Friday, July 3, 2015

Bank loan v.s. crowdfunded loan. What is the difference?

Bank loan v.s. crowdfunded loan. What is the difference? by Lendoor

Both loans will get you the funds to grow your business, but the process of securing those funds is very different. The resulting obligation would likely be very different too.


Different process

For a bank loan expect to spend most of your time on paperwork and collecting documentation, then waiting for response. Your personal credit score would almost certainly be checked.

For a crowdfunded loan, most of your effort will go into finding the people that will invest in your loan. You would have to spend time preparing your campaign as well. Your credit score will not be checked, since your friends and family would be the judge of your credit worthiness, not a credit algorithm.


Different obligation

A bank loan is typically secured by assets of the company, or by personal assets. It is almost always personally guaranteed by the business owner. A crowdfunded loan is unsecured and without quarantine by the owner. If you are able to crowdfund a loan, your company will have better financial flexibility.


Loans for Start-Ups?

Banks don’t usually lend to start ups, especially if you don’t have personal or business asset to offer as a collateral. If you have a solid business idea and people that believe in you, you could raise the money for your start up even if your only assets are your business plan and your reputation.


Crowdfunded loans with benefits

There could be a number of additional benefits that come with a crowdfunded loan:
·         Customer loyalty. Your customers could be literally “invested” in your business’ success. 
·         “Word of mouth” advertising. Investors are naturally great advocates for a business. 
·         Buzz factor. A crowdfunding campaign may increase visibility and create buzz about your company in your community.


Where can you crowdfund a loan in Texas?

You have to set up your crowdfunding campaign on a Texas registered crowdfunding portal. There are currently only two registered portals that specialize in debt, and they are quite different: Lendoor and NextSeed.  Lendoor is the only platform that works with start ups and does not require credit check. 
 

Saturday, June 27, 2015

Jessica Shortall talks about Texas Competes and LGBT Issues in Entrepreneurship


Jessica Shortall talks about Texas Competes and LGBT Issues in Entrepreneurship


Where are you from originally?

I grew up in northern New Jersey, in a tiny town called Chester.


What university did you go to?

I did my undergraduate degree in art history at Wake Forest University in North Carolina, and my MBA at Oxford University in the UK, with a focus on social entrepreneurship.


What brought you to North Texas?

Family and opportunity. My husband and I spent six years in Austin. We moved to Dallas in 2014 to bring our family (we have two small children) closer to his family. We also wanted a bigger market for him to grow his architectural practice.


What is your group’s mission?

Texas Competes is the first statewide coalition making the economic case for Texas to become welcoming and inclusive to lesbian, gay, bisexual, and transgender (LGBT) people. We exist to give voice to the competitive interests of businesses and economic development leaders in the areas of talent, entrepreneurship, corporate relocation, and travel and tourism. All of these pillars of economic competitiveness are being influenced by state brands on LGBT issue.


What need does it fulfill?

In 2015 and beyond, we are seeing talented workers, entrepreneurs, corporations, and conventions make decisions – decisions that have real economic impact – based on how states, municipalities, and workplaces treat LGBT people. We’ve seen it play out in Indiana and Arizona and Louisiana, where anti-LGBT legislation resulted in economic fallout to the tune of hundreds of millions of dollars. We hear it from HR leaders – that they feel a competitive disadvantage for the best talent, because Millennials in particular – gay and straight – are making decisions about where to live and work in part based on how LGBT people are treated. We see the data, too. As just one example: Millennials will be 75% of the American workforce by 2030, and 79% of non-LGBT Millennials want employment non-discrimination for LGBT workers. More than 70% of them favor marriage equality. The Detroit Chamber of Commerce found that 40% of Michigan college grads are leaving the state, and 38% of this “brain drain” is going to more LGBT-friendly areas. This group of people is making real economic decisions based on how LGBT people are treated, and that decision-making process matters to business competitiveness.

