Upcoming Events (May 2015)

SBEC Pitch Night

Tuesday, May 19, 6:00pm to 8:00pm
Buffalo Fire Department
1261 Cabrillo Ave #100, Torrance
Learn More

 

Torrance State of Education

May 28, 12:00pm to 1:30pm
DoubleTree by Hilton
21333 Hawthorne Blvd, Torrance
Learn More

 

PortTech Pitch: Meet the Angels

Boardwalk Cafe, Ports O’Call Waterfront
Berth 77, Nagoya Way, San Pedro
May 20, 2015, 4:30pm to 7:30pm
Learn More

 

National Association of Women Business Owners – Los Angeles

Leadership & Legacy Awards Luncheon
Friday, June 5, 2015, 11:00am to 4:00pm
JW Marriott LA Live
900 W Olympic Blvd., Los Angeles
Learn More

 

Friends of the SBEC Luncheon

Tuesday, June 9 11:30am to 1:30pm
Buffalo Fire Department
1261 Cabrillo Ave #100, Torrance
Learn More

SBEC Pitch Night: May 19, 2015

Join SBEC and exciting startup companies on Tuesday, May 19, 2015, from 6:00 PM to 8:00 PM. The event will be held at the offices of SBEC (1215 El Prado Ave, Torrance, CA). Please note the change of venue.

Watch exciting Los Angeles and South Bay startups pitch their companies to Venture Capitalists and angel investors.

If you are interested in pitching your company, please contact SBEC as soon as possible.

SPACE IS LIMITED AND NO WALK-INS WILL BE ACCEPTED. DO NOT MISS THIS OPPORTUNITY!

Incubators & Accelerators welcome to attend!

 

RSVP to attend.

Growth Capital Expo 2015

GROWTH CAPITAL EXPO 2015

Sunday-Tuesday, April 12-14, 2015
Caesars Palace Resort | Las Vegas, Nevada

The Growth Capital Expo brings together the best ideas, the most promising companies and the top deal makers in emerging growth finance for three days of education, networking and deal making in the nation’s premier destination for meetings and entertainment.

INFORMATION/REGISTRATION

Mark Hiraide: California To Tackle Equity Crowdfunding

This month, the Assembly Committee on Banking and Finance will hear AB 722 (Perea), a bill I drafted for Small Business California that will legalize equity crowdfunding in California.

AB 722 allows entrepreneurs to raise capital by selling equity stakes in their companies to the public. The process will feel similar to the crowdfunding going on now that you may have heard about where companies raise capital through large numbers of small donations on Internet sites like Kickstarter and Indiegogo in exchange for T-shirts, first-dibs on products, and movie production credits.

But AB 722 crowdfunding will be different because investors will own a piece of the company, which automatically introduces securities law into the equation.

Crowdfunding of equity will enable entrepreneurs to use modern communication technology to solicit directly large numbers of prospective investors on social networks and, more broadly, on the Internet, thereby “democratizing” access to capital. For most on Main Street, it will be their first opportunity to invest in and potentially realize returns from an asset-class historically accessible only by professional venture capital investors.

Yes, without the promotional efforts of intermediaries such as Wall Street investment bankers and underwriters, entrepreneurs may only be able to raise a few hundred thousand dollars. But today, with technological advances in computer programming, a few hundred thousand dollars is sufficient to prove-out concepts, produce prototypes and get the attention of Angel-investors and other capital sources that are capable of making much larger investments.

Equity crowdfunding was supposed to be legalized at the federal level with enactment in 2012 of the Jumpstart Our Business Startups (JOBS) Act. Prior to the JOBS Act, Depression-era laws restricted a businesses’ ability to solicit the public to raise capital without registering the offering with the then-newly created federal agency, the Securities and Exchange Commission. For 90 years, without registration, companies could only solicit investment from people with whom they had pre-existing relationships.

The JOBS Act was meant to change those rules. Unfortunately, balancing capital access with investor protection is not easy. The SEC has yet to issue final rules for crowdfunding under the JOBS Act (its present rules limit crowdfunding to high net worth (over $1 million) investors). In response to this delay, and in an effort to stimulate job creation, 18 states have rushed to enact their own intrastate crowdfunding laws. While well-intentioned, these laws do not adequately protect investors. With the exception of Maine, these states allow companies to raise capital directly from large numbers of unsophisticated investors without any review by the state securities regulators or by the SEC.

Given the relatively small sums of capital at stake in a crowdfunded offering, most entrepreneurs will treat equity crowdfunding as they do non-equity crowdfunding…they will not likely seek legal counsel or other professional advice about the detailed and transparent disclosures that are required to be made to investors in securities offerings.

Assemblymember Perea’s AB 722 contains several important investor protections, such as prohibiting unsolicited telephone calls to potential investors. But perhaps most importantly, AB 722 offers entrepreneurs the benefit of a review of their offering by state Department of Business Oversight attorneys who are experienced in securities law disclosures and the securities raising process.

