmental Health Laboratories (EHL)
• Developed EHL from a start-up to a 112-person company making $10 million per year
• EHL became recognized as the Nation’s Drinking Water Laboratory
• President, Scientific Methods Inc (SMI)• Founded the company in 2003• SMI has won five Small Business Innovative Research grants from
the federal government to develop new products
• Competition judge and mentor, 2001 – present
Bootstrapping Your New Venture
Jim Larkin
President
Scientific Methods Inc.
January 24, 2007
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Three Step Plan vs Two Step Plan
1. “I have a great idea”
2. “I’ll raise money”
3. “Then I’ll service my customer”
1. “I have a great idea”
2. “I’ll service my customer”
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Conventional Sources of Funding Exist Your savings Family Friends Fools (Angels?) Small Business Administration loans Banks (Second Mortgage) Equipment leases Angels
Bootstrapping Your New Venture
Holes that I have stepped in
Rocks that I have stepped on
“Thumbing Your Nose at the VC”
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First Big Hole: Raising Capital Goal raise $100k
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Big Hole #1: Raising Capital Goal raise $100k Go to lawyer Spend $9k
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Big Hole #1: Raising Capital Goal raise $100k Go to lawyer Spend $9k Go to friends, family and fools Raise $11k Net $2k
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Big Hole #1: Raising Capital Goal raise $100k Go to lawyer Spend $9k Go to friends, family and fools Raise $11k Net $2k
Buy back $42k
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Mistake 1: Thinking conventional We were naïve
We could not raise capital We waste time, money chasing money We thought we needed capital.
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Don’t Think Conventional Thoughts BS Learn the rules
MS Learn the exceptions
PhD Think new thoughts
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Don’t Think Conventional Thoughts Big Company Use the rules
Medium Learn the exceptions
Small Think new thoughts
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Don’t Think Conventional Thoughts
There ain’t no rules around here!
We’re trying to accomplish something!
--Thomas Edison
Small Think new thoughts
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Mistake 2: Thinking we needed Capital
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Mistake 2a: Thinking we needed Capital
Too much money can be a bad thing!
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Mistake 2a: Thinking we needed Capital
Too much money can be a bad thing!With money you spend it before the Universe speaks
Usually you waste it on what YOU think customers want.
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Mistake 2: Thinking we needed Capital
NEVER fund your new venture
ALWAYS fuel your new venture Resources and energy
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Mistake 2: Thinking we needed Capital
NEVER fund your new venture
ALWAYS fuel your new venture Resources and energy
“Extraordinary claims require
extraordinary proof”
--John Glenn
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Proofs Environmental Health Laboratories
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Seek revenue, NOT funding Environmental Health Laboratories
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Proofs (that you don’t need money)
As a start up gots $500k in reagents
Pay no rent --> Lab space for stock --> Tattoo parlor New laboratory equipment ($200k) $144k worth of free instruments
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Proofs
$144k worth of free instruments
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Work with the coin-of the-realm! $500k in reagents Nearly no cost
Lab space for stock Store was empty
New laboratory equipment Client feedback $144k of instruments Relief of
boredom
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Partner, Partner, Partner! Financial support from:
Your spouse Your business partners Your corporate partners Your landlord Your lawyer Your accountant Your vendors Your customers (e.g. Syva)
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Proof What would it cost to get …
10 liters of specialty chemical made
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Proof What would it cost to get …
10 liters of specialty chemical made … on a Sunday
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Proof What would it cost to get …
10 liters of specialty chemical made … on a Sunday … by a PhD chemist
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Proof What would it cost to get …
10 liters of specialty chemical made … on a Sunday … by a PhD chemist … who owns the patent on the chemicals
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Proof What would it cost to get …
10 liters of specialty chemical made … on a Sunday … by a PhD chemist … who owns the patent of the chemicals … who doesn’t need the money
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Proof What would it cost to get …
10 liters of specialty chemical made … on a Sunday … by a PhD chemist … who owns the patent of the chemicals … who doesn’t need the money … is 67 years old and has major health problems
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Proof What would it cost to get …
10 liters of specialty chemical made … on a Sunday … by a PhD chemist … who owns the patent of the chemicals … who doesn’t need the money … is 67 years old and has major health problems … who owns his own company
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Partner, Partner, Partner! What would it cost to get …
10 liters of specialty chemical made … on a Sunday … by a PhD chemist … who owns the patent of the chemicals … who doesn’t need the money … is 67 years old and has major health problems … who owns his own company Answer: No money!
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Choose you business partner carefully!
Get a $100,000 talent for little no money Double your effort Acquire skill sets you need Stock is the coin of your realm
Thumb Your Nose at the VC!
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Upcoming EventsJanuary 31st – Making it to the Finals: Advice from a
Competition Judge Speaker: Dave Brenner7:00pm, Room 131 DeBartolo
February 7th – Business Models: The Assumptions that Drive the Numbers
Speaker: Dan Dykens7:00pm, Room 131 DeBartolo
April 20th – Final EventsVenture Fair 10:30am-12:30pm Giovanini Commons,
MendozaFinal Event 1:30pm-4:00pm Jordan Auditorium, Mendoza
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Helpful Resources First Round judges feedback and contact opportunities
Mentors
Participants Area for Competition:
– http://gigot.nd.edu
Business Plan Pro software
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Second Round Submission Requirements
February 23rd – Second Round Submission Deadline
Submission Components:• 10 – 15 slide PowerPoint presentation
• Business Plan:Plan not to exceed 25 pages with no more than 15 pages of appendices (40 page maximum submission)
Submission Guidelines posted at http://gigot.nd.edu
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Next StepsReview first round evaluations and make contact with judges
who provided contact information
Make contact with your mentor early and often
Prepare your second round submissions
Contact Theresa Sedlack or Melissa Paulsen with any questions or additional competition support needs
- [email protected]; 574.631.3809- [email protected]; 574.631.7568