There is real, data-driven economic interest here, and it has too often gotten lost in the very emotional language more typical to LGBT issues. Businesses have the right and responsibility to protect their own competitive advantage. The Texas Competes pledge, which does not cost anything and does not require businesses to actively lobby, creates a unified business voice on this topic. As of June 2015, more than 320 Texas businesses, including 18 Fortune 500 companies, dozens of start-ups and venture-backed firms, and several chambers of commerce have signed the pledge.


What exactly does it bring to startups?

The Texas Competes pledge provides entrepreneurs with a voice to protect their own competitiveness in the war for talent and resources. When businesses large and small speak up on this issue in terms of economic growth, lawmakers pay attention. We saw more than 20 anti-LGBT bills die in the 2015 Texas legislative session – more than in any session in any state in U.S. history. Most lege-watchers credit the business voices on LGBT issues for this historic shift – examples in the press include http://www.cnbc.com/id/102726428 and http://www.huffingtonpost.com/tyler-curry/the-free-market-economics-of-lgbt-equality-in-texas_b_7497020.html. Businesses have the power to shift Texas’ brand on this issue – and that will translate directly into greater competitiveness to lure the very best people to the state.


What type of startup would benefit from your group?

Any startup that wants to be able to recruit the best talent to live and work in the state would benefit from adding its voice to the Texas Competes coalition, via our pledge at www.texascompetes.org. It’s free. It takes about a minute. And it is changing the way LGBT issues are viewed in this state, in a massive way.


What was the most challenging aspect of starting up the initiative?

The most challenging aspect of getting going was the “this is Texas” perception. Our core group of entrepreneurs and business executives, who drafted the pledge, were told again and again that “this is Texas” and such an initiative would never get off the ground. What we found, in fact, was a deep and wide desire to speak up on this issue, and many concerns that Texas’ anti-LGBT brand would be a competitive risk going forward. We have seen incredible appetite from among the business community!


What advice do you have for entrepreneurs?

I have always defined entrepreneurship as punching above one’s weight: figuring out how to leverage limited resources into much bigger aims, appearing bigger than one is (also known as “fake it till you make it”), and laying intelligent groundwork, systems, and operations for the toughest challenge of all: growth beyond one’s wildest expectations.


What local-based resource have you found to be the most helpful and why?

Our Texas Competes mission and pledge have traveled the fastest and widest via nodes and networks. Chambers of Commerce sharing what we do with their membership, incubators and investors sharing with their startups, individual business leaders sharing with their industry or business associations. We would welcome your readers doing the same – sharing www.texascompetes.org with nodes and networks that can exponentially increase the awareness of this opportunity in every corner of the state. You can also find us on social at www.facebook.com/texascompetes and @txcompetes on twitter!


Tuesday, June 23, 2015

Jonathan Blackburn of the Texas Pace Authority talks about the Pace Program

Jonathan Blackburn of the Texas Pace Authority talks about the Pace Program

Where are you from originally?

I grew up in Pensacola, Florida.


What university did you go to?

I attended Mississippi State University, graduating with a degree in Chemical Engineering, before studying at Duke and the University of Cambridge.


What is your group’s mission?

Our mission is to provide a new type of financing for energy and water efficiency upgrades to commercial property. The goal of the Texas PACE Authority (TPA) is to administer and promote Texas’ Property Assessed Clean Energy (PACE) programs for the purpose of helping property owners utilize economically sound energy and water improvements for their properties.


What need does it fulfill?

The biggest barrier to investment in upgrading buildings is in how to pay for the improvements. PACE financing solves many of the problems that have kept our infrastructure from being equipped with new energy efficient technologies.
PACE financing lets you put in energy efficiency measures and simultaneously increase your bottom line. The goals of the TPA help Texan property owners save money on energy and water bills by being more efficient and environmentally friendly with their resource consumption.


What exactly does it bring to startups?

The TPA allows for increased investment in property retrofits and new energy savings technologies in the state of Texas. For startups, this means that if your company has a technology product with a long payback, or if you have trouble convincing property owners of the financial case for your product, PACE will enable you to do more business. This increased latitude for finance opens the door for startups to enter the market and work with property owners, contractors, and lenders to facilitate and aid the property retrofitting process.


What type of startup would benefit from your group?

Startups related to real estate, construction and property retrofits, clean energy, and finance would benefit from the TPA. PACE financing can be used for energy and water efficiency technologies; if your business is in that space, PACE could benefit you.


What was the most challenging aspect of starting up the initiative?

Working to ensure that the TPA is the unified PACE administrator for the entirety of Texas is a challenging task, but also a necessary one. That is because the TPA, as a Texan non-profit with an emphasis on open market-based approaches to energy finance, is the best positioned administrator to keep prices and fees as low as possible for Texan property owners.

There are 254 counties in Texas, and adopting a PACE program requires a local government resolution. We’re now open in Travis County, and hope to have a couple of more big announcements by the end of the year.


What advice do you have for entrepreneurs?

In the clean energy space, you have to be focused on economics as much as technology. The market will decide which technologies win out, and that decision comes down to the financial bottom line. You have to make sure you can present a sound business case as well as a technology case if you’re going to convince someone to invest in your technology. I work with a lot of engineers and contractors who are really good at selling projects in terms of kWh saved, but really, they should be selling projects in terms of $ saved.


What resource have you found to be the most helpful and why?

Various organizations have been helpful to the development and support of the TPA, including but not limited to Austin Energy, the State Energy Conservation Office, the Environmental Defense Fund, and the US Green Buildings Council. These groups, and more, believe that PACE loans are an important mechanism for the modernization of Texas’ properties, and as such are willing to lend their support, guidance, and resources – that is why they have been the most helpful.


Friday, June 5, 2015

Sloan Foster talks about IdealAsset

Sloan Foster talks about IdealAsset

Where are you from originally?

Lompoc, California a little coastal town north of Santa Barbara. Lompoc is home to Vandenberg Air Force base where the military and now private companies launch missiles.


What university did you go to?

Central Washington University where I majored in Business and Marketing.


What brought you to Austin?

IBM hired me soon after the Tivoli merger to work in Business Development; so, we moved down from Dallas after spending five years there.


What is your groups mission?

To insure the best innovation and intellectual property is put into the best, most capable companies to maximize that innovations global potential.


What need does it fulfill?

There is a vacuum in the buying/selling/licensing of brilliant innovation. The leading firms are essentially privateering the business to serve their own economic interests first think non-practicing entities (aka: patent trolls); then, perhaps their clients.
idealAsset is democratizing the business of transacting and takes no ownership in the patents and IP it sources.

There are millions of patents and other protected innovations in the world today that are sitting idle and/or eventually abandoned simply because they were invented in the wrong company one that doesnt want to maximize its value.

There is no solution, in any country, attempting to match these idle innovations with the most capable organizations. Thats where we come in.

  
What exactly does it bring to startups?

IdealAsset brings the ability for start-ups to efficiently source or exhaust off brilliant IP. By aggregating the world
s available Innovation and Intellectual Property and a vast community of IP buyers, idealAsset creates an affordable and accessible solution for the entire Innovation community from individual inventor to the largest global Innovation holders.

Further, by allowing start-ups an efficient means to acquire patents they have the opportunity to shortcut the risk and process of pursuing their own patents and usually at a cost point well below what they would have spend in their own pursuits. Prosecuting a net new patent application through to issuance can take years and cost more than $25,000 apiece.


What type of startup would benefit from your group?

Start-ups that must rely on IP as a means to operate in a competitive market space. We tend to work with technology, bioscience and medical device start-ups as they tend to be operating in crowded spaces with many well financed incumbents.


What was the most challenging aspect of starting up the initiative?

