Find ideas by thinking in opposites. Do due diligence on potential investors. Protect your brand as you grow. Don’t be afraid of failure—but never fail alone.
Those were just a few pieces of advice offered by seasoned entrepreneurs during the second annual Entrepreneurship Conference, held at the Darden School on November 11 and 12, 2010. The event was sponsored by the Batten Institute’s Center for Entrepreneurial Leadership, as part of its mission to contribute to a robust ecosystem for new-venture creation.
This year’s conference, titled “The Life Cycle of a Startup,” attracted more than 200 Darden alumni, students, and community members—both active and aspiring entrepreneurs—who attended lively and highly practical sessions led by Darden professors and alumni representing a broad array of entrepreneurial experience.
As Professor Susan Chaplinsky noted in a session on exits, “The end shapes the beginning.” This perspective was echoed by many moderators and panelists, who described the nuts and bolts of each stage of new-venture creation while stressing the importance of a holistic view of the process: nurturing the germ of an idea, funding it, launching the business, managing growth, and planning the exit.
The event began with the final round of the Darden Entrepreneurial Concept Competition, during which seven finalists (from 40 entries) presented business concepts and fielded questions and suggestions from a panel of judges. The winner of the Darden competition—Brianne Warner, who is developing a concept to streamline the ordering of free digital photography prints—represented Darden in the November 19 UVA Entrepreneurship Cup.
Those with an intriguing business concept are at the very beginning of the life cycle. Where do those ideas come from? Not from sitting at a desk, said author, consultant, and Batten Fellow Chic Thompson. Drawing from his work at Disney, the Cleveland Clinic, and Pepsi, Thompson advised those in search of great new-business ideas to step away from their desks, both literally and figuratively, by challenging the analytic and critical approach most of us were taught as children. Learn to say “yes, and” instead of “yes, but,” look through magazines backwards, flip negatives into opportunities, and ask such questions as “What would I never do?”
In a session titled “What Do You Need to Start a Business?”, Darden professor Saras Sarasvathy, known for her work on the approaches of successful entrepreneurs, led a discussion with Darden alumna Andrea Ayres, founder of Splendora’s Gelato in Charlottesville, and R. “Jerry” Nemorin, founder and CEO of LendStreet, a peer-to-peer lending company. The two spoke about what it was like to leave a secure job on Wall Street, overcome a fear of failure, and get up to speed in entirely new areas—in Ayres’s case, gelato equipment and dairy farms.
Funding, a concern of entrepreneurs at every stage of the life cycle, was the topic of a session led by Darden alumnus Trip Davis, who cofounded travel technology and data services company TRX. Panelists, who represented a deep bench of experience, noted that raising money is harder and takes longer than most people envision. And venture capitalists are increasingly looking for businesses that already have some revenue and a degree of operational maturity. Their advice: cast a wide net by exploring not only equity arrangements and other private capital but also federal grants. And look to funders not just for money but also for expertise and connections.
If you’ve survived the initial phases, the next consideration is growth: whether and how to pursue it, and how to deal with the operational challenges and the brand dilution threats that come with it. This has been the research focus of session moderator Ed Hess, a Darden professor. In the case of alumnus Lyons Brown and his team at Altamar Brands, a marketer of artisanal spirits, growth was “thrust upon us” when Swiss Absinthe maker Blackmint Distillery asked Altamar to market its product in the United States. This deal propelled Altamar into hypergrowth, Brown explained, forcing the young company to make major changes in resource allocation and operations.
Entrepreneurs must plan for exit from the outset. This was the message from panelists in the final session, who included Adenosine Therapeutics cofounder Robert Capon and attorney Jay Moore, whose practice focuses on M&A, financing, and private equity deals. Investors in a startup will be looking for a course of exit, so entrepreneurs must prepare their ventures for due diligence at the very beginning. They must also anticipate tensions during the exit stage among founders, the management team, and investors, all of whom have different risk appetites, economic incentives, and goals for the enterprise.
The conference also included a hands-on workshop for attendees interested in exploring their own business concept. Seasoned entrepreneurs Philippe Sommer, Director for the Center of Entrepreneurial Leadership and Darden alumnus Chip Ransler, co-founder of Husk Power Systems, led the lively, interactive session. Participants informally sketched out their business “story,” mapping out the market pain, solution, customers and other key components of their business concept. Attendees were then given the opportunity to informally pitch their concept to a panel of investors and entrepreneurs.
The Center for Entrepreneurial Leadership, part of the Batten Institute for Entrepreneurship and Innovation, cultivates principled entrepreneurial leaders in new ventures, established companies, and not-for-profits. The Center offers academic and experiential programs, a business incubator, business plan and concept competitions, workshops, conferences, and mentorship opportunities. Darden’s entrepreneurship program was ranked number one in faculty and number seven in overall Entrepreneurship programs by Entrepreneur magazine and the Princeton Review.
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