|In this issue of the Catalyst:
Note from the President
At BizStarts Milwaukee, we believe the often quoted advice: “The best way to create the future is to invent it.”
Faced with an economically distressed region, BizStarts Milwaukee is doing its part to create an innovation economy by facilitating the starting of new companies. We’re tracking our metrics.
Recent developments that will help us achieve our goal include:
- Our new Executive Director Eric Paulsen has hit the ground running. He’s hired new staff, which includes Fred Brooks a seasoned and capable CEO to help mentor and assist new entrepreneurs to succeed.
- He’s working with our staff to significantly expand our entrepreneur databases by developing new outreach strategies, including proactive contact with newly-incorporated companies in the region, development of a QR code for easy data sharing and partnering with other organizations for future events.
- We’re locating part of our operations within the new Spreenkler Talent Lab in the Grand Avenue to help support their software incubator and serve entrepreneurs in that creative development space.
- We have increased the number of Ugly Baby Panels, which serve as a great opportunity for new entrepreneurs to showcase their businesses and receive feedback. Workshops in the Venture Track program are focusing on the nuances and specific challenges facing entrepreneurs over and above the typical – topics like board development, investor negotiations and even exit strategies are all part of the mix.
- The Greater Milwaukee Foundation has awarded BizStarts Milwaukee a $50,000 grant to be paid over two years.
- In August the Board of Directors, which has been significantly expanded to include prominent entrepreneurs, will explore additional ways to expand the reach of BizStarts. We will be inviting resources from the highly successful Jump Starts Ohio to learn from the best.
In photo: Bartolotta Restaurants’ Owner Joe Bartolotta, and John Wise, Director of Operations with The Bartolotta Restaurants, check out meat cutters at the 2011 National Restaurant Association Show for the company’s new gastropub, The Rumpus Room, opening in Fall 2011.
Milwaukee restaurateur Joe Bartolotta plans new venture with nod to family’s past
Bartolotta Restaurants’ founder Joe Bartolotta recalls fond memories of his father’s tavern with its lively gatherings, vinyl records playing music of the day and an energetic atmosphere that embraced everyone in the community throughout the mid-1950s and early 1960s. An opportunity to re-create that welcoming experience presented itself with the purchase of restaurant space located at 1030 N. Water Street near the Marcus Center and the Bradley Center.
Construction is underway for The Bartolotta Restaurants’ newest concept, The Rumpus Room, a gastropub that will combine unique flavors, an expansive selection of craft beers and a casual atmosphere.
Gastropubs have become increasingly popular across the country with their combination of reasonably priced quality food in a comfortable bar environment. As a new venture for the restaurant group, a critical focus will be placed on the tasteful casual dining options, unique beer and cocktail offerings, hospitable atmosphere and entertainment. The group will lean on the experience of a few of their current distinguished chefs. Under the direction of Paul Bartolotta and Corporate Chef Adam Siegel, Bacchus’ Chef de Cuisine, Andrew Ruiz, will take the role as Executive Chef of The Rumpus Room, opening Fall 2011. With both casual and fine dining experience including duties at Ristorante Bartolotta in Wauwatosa, Ruiz brings his ability to create unique pub fare with diverse flavors.
The new pub’s name, The Rumpus Room, was inspired by the tavern Joe’s father established. As the name implies, it aspires to be a place where people come together for entertainment, fun, camaraderie and recreation. Combining these elements in a casual setting with delicious food pays tribute to a man who made an incredible impact on the Bartolotta organization and the community.
Follow The Rumpus Room progress and news at www.rumpusroommke.com, on Twitter and Facebook.
Jennifer Bartolotta of the Bartolotta Restaurant Group serves on the BizStarts Milwaukee Board of Directors and they’re starting another new “Biz” of their own and we wanted to share it !Ask an Entrepreneur
By, Fred Brooks of BizStarts MilwaukeeWelcome to Ask an Entrepreneur, a new feature of the BizStarts Catalyst! As you know, BizStarts Milwaukee helps entrepreneurs launch and grow their companies to help create new jobs and wealth in Southeastern Wisconsin. As the Director of Entrepreneurial Services, my objective is to help you figure out how you can establish a solid foundation upon which you can launch and grow your company.