The biggest challenge has been socializing an entirely new approach to a mature and slow moving industry that has an incumbency of middlemen with little to no incentive for significant change. That and quieting the raucous rhetoric around the need for massive Patent legislation reform by the largest technology firms. The truth is by allowing the market for commercializing IP and patents to mature on its own much of the current day issues with patent trolls and their operating models will wane as new innovation like idealAsset takes hold and obviates that business model.


What advice do you have for entrepreneurs?

Most entrepreneurs recognize the need to protect their ideas through patenting, or copyright or simply trade secret efforts (keeping their secret sauce, well, secret).  That said they look at this effort as a tactical effort with a specific start/stop timeframe.  Investors tend to check the box with asking if start-ups have protected their ideas.

Innovation and intellectual property is a cornerstone strategy to any eager start-ups success.

Markets are dynamic, R&D expenditures in the US are nearly $2.0 Trillion, yes with a T so people and corporations are inventing all day, every day.  Keeping tabs on innovation and new ideas should be as routine as your quarterly financials; finding and partnering with IP service providers can help keep a successful start-up out of (operating) trouble for years to come.


What Austin-based resource have you found to be the most helpful and why?
1)    
           There is a very experienced ecosystem of IP service providers to help entrepreneurs and start-ups with their IP initiatives IP centric law firms, investors, commercialization partners: Dubois, Bryant, Campbell for IP prosecution, AcclaimIP for patent assessment and analytics, dozens of IP brokers with access to the worlds best IP from leading corporations.

2)     Outsource development firms like Calavista Software which I have used in 3 of my last start-ups. While they appear slightly more expensive than hiring your own internal development team they have vast project/start-up experience and their development success rate (on time/on budget/as envisioned product) exceeds 90%; 100% for my companies.  They are simply a more capital efficient expenditure when weighing FCS risk to cost ratios.

Thursday, May 21, 2015

Is Crowdlending better for small business then Crowdfunding?

Depends. What is the stage of your business?

Crowdfunding may be good to get a business concept started, but Crowdlending is better for growing it. Crowdlending will help you raise more money faster, once the market demand is established and the business model is proven.

Why?

Simply put, Crowdlending helps you get a loan, not a gift. You pay back the money with interest, rather then provide rewards to supporters.

Let’s take Jenny for an example.

Few years ago Jenny was the first to offer Italian style espresso in her community. She put down 3 months of rent on a tiny space and funded the

purchase of a second hand espresso machine by offering free coffee, cookies, and T-shirts in exchange of donations from the first espresso enthusiasts.

Jenney’s Coffee Shag was a success. The line in the morning grew ever longer.

Jenney decided to expand into Jenny’s Coffee Shop.  But how much more cookies and coffee can anyone eat and drink?

Jenney launches a Crowdlending campaign instead.  She offers to borrow the money, promising to repay it on a schedule and with interest. Now, her friends and customers can help her out and earn interest on their capital, as well as enjoy a shorter line for their morning espresso. It is a win-win for everyone.

Where can you crowdfund a loan in Texas?

You have to set up your crowdfunding campaign on a Texas registered crowdfunding portal. There are currently only two registered portals that specialize in debt, and they are quite different: Lendoor and NextSeed. The first facilitates term loans, and the latter does revenue sharing loans.

Wednesday, May 13, 2015

Crowdlending in Texas--Can my small business get a loan?



What is Crowdlending?

Crowdlening is funding a small business loan by getting many people to lend small amount. These could be customers of the business, neighbors, friends, family or community members. Earning interest on your investment is even more compelling when you are helping people and businesses that are important to you.
Crowdlending became possible in Texas only recently through the implementation of the Texas intrastate crowdfunding exemption.


Who is it suitable for?

There are two things that you need to successfully crowdfund a loan: 1) a cash flow generating business (so you can pay back the loan), and 2) a large network of supporters that you can reach out to. That could be personal or business connections.  Thanks to the new regulations you can now leverage your network to raise growth capital for your business, instead of knocking on closed bank doors.
To crowdfund your loan your company must be registered in Texas.  You also can raise money only from Texas residents.


What does it involve?

