Category Archives: entrepreneur

Entrepreneurs Never Sleep…

or do they:

It seems Ted got a little of his own medicine after abusing Travis once too often:

SBSS Week 1: Entrepreneurs Need Passion

I’m helping facilitate the first FastTrac TechVenture program in North Florida, called Success Breeds Success Series (SBSS). It’s an intensive 8-week bootcamp for entrepreneurs, including “secrets of success” from most of the top entrepreneurs in the area.

We have a fantastic group participating and our first week focused on the Characteristics of Entrepreneurs. Jamie Grooms, founder of Regeneration Technologies and AxoGen, was the speaker and we spent considerable time discussing the key traits of entrepreneurs. It was a wide-ranging discussion that I won’t attempt to summarize here; however, there was one takeaway that was a mild surprise to me.

I’m a terribly passionate person and that has an impact on the type of people I back — I’m drawn to others whose passion shows in their efforts and dedication to their companies. However, at SBSS I expected to hear diverse views on whether passion was a defining trait of entrepreneurs — maybe from tech-heavy founders. Boy was I wrong.

Everyone felt passion was a defining trait of successful entrepreneurs. A commitment to do whatever it takes is critical to fight through all the inevitable “no’s” heard when building a business. I believe this also shows itself in creativity — passion makes an entrepreneur think of new ways to create success.

Are you ready to run through walls for your idea? If not, maybe it’s not the right idea or the right time for you — or you need to find co-founders with that core. The road to entrepreneurial success contains plenty of walls, will you stop or keep running?

Entrepreneurs Give Back

I’m sure there is some research on this topic already, but successful entrepreneurs continue to impress me with their record of giving back. I’m not saying that “old money” doesn’t carry a large charity load, but newly created wealth by entrepreneurs seems to fund the big checks recently and I’m not just talking about the Gates of the world.

The H. Lee Moffitt Cancer Center & Research Institute recently announced a $20.4M gift for research towards the treatment of melanoma. The donor, a cable, banking and construction entrepreneur named Donald A. Adam.

That donation comes only a few years after entrepreneur, Don Wallace, donated $5M to Moffitt’s Comprehensive Cancer Program. The same thing is happening at UF, other Florida universities and on campuses across the US — entrepreneurs are funding university buildings and research. Maybe that’s one reason some of the largest and most successful university foundations in the world embrace the venture capital asset class — you reap what you sow.

Fun LP Meeting

Inflexion had our Limited Partner (LP) Meeting tonight and it was a good one. Hearing all of our entrepreneurs share their stories reminded me how much I enjoy building companies with these visionaries and how much I appreciate the LPs who make it all possible.

Onward and upward…

Splitting the Pie: Looking Forward or Back

A common issue every entrepreneur faces is how to split the equity pie early-on. A recent founder discussion reminded me of my first company and the pie-splitting process — it wasn’t pretty. Our process incorporated elements of:

  • who created the founding idea
  • who had seed funds to invest
  • who had time/effort to invest
  • who had networks/relationships to invest
  • what are expected ongoing roles (e.g. CEO, silent founder etc.)

The result was a roughly equal split among 5 co-founders (surprise!), with some minor re-allocations as everyone’s contribution became clearer in those first few months. Although it worked mathematically, the process could have been better and some of those early decisions were a sore-spot for years to come.

This topic could support multiple posts on the various trade-offs, but for now I wanted to share how investors and founders often differ in their focus. Specifically, founders place greater weight on past contribution and investors place greater weight on future contribution. Having been on both sides of the table, I understand why this happens, but it still surprises me when it comes up.

Why do entrepreneurs place so much weight on past contribution?
Because they are the ones who have invested their whole life into the business. They want to be rewarded for that investment. They see clearly that the business wouldn’t be where it is — poised to create more value — but for their early commitment. Past contributions are also already in the record books, not some uncertain measure of future value.

Why do investors place so much weight on future contribution?
Because investors are measured/rewarded only on creating future value. As such, every decision about stock/option grants etc. is measured against whether the shareholder value created will exceed the dilution of that grant. Of course, investors have to acknowledge past contribution to maintain harmony and ongoing commitment, but that isn’t the driver of their equity decisions. Investors also see a difference between number of shares and value of shares — whereby, the growing value of shares rewards past contributions instead of the need for additional shares.

Who is right?
They both are to a degree. In fact, the entrepreneur carriers a bit of both viewpoints because they are both founder and shareholder. I can make the argument for both sides, but the important part is just understanding the different perspectives. Doing so will help with investor discussions, but could also help with early founder pie-splitting.

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