Whether you’re in need of our Venture Track services, connections to investors or simply to be pointed in the right direction, we can help. I learned plenty about small business management and entrepreneurship over 45+ years of starting, running, falling down, getting back up, and constantly trudging forward while growing 9 entrepreneurial businesses over these years.
Since selling my last business 3.5 years ago, I have been an Adjunct Professor at Carroll University teaching small business management and entrepreneurship. During my first few months at BizStarts, I have met many new entrepreneurs who have questions about their start-ups. We will devote this column in The Catalyst to answer your entrepreneurial questions. Here are two common questions I am often asked:Q: What is the difference between an Inventor and an Entrepreneur?
A: Good question, and one that often creates frustration!
There are many “inventors” out there, some I would even call “professional” inventors; they are very creative and can come up with ideas, inventions, and unique ways to solve problems. Many go so far as to apply for patents on their inventions, often before they know if there is a market for their concept.
Yet when most “Inventors” are asked if they…
- have performed market research on their invention to establish market need, value, or pre-existence of their idea;
- developed at least an initial plan to start a business around their invention; or
- are willing to invest the time in writing a business plan or thinking about a possible business management team,
Therein lies the difference. Inventors create things. Entrepreneurs create companies. An “Entrepreneur” not only generates creative ideas, he or she also has the passion, desire, drive, vision and where-with-all to do what it takes to fully develop ideas into a venture that can fulfill a market need! BizStarts is here to help these entrepreneurs “navigate the waters” and find ways to help them commercialize their ideas. We can also help guide most inventors in finding entrepreneurs or entrepreneurial businesses that already exist, and that are looking for well thought out ideas.Q: Do you ever outgrow the need for a business plan?
A: Simply put, ”NO”! Why? Two major reasons: One, any potential source of money, be it a family member, friend, banker, venture capitalist, angel investor, etc. will want to see your business plan. They want to know that you have really considered all aspects of what you plan to do with any money they provide to your business over the next few years. Two, you need something that will force you to focus on what will be required to make your venture concept a success in the future… and that is writing your “Business Plan”! Furthermore, don’t think that business planning is a one-time event; you need to update your business plan annually; even more often if there have been major events that change the course of your business. BizStarts can help you find a way to write a solid business plan. Give us a call!
We would like to see that you get answers to your specific entrepreneurial questions. The most common questions will be published in future “Ask the Entrepreneur” columns of The Catalyst.
Venture Track Update
Our most recent Ugly Baby Panel was held June 23 at Godfrey & Kahn. Two companies presented to a cadre of talented Venture Track Advisors. First up to make
the pitch was Steve Hushek, founder of MedTrak, LLC. The company produces a surgical system for use in hospitals. MedTrak’s pitch generated a lot of comments from the group. In a follow-up email to Venture Track, Hushek wrote that his experience with the Ugly Baby panel was time well spent.
“My ‘Ugly Baby’ presentation was invaluable. The questions asked by the panel showed me the areas of most interest to prospective investors, as well as highlighted the areas where my assumptions were poorly stated. It was time very well spent.”
The second presenter of the evening was Glo-Pro Lures, founded by Patrick McManigal. The company also received a lot of feedback. Glo-Pro Lures produces an innovative product line for fisherman, which uses the science of light, among other things, to improve your chances of catching more fish. When asked to comment on his experience McManigal shared the following.
“It was great meeting everyone and I learned a lot. It is just crazy for me to get my head around the idea that we need an exit plan before we even make one lure.”
Ann Hanna, a Venture Track advisor and BizStarts Milwaukee board member who participated at the event, applauded the presenters for their willingness to present cherished ideas for feedback.
“These entrepreneurs enter a process where their baby is bared, warts and all. Their ideas are questioned and challenged with the purpose of producing an end product which is viable and exciting to an outside investor,” Hanna said.