If you want to crowdfund in Texas, you need to follow a few rules.

1.     Pick a portal
You have to set up your crowdfunding campaign on a Texas registered crowdfunding portal. There are currently only two registered portals that specialize in debt, and they are quite different: Lendoor and NextSeed.

2.     Povide information
Your crowdfunding campaign must contain certain information about your business and about your loan. While all the regulatory requirements may seem overwhelming, most portals will assist you with preparing your campaign.

3.     Crowdfund

This is by far the most important part of the process. The success of your loan is in your own hands, so be prepared to reach out to everyone you know. If you reach your target amount you will receive your loan. If not, all the pledges will be returned to investors. Remember, it is a loan, not a gift! This makes it more likely to fund. 

Saturday, May 2, 2015

Viktoria Krane talks about Crowdlending -- Lendoor

Viktoria Krane talks about Crowdlending -- Lendoor

Where are you from originally?

I was born and raised in Bulgaria. I came to the US as a student almost 20 years ago.  Since then, I had lived and worked mostly in New York, but also spend couple of years in London, Hong Kong and LA.


What university did you go to?

University of Oklahoma. I’m a Sooner. Don’t hold it against me.


What brought you to Austin?

Crowdfunding. I came to Austin for the first ever Texas crowdfunding roundtable.


What is your group’s mission?

Our mission is to help start-ups and small businesses in Texas get crowdfunded loans from friends, customers and supporters — instead of bankers — with terms that work for both sides. 


What need does it fulfill?

Affordable growth capital is crucial but hard to secure for small business.


What exactly does it bring to startups?

Through technology, we re-invent and improve the traditional friends and family market for small business financing.  We make it more efficient, official, transparent, and automated, which is better for both sides.


What type of startup would benefit from your group?

A startup with strong social network and cashflow. If your are expecting sufficient cashflow to service a loan, you should consider crowdlending.


What was the most challenging aspect of starting up the initiative?

Perhaps educating people about crowdfunding. There is great deal of misunderstanding and confusion, especially with the new Texas rules.


What advice do you have for entrepreneurs?

Everything takes twice as long and cost twice as much. Plan accordingly.


What Austin-based resource have you found to be the most helpful and why?


TEN has been a great partner in Austin. Local knowledge is very important. 

Tuesday, April 28, 2015

Jason Taylor talks about Codelaunch and their upcoming Pitch Day

Jason Taylor talks about Codelaunch and their upcoming Pitch Day


Where are you from originally?

The President of Code Authority and Founder of CodeLaunch, Jason W. Taylor, is from Oklahoma City, Oklahoma.


What university did you go to?

University of Oklahoma


What brought you to Austin?

We are based in Dallas (Frisco) Texas


What is your group’s mission?

The CodeLaunch mission is to offer a venue for very early stage App ideas to get seed funding and launched as a service to the hopeful entrepreneurs and active angels in the North Texas community.


What need does it fulfill?

CodeLaunch is an App startup funding and investment venue. We invite the general public to bring their “app ideas”, line-of-business concepts and other ideas that could benefit from software development services to compete for an invitation to our annual event in August.
Along with our own investment, we hope get third party investors will also help seed fund some of the competitors.


What exactly does it bring to startups?

The “overall winner” of Pitch Day gets investment from the software development services company that produces the event, Code Authority Custom Software. In short – they get a partner, not a vendor. They can get their app built for free.

There are many other benefits, awards, and ways to benefit, as well as representatives from Angel groups and VC at the event and networking reception which follows. Competitors can potentially be funded even if they are not the “Overall Winner”.

What type of startup would benefit from your group? Any Embryonic Stage, or Early Stage Software Application (or simple “App”) startup.


What was the most challenging aspect of starting up the initiative? 

This is CodeLaunch’s 5th year. We have started 6 companies in our history and helped 2 others connect with 3rd party funding at Pitch Day.  While we have one recent “Exit” we are proud of, and have provided thousands of hours of free labor to the various benefactors, the most challenging aspect is getting people to know this medium exists and is credible.