This is an area where DBO involvement in the regulatory regime makes good sense. We are confident AB 722 represents a smart approach to capital access that will benefit entrepreneurs, the investing public and California’s economy.

Expert Panel on “Sustainability 3.0”

Vans Shoes, SONY, FoodlogiQ, and Clean Energy Fuels — Expert Panel on “Sustainability 3.0”
Thursday, April 9
2:40-5:30 PM
Toyota Automobile Museum in Torrance, CA

Experts from SONY, VANS Shoes, Clean Energy Fuels, & FoodLogiQ on Sustainability, Thursday April 9 at Toyota Automobile Museum–and folks will be there to answer questions about the history behind the cars.

Five leaders from leading edge companies will explain what they are doing to build a more sustainable and resilient supply chain and answer your questions. Toyota is also sponsoring a first class networking reception including great appetizers, wine, beer and other beverages. All at the renowned Toyota Automobile Museum in Torrance, CA. A guide will lead you around the museum and explain how Toyota overcame many challenges to grow from a near-bankrupt small company in the early 1950s to the number 1 and most respected auto maker on the planet.

See more here

Learn About Increasing Government Contracting Opportunities

The U.S. Small Business Administration (SBA) Los Angeles District Office will be conducting a FREE 8(a) & HUBZone workshop.

SBA invites you to learn about how to increase government contracting opportunities through 8(a) and HUBZone certifications.

8(a) Business Development Program helps small disadvantaged businesses compete in the American economy and access the federal procurement market. Participants in the program can receive sole source contracts up to $4 million for goods and services and $6.5 million for manufacturing. The federal government has a goal of awarding 5% of all dollars for federal prime contracts to 8(a) firms.

SBA’s HUBZone program helps small businesses in urban and rural communities gain preferential access to federal procurement opportunities with 10% price evaluation preference in full and open contract competitions, as well as subcontracting opportunities. The federal government has a goal of awarding 3% of all dollars for federal prime contracts to HUBZone-certified small businesses.

Thursday, April 16, 2015 from 9:00am–11:30 a.m.

SBA Los Angeles District Office
330 N. Brand Blvd., Ste. 1200
Glendale, CA 91203

Parking garage is $9 for the day. Street Parking is also available.

Registration is required to attend this event.

Register here with the following information:

Name of attendee
Business name, address and phone number
Email address
Number of years in business
Once registered, you will receive confirmation for attendance.

No walk-ins. Class space is limited.

Joe Platnick: Angel Funding Process -What Every Entrepreneur Should Know

Recently, a company founder asked me about what kinds of things entrepreneurs have done and should do to increase the odds of getting funded. A few years ago John Isaacson, past Chairman of the Pasadena Angels, did a presentation on “How to impress an Angel and get your company funded.” This presentation provided a comprehensive overview of the common denominators, both good and bad, that we’ve seen from companies pitching the Pasadena Angels over the past 12 years. For John’s talk, he divided the presentation into the following topics:

– What Every Entrepreneur Should Know
– What We Look For
– Investment Criteria and Cheat Sheet
– Getting Inside the Mind of the Angel
– Top Deal Killers

For this post I’ll address what every entrepreneur should know and provide some additional granularity to John’s main points on this topic:

1. Having a good idea is not enough
Every so often we come across an entrepreneur who believes they’re investment worthy based on how bright they are or because they came up with a good idea that was well articulated in a 2-page summary. Along with the funding criteria on our website, there are two other things we look for in companies: (1) a prototype or proof-of-concept that validates the company really can deliver on its idea; (2) the “plan” behind the plan, which I’ll address in a later post and covers how you’ll execute once you’re funded

2. Raising capital requires both time and money
Periodically we’re impressed by an entrepreneur that has left a well paying job so they could devote all of their time to their startup. To financially support their new venture, they will often take a second mortgage on their house and max out all their credit cards. The net impression when we see this is that he/she really believes in themselves and their business and have some serious ‘skin’ in the game. At the other extreme we’ve seen people who keep their day jobs, devote a few hours per week to their fledgling business and have invested only a few hundred dollars of their own money. Although you don’t have to follow the first scenario to secure funding, you should make sure that at a minimum you’re at least half-way between the two.

The two key points on this topic are you’ll need to invest sufficient time and money into your business to get to the point where a prospective investor will be interested. Secondly, the process of raising money will invariably be the hardest part in a startup—which also translates into time and $$$$$.

3. You can save time and money if you understand the investment process
Although this is stating the obvious, you’d be amazed at how many companies don’t take the time to do this.

4. Identify and contact prospective investors whose investment criteria match your situation
Once again, it’s pretty intuitive. One added benefit of doing this is that this research may also help you discover things about the investor that you can use to get your company noticed.

5. It’s like college…you’ll be graded on a curve
Back when I was in college I was surrounded by a lot of very bright people. As if the situation wasn’t challenging enough, my class grades were often determined by how I did relative to them (and the class average), and not on an absolute scale. Raising money is somewhat like that, because investors make only a limited number of investments. For the Pasadena Angels, it’s typically 12-15 per year. Although your company may be great on an absolute scale, the chances of getting funded will go down if an investor is simultaneously considering more investment worthy (i.e., stage, market, team, exit, etc.) companies. Historically, there’ve been many good, potentially fundable companies we’ve had to forego because of this.

6. Don’t stop till it’s done
At times we’ve watched entrepreneurs reduce the amount of time and energy they invest in the fundraising process after hitting a milestone along the way—but before actually having the money in the bank. The most common time that we’ve seen them ease up has been after receiving the term sheet and investment agreements. The amount of time and enthusiasm that you expend during the latter stages should be the same as when you’re first pitching. Remember, don’t stop until all of the money has closed and it’s in the bank.

Joe Platnick: SBEC Mentor

Joe Platnick
General Partner
Pan-Pacific Capital Ltd

Martha Spelman: Always Be Marketing

If anybody knows anything about marketing, it is Martha Spelman. As a successful marketing consultant, author and entrepreneur, Martha knows exactly what she is talking about. Here are her words on marketing for businesses to keep in mind:

For any business, it is imperative to ALWAYS BE MARKETING. Market when you’re not busy but especially when you are…because inevitably, the calm comes after the storm.

We’ve all heard the line: “I really don’t market – my work comes from referrals.”
Three times in the last week, I’ve had meetings in which the business owner said, “My company used to survive on ‘word-of-mouth’ and now, that’s not happening.” Friends of friends, client referrals or industry colleagues — used to fuel their work pipeline. The business owners I spoke with weren’t executing an active marketing strategy but still the phone rang; somebody always knocked on their door.
Apparently that is no longer the case. The referrals have stopped. And with no other marketing plan in place, the well is running dry.
There are several reasons that your referrals might have slowed down or stopped (aside from your work or product quality heading severely downhill…which is doubtful):
1) The economy is down and your previous referral sources aren’t getting work or coming in contact with potential clients to send your way

Click Here to Read Full Post

Martha Spelman: SBEC Mentor

Martha Spelman
Marketing Consultant
Co-Founder Newzful -subscription-based site that provides useful facts, stats and data for content marketing
Author of The Cure for Blogophobia: How to Create, Publish and Promote Your Business Blog

Philip de Souza: Scalability

Scalability is no doubt one of the most important aspects that a business should always keep in mind. Who better to ask than Philip de Souza? Experienced in the areas of corporate strategy and go-to-market strategy, Philip has some key insights that any company dealing with scalability can learn from.

SBEC: What would you say to an entrepreneur who is about to experience company growth due to an increased success in their company?
Philip: It is harder to manage growth than a slowdown. Entrepreneurs naturally gravitate to the issue that demands their attention the most, and during periods of rapid growth that could be everything from HR, to manufacturing and inventory.
Entrepreneurs must learn to delegate so they can keep their 30,000 foot vision, ensuring scalability, repetitive process and focus. That’s the short answer. Every entrepreneur should read “The E Myth” to learn more about this.

SBEC: How should they prepare to adjust their company?
Philip: This is industry and company specific, what adjustments are needed? With some ground word, proper staffing and good processes, the only issue left to deal with is scale.
The question of adjustment is a hard one to answer without know more about the business. There is a thin line between “If it ain’t broke….” Frequent adjusts blowing things!

Overall Philip is a firm believer in the following:

1. Implement processes and create a “Franchise model” in all functional areas of your business
2. Measure, measure measure – this goes for budgets, goals, growth, etc
3. Stay aligned – focus on your core business, know what it is, have the entire team know what it is, have a SMAC
– Read Good to Great Jim Collins

Hope that everyone found this helpful! As always, please feel free to leave any comments below!

Fred Haney: Is Your Product Really Better?

Have you ever wondered what venture capitalist looks for in a startup? Or what is going through an investor’s mind during a pitch deck presentation? Continue reading if you want to find out! The SBEC is lucky enough to have Fred Haney as one of our mentors. He is a venture capital fund manager, private investor and entrepreneur with ample experience. As the founder of Monday Club, he regularly listens to pitches from hopeful entrepreneurs.

Here is what Fred has to say:
One mistake a lot of presenters make is to simply say their product/service is simply ‘better’ than existing competition. Of course it is, but that doesn’t really answer the question an investor is asking. An investor wants to know, “How much ‘better’ is it? Is it ‘enough better’ to prompt a customer to buy it?” And, “How do we know that it will be “enough better” in five years, or so, when we want to sell the company?”

The concept of ‘enough better’ is important. It forces the presenter to define and quantify what it means by ‘better.’ And it forces the presenter to confront the question, “How much better does a product need to be in order to compel customers to buy it?” Usually, ‘incremental improvement’ is not enough to force people to purchase. Products generally need to be 50% or 100% ‘better’ in order to get someone’s attention, and their advantage needs to be ‘sustainable’ over a long period of time.

As always, the SBEC is thankful to have such seasoned mentors on board that support entrepreneurship. Let us know your thoughts on Fred’s words in the comments!

Fred Haney: SBEC Mentor

Fred Haney
Owner, Venture Management