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Green Mart?

May 30, 2008

Wal-Mart often gets beat up over squeezing their suppliers and not being environmentally friendly enough. A blurb in Fortune highlights how this can be a misconception. Wal-Mart worked with General Mills to shrink the size of its’ cereal boxes. (No more empty space) This cuts costs for the supplier and allows the savings to be passed on to Wal-Mart and its’ customers, but as important this saved 445 tons of paper and eliminated 500 truck trips to supply Wal-Mart. Being “green” can be good business but In too many cases the facts surrounding a company are ignored because it doesn’t fit with pre-conceived notions or gets in the way of a good story or political agenda.

Written by Richard Stump · Filed Under Blog, Politics |  

STudent entrepreneurs

May 29, 2008

Yesterday I attended the Lexington Venture club. The presenters were student entrepreneur teams from the University of Kentucky. They were vying for small cash prizes. The three teams were:

Virtual GPS Tour Guide: (the winner) this is a PDA/smartphone based software program that would guide visitors around a university campus using GPS enabled maps. The software would allow you to pick the buildings/areas of campus that you would like to see and then will provide a walking route on sidewalks that will take to each of those areas and then back to the area with which you started. Future functionality will include voice commands, data on the buildings/areas with which you are interested, etc.  It also has application for parks, museums, visitor’s bureau’s etc.

UK Bar & Grill: This team wants to build a theme restaurant based on the university of Kentucky wildcats with a bar area, gift shop etc. Think hard rock café except for wildcat fans.  The future plans are to roll out theme restaurants throughout the country in college towns with rabid fans.

Healthy Kids: An after school, program for obese kids. The kids are assigned a health coach and then are taught healthy eating habits and put through a series of fun exercise activities. The centers would have classroom space, an activities area and a kid sized gym. The future plan is to roll out as a national franchise.

In addition two graduate students gave elevator pitches on their projects:

Klute-Johnson Industries: Industrial R&D firm, developed modular helicortal reluctance motor for use in industrial motors

Video game consortium:  founded by six grad students, this group is working to develop MMORPG  games with deeper game play mechanics.

Written by Richard Stump · Filed Under Blog, Venture Capital |  

Profile: Biological Prospects

May 28, 2008

One of the interesting start-ups I have worked with in the past is Biological Prospects, founded by Patrick Lawless.  I asked him a few questions about his company and being an entrepreneur in Kentucky.

 1) Tell me about Biological prospects?

Biological Prospects develops and markets plant-based nutraceuticals and supplements for the equine and companion animal markets.  We recently have completed formulation of the first two supplements in our equine product line, which includes an anti-inflammatory supplement and a general health supplement.  These products will be commercially available in July of 2008.   After the introduction of our equine product line, the company will begin focusing on formulation and development of canine supplements.

  • 2) Why nutraceuticals?

The company has focused on nutraceuticals and supplements for several reasons.  First, the cost of healthcare for humans and their animals has been increasing at a phenomenal rate, particularly in the United States.    It now is well-recognized by the medical community and the general public that the most effective form of healthcare is one that targets disease and illness prevention, rather than treatment of the symptoms associated with disease and illness .   The link between nutrition and physical and mental health status is well-established.  Contemporary research has provided us with a wealth of information concerning the therapeutic potential of various foods and botanical products (e.g. non-pharmaceutical alternative medicines).   This scenario has led to burgeoning global demand for plant-based nutraceuticals and supplements.   We are concentrating on the equine and companion animal nutraceuticals markets, because we believe horse and companion animal owners will adopt a strategy of preventative healthcare for both themselves and their animals.

  • 3) What got you started down the road to entrepreneurship?

Prior to the formation of Biological Prospects, I was employed as a botanist with a local plant-based drug discovery company.  I became increasingly frustrated with the amount of time and money required to bring pharmaceuticals to market.  As a result of my education and professional experience, I was keenly aware that (1) plants have long been the primary source of treatments for various illnesses and diseases, and (2) many species have safely and effectively been used for centuries without modern clinical trials.  Therefore, I set out to use my knowledge of the medicinal qualities of plants to bring to market safe, effective plant-based nutraceuticals and supplements.    

  • 4) What about Kentucky has been a positive for starting your company?

The two factors that have aided us most in our startup are (1) the strength of the equine industry in the Bluegrass Region of Kentucky, and (2) the excellent guidance of Gordon Garrett from the Kentucky Small Business Development Center

Written by Richard Stump · Filed Under Blog, Startups |  

The Anti-Portfolio

May 27, 2008

Bessemer venture partners posts what they call their anti-portfolio on their website. Basically it is a list of successful companies they passed on investing in. My favorite:

eBay
“Stamps? Coins? Comic books? You’ve GOT to be kidding,” thought Cowan. “No-brainer pass.”

A lesson for both investors and entrepreneurs.

Written by Richard Stump · Filed Under Blog, Venture Capital |  

Oil as a Utility?

May 22, 2008

Oil Prices

 I am not often for government regulation or fooling around with markets but I think a case can be made for regulating the Oil & Gasoline industry as a utility in this country. 

Written by Richard Stump · Filed Under Blog, Politics |  

Enterprise Angels

May 21, 2008

Wes Cobb with Enterprise Corp has spearheaded the efforts to form a new angel group in Louisville. Kentucky Startups gets the lowdown from Wes:

Q: What spurred the formation of the Enterprise Angels?

A: The group came about as the result of several factors. The idea was first proposed by the Mayors office, which recognized how important a functioning angel group is to a city’s entrepreneurial community. Before groups like the Enterprise Angels, companies seeking angel money in Louisville either had to spend a lot of time just trying to get connected with the 2-4 person pockets of angels around town, or they had to take their deal out of town (to Queen City Angels in Cincinnati or Bluegrass Angels in Lexington), meaning that the wealth created by those deals (when they matured) stayed in Lexington or Cincy. The Mayor’s office recognized that the angel process is often very cyclical - entrepreneur starts company, sells company, gets rich, then becomes an angel investor himself - and sought to capitalize on the potentially exponential growth an angel group might bring. Within the Enterprise Corp (the branch of Greater Louisville Inc that focuses on developing the fast-growth entrepreneurial sector) we immediately recognized the benefits of an organized angel group. Not only would we probably get more deals funded, but we’d also save ourselves a ton of trouble by having all the angels in one place, rather than connecting the entrepreneur to each individual network of angels. From there, we did some research on other angel groups, came up with a loose framework, and started getting feedback from potential angels.

Q: How many members in the group?

A: The group currently has about 30 individual members, and we’re actively recruiting a few more. We bring around 20 to any given meeting; I think we’d like to get that number to 25.

Q: Any relationship with the existing Louisville Angels group?

A:The Enterprise Corp has worked with Tom McMahon and Growth Services many times in the past, so when we heard that Tom was going to start an angel group as well, we were elated. From our perspective, more deals getting done here in Louisville is great. Since both groups were formed at roughly the same time, we were able to share ideas, and now, thanks to Angelsoft (a wonderful tool for angel group management), we’ve been able to share a number of deals with the Louisville Angel Network. As a matter of fact, one of the companies that is presenting at the Enterprise Angels this month was referred to us by Tom’s group.

Q:Tell us about the type of deal the group is looking for,size,industry any other pertinent info.

A:The group has no real firm specifications on deals, and the choice of who presents to the group is ultimately up to the angels and to the Enterprise Corp. However, there are several things that make a deal more appealing. For one, we like to do deals in syndication with other angel groups or investment entities (this saves us some legwork on the diligence side). Another thing we like to see before a deal presents to the group is a strong internal champion: an angel who will stand up in front of the group and give his support (and money) to the company. We’ve found that a champion makes a deal much more appealing to the other angels in the group.

 

Written by Richard Stump · Filed Under Blog, Venture Capital |  

A little PR

May 19, 2008

Like any new venture, we at kentuckystartups look for opportunities to gain some exposure.� Thanks to those at Business Lexingtonfor�the love.� Promoting startups in Kentucky

Written by Richard Stump · Filed Under Blog, Personal |  

How to attack #1

May 19, 2008

Colorado startups has a great post from David Cohen and Brad Feld on strategy for attacking the market leader when your number 2:

Things that work when you�re #2

1. Make a big deal about stupid things to distract #1 to make #1 spend time on them.
2. Go hard after areas that #1 isn�t (yet) dominant in. Make yourself very relevant in areas where #1 isn�t yet playing.
3. Increase transparency in areas where you know #1 is weak.
4. Develop a reputation for pleasing customers more than #1.
5. Don�t just follow #1, provide real innovation/market leadership and behave as if you were already #1.
6. ignore #3, #4, and #5, et al - don�t take their bait

They go on to give a few tips to number one.� These are excellent tips really for any company trying to maintain their growth and relevancy in a market space.

Written by Richard Stump · Filed Under Blog, Startups |  

Funding window open

May 12, 2008

The Kentucky Enterprise fund, a grant funding source for high technology start-ups in KY, is now open for their summer funding round.  The application for the series of grant programs opens today and closes June 12th. The grant programs have different requirements depending on your location in Kentucky and your industry.

Written by Richard Stump · Filed Under Blog, Venture Capital |  

Spend like you don’t have it

May 11, 2008

I recently received an update on a start-up who had a unique business, solid business model and had been “rewarded” with several million in venture funding last year.  This was enough money to provide them the runway to profitability.  The update was that they were down to only 3-4 months cash.  The mistake…

They spent like they had millions in the bank.  They loaded up on fixed expenses including a building, top infrastructure and expensive marketing.  The reason I tell this tale is because for years I have advised start-ups of the importance of budgeting and financial projections.  This unsexy area often gets short shrift. While projecting revenue is a guess at best, expenses are fairly straightforward. My advice is even when things go better than expected or you raise enough money to last till positive cash-flow, you should spend like you don’t have it, stick to your plan, keep as many expenses variable as possible and manage cash like your life depends on it…because your start-up’s life does depend on it.

Written by Richard Stump · Filed Under Blog, Startups |  

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