What advice do you have for entrepreneurs?

Have the guts and mental toughness to get back up every time you get knocked down when working on your startup ideas.


Key Information
http://www.codelaunch.com/
Applications Accepted via website through May 31, 2015.
Finalists’ Pitch Day event: August 13, 2015 Frisco TX 2:45-5pm, Networking Reception follows.

CodeLaunch is produced for the benefit of the startup community by Code Authority Custom Software and a group of sponsors and partners. http://www.codelaunch.com/.

To attend CodeLaunch Pitch Day RSVP to Sarah Mix, 469-656-5023, 

2013 Winner RentEval “Exit”

More information here.





Saturday, April 18, 2015

Kevin Castello talks about Best Fit Capital

Kevin Castello talks about Best Fit Capital

Where are you from originally? 

I was born in San Angelo Texas.


What university did you go to?

I have an undergrad from Austin Graduate School of Theology and a MBA from Baylor University.


What brought you to Austin?

My family moved here in 1984 so I have witnessed some of the tremendous change the Austin area has seen in the last 30 years.


What is your group’s mission?

Best Fit Capital seeks to help entrepreneurs know which type of investment capital, investor, and process is the best fit for their goals.  I want entrepreneurs to understand what the implications of investment capital are and to be comfortable with the expectations of the investors.


What need does it fulfill?

There are many potholes on the entrepreneurship road and I want to help entrepreneurs avoid the ones related to funding their venture.  No entrepreneur would launch a venture without strategies for development/marketing/sales but many do so without a proper capital strategy.


What exactly does it bring to startups?

BFC helps start-ups to align investment types with their personal goals and to keep it aligned through their end game.


What type of startup would benefit from your group?

BFC wants to help all entrepreneurs in this area.  We offer seminars to allow those with very little capital to get the proper educational information to avoid some of the major issues.  We also offer dedicated consulting to those who are ready for an objective viewpoint during the venture.  BFC wants to be a long term partner with the entrepreneur to help them protect and grow their venture to see their dreams come true.


What was the most challenging aspect of starting up the initiative?

It is entrepreneurial just like any other start-up.  I have left the comfort and stability of a job to pursue my own goals.  I want to see entrepreneurs achieve their goals and get the funding they need but not take capital they don’t need.


What advice do you have for entrepreneurs?

Boot-strap your venture as long as you are able and it is strategically wise to do so.  Once you know you are going to need to raise money then prepare, execute and close your raise.  “Maybe” is the worst thing you can hear from investors as it strings you along.  Make it easy for investors to be able to make a quick, quality yes or no decision so everyone can keep moving.


What Austin-based resource have you found to be the most helpful and why?


The entrepreneurial ecosystem itself.  There are so many resources in Austin:  Capital Factory, Tech Ranch, CTAN, Texas Entrepreneur Network, SKU, professional services, other entrepreneurs and mentors.  Each serves a different entrepreneur in a different circumstance.  It is the accumulation of all of it which makes Austin exciting!

Thursday, April 9, 2015

Badria Jabali talks about her new book "The Blueprint of a Successful Business"


Badria is the author of The Blueprint of a Successful Business


What is your background?

I am an internationally qualified and experienced professional with a background that includes accounting, financial management, project management, team building, financial and business consulting.

How do you help startups?

We help clients analyze their business practices and define requirements to strengthen and grow the business focusing on the financial and management aspects of the business. 


What other positions do you have?

I am  the CEO of Global Business Financial Consulting , a US based consulting practice that offers their services in the US, Middle East, Europe and Asia.


What topics does the book cover?

Performing market research, Creating comprehensive business plans, Building an efficient business model, Setting comprehensive financial strategies, Building a brand name, Setting comprehensive marketing strategies, Building business relationships and maintaining credibility, Managerial skills and organizational behavior.


Where can one find the book?

The book is available on the Kindle store at Amazon here with a price of $25.00.