Q&A with Venture Capitalist Peter Zaballos
Peter Zaballos, an experienced Venture Capitalist and entrepreneur, was the featured speaker at the Venture Track CEO Roundtable lunch held last month at Innovation Park. Zaballos has been a member of three successful startups (either went public or were acquired) in Silicon Valley, Seattle, and Boston. He is currently Vice President of Product at Studyblue.com
, a startup based in Madison, WI. He generously shared his tips and fielded questions from Venture Track entrepreneurs.
Below is a recap.
Q. What is a typical day in the life of a VC?
A. VC is all about making productive use of your professional relationships. I spend much of my time meeting with companies largely on an informal basis, and researching companies I’m taking a close look at. Some of this research is simply talking to people I know who have experienced points of view, but a great deal is doing my investigations ranging from talking to potential customers of the firm or just digging into market research.
At our firm, and at a lot of the VC firms we invested with, the partners do their own research and do not, usually, have an analyst.
I also spend time out at events, networking in the entrepreneurial ecosystem
Be vigilant about staying in touch with your VC prospects and let them know you’d like to update them about where you are in the development of your business. Set expecations about what you plan to do with the business, and review your progress against those expectations. This is a great way for you and your VC contacts to understand how each of you think about business, and how you communicate.
But be aware that as soon as you say: “I am fundraising”, everything in that informal relationship changes. There’s a much more deliberate process that kicks in, which leads down the path of Yes, or No.
Suggestion: Get informed about how VCs and VC funds work. If you’re fundraising (rather than informally checking in), then ask them to describe their investment-decision process. If you’ve already had a meeting with them about fundraising, when you check back, don’t be afraid to ask where the VC is in that decision process. Your time is valuable and you should not feel shy about protecting it. The good news is, BizStarts Milwaukee’s Venture Track program can help you understand and prepare for this process.
Q. At what stage should a company pursue Angel funding or VC funding?
A. The line between Angels and VC investors is more blurred these days. I define angels as funding anything up to $1 million, and VCs as $5-10 million. The cost to start a company has decreased so much—I think more and more there is a fuzzier boundary between Angels and VCs. Angels are filling a void of the shrinking VC base.
VCs do regard angel funding from family and friends as important, because it shows faith and credibility among those closest to you. Even before meeting with a VC, you should be able to determine if your idea is a fit with the fund’s investment strategy by taking a look at their portfolio of investments.
Suggestion: Before you meet, look at the VC’s portfolio page to see how well you fit their investment strategy, and if there are any specific partners who focus on areas like your business. You should also see if there’s a competitive investment. They, the VC, should also inform you of that as well.
Q. What are some red flags to VCs in a presentation?
A. Concerns about NDAs—VCs simply can’t and won’t sign them. This means you need to be fairly up front about how the business works and how it’s progressing, while also keeping an eye to how much information you disclose. Don’t overcorrect on either side of this. Not going into enough detail won’t give the VC enough information to know if there should be a next conversation, sharing everything is imprudent on your behalf.
Another red-flag is a long and/or unfocused presentation. You should be able to convey everything you need to in around 12 slides.
Suggestion: Presentations should focus on a crisp articulation of the problem and how your technology addresses it, supported by robust data. A few years ago, Guy Kawasaki wrote a great blog post about how to develop a succinct pitch deck. It can be found here: http://blog.guykawasaki.com
Q. Is your management team important? How so?
Yes. The management team is very important, it’s probably the most critical way for you and your investors to reduce risk, so you want people who have experience with the technology or have exposure to a similar type of business. People who have been through start-up cycles are important.
Investors are looking over the founder and team members and asking: “Is this someone who can make the contributions and pivots necessary to take the company from zero revenues to a revenue-generating company?”
“Is this someone who can execute what the plan promises?” The best predictor of the ability to execute is past performance. That’s what we are looking for.
Suggestion: Another way to improve the quality of your team is to establish an advisory board with experienced leaders in your field, or by adding an experienced executive to your board of directors. This also helps pave the way to getting meetings with VCs…one of the best ways to meet a VC is through a personal introduction. Your advisors and board are good sources for contacts.
For up-to-date information on BizStarts Milwaukee, be sure to visit the website: