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Notre Dame Business Plan Competitions Training Session Jim Larkin-Bootstrap Financing 1/24/2007

Notre Dame Business Plan Competitions Training Session Jim Larkin-Bootstrap Financing 1/24/2007. Agenda. Jim Larkin Presentation Future Training Sessions For Semifinalists Resources including mentors Second Round Submission Details. Jim Larkin. IrishAngels network member

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Notre Dame Business Plan Competitions Training Session Jim Larkin-Bootstrap Financing 1/24/2007

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  1. Notre DameBusiness Plan CompetitionsTraining SessionJim Larkin-Bootstrap Financing1/24/2007

  2. Agenda • Jim Larkin Presentation • Future Training Sessions • For Semifinalists • Resources including mentors • Second Round Submission Details

  3. 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

  4. Bootstrapping Your New Venture Jim Larkin President Scientific Methods Inc. January 24, 2007

  5. “I have a great idea” “I’ll raise money” “Then I’ll service my customer” “I have a great idea” “I’ll service my customer” Three Step Plan vs Two Step Plan

  6. Conventional Sources of Funding Exist • Your savings • Family • Friends • Fools (Angels?) • Small Business Administration loans • Banks (Second Mortgage) • Equipment leases • Angels

  7. Bootstrapping Your New Venture Holes that I have stepped in Rocks that I have stepped on

  8. “Thumbing Your Nose at the VC”

  9. First Big Hole: Raising Capital • Goal raise $100k

  10. Big Hole #1: Raising Capital • Goal raise $100k • Go to lawyer Spend $9k

  11. Big Hole #1: Raising Capital • Goal raise $100k • Go to lawyer Spend $9k • Go to friends, family and fools Raise $11k • Net $2k

  12. 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

  13. Mistake 1: Thinking conventional • We were naïve • We could not raise capital • We waste time, money chasing money • We thought we needed capital.

  14. Don’t Think Conventional Thoughts • BS Learn the rules • MS Learn the exceptions • PhD Think new thoughts

  15. Don’t Think Conventional Thoughts • Big Company Use the rules • Medium Learn the exceptions • Small Think new thoughts

  16. Don’t Think Conventional Thoughts There ain’t no rules around here! We’re trying to accomplish something! --Thomas Edison • Small Think new thoughts

  17. Mistake 2: Thinking we needed Capital

  18. Mistake 2a: Thinking we needed Capital Too much money can be a bad thing!

  19. 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.

  20. Mistake 2: Thinking we needed Capital • NEVER fund your new venture • ALWAYS fuel your new venture • Resources and energy

  21. 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

  22. Proofs • Environmental Health Laboratories

  23. Seek revenue, NOT funding • Environmental Health Laboratories

  24. 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

  25. Proofs • $144k worth of free instruments

  26. 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

  27. 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)

  28. Proof • What would it cost to get … • 10 liters of specialty chemical made

  29. Proof • What would it cost to get … • 10 liters of specialty chemical made • … on a Sunday

  30. Proof • What would it cost to get … • 10 liters of specialty chemical made • … on a Sunday • … by a PhD chemist

  31. 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

  32. 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

  33. 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

  34. 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

  35. 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!

  36. 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

  37. Thumb Your Nose at the VC!

  38. Upcoming Events January 31st – Making it to the Finals: Advice from a Competition Judge Speaker: Dave Brenner 7:00pm, Room 131 DeBartolo February 7th – Business Models: The Assumptions that Drive the Numbers Speaker: Dan Dykens 7:00pm, Room 131 DeBartolo April 20th – Final Events Venture Fair 10:30am-12:30pm Giovanini Commons, Mendoza Final Event 1:30pm-4:00pm Jordan Auditorium, Mendoza

  39. Helpful Resources • First Round judges feedback and contact opportunities • Mentors • Participants Area for Competition: • http://gigot.nd.edu • Business Plan Pro software

  40. 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

  41. Next Steps Review 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 • tsedlack@nd.edu; 574.631.3809 • paulsen.5@nd.edu; 574.631.7568

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