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Welcome to The Upside Blog, a space dedicated to personal development and inspiration, written and edited by Anthony Price. Join the movement. The ‘Killer’ Pitch Master Slays the Competition  Precious L. Williams, CEO, Perfect Pitches by Precious Long before Precious L. Williams was known as the “Killer” Pitch Master, the CEO of Perfect Pitches by Precious, an accomplished professional speaker, and the author of three books, including her latest, “Pitching for Profit: The Bad Bitches’ Playbook to Convert Conversations into Currency,” she was fighting for her life. Precious will never forget November 18, 1991, as it is seared into her mind. A belt buckle, extension cord, and broom handle race though the air and crash down brutally on Precious’s naked twelve-year old body. Wham. Wham. Wham. The avalanche of blows is unwavering, and devastating. Her mother yells, “You’re ugly, you’re stupid, no man is ever going to want you!”—those words are meant to psychologically maim, like a soldier stepping on a hidden improvised explosive device (IED). Without warning, her mother and her sisters begin pummeling her body. After the assault, Precious is thrown out of the family house. Her naked and battered body is bleeding and in pain, but she walks two miles to her aunt’s house—to this day, she doesn’t know how she made it there. She is in charge—and doesn’t need your admiration to feel good about herself. You Are The Story Precious shared her story on a Butler talk, posted on YouTube in December 2021, titled “Your Flaws = Your Secret Weapon.” She spins inspirational gold, fighting back tears in a cracking voice, to remind the audience that they too, can overcome. Precious’s eyeglasses frame her inquisitive eyes. Her personality commands attention, as does her 5’-9” height. She’s wearing a red dress that stops four inches above her knees. The sleeves of the dress flow down her sides like a shawl, exposing her arms. Her hair is in a braided bun, resting at attention, high on her head. Her red dress stands out in contrast to the black curtain behind her. She is in charge—and doesn’t need your admiration to feel good about herself. If you combined the lyrical flow of the late Notorious BIG, add Oprah’s vision and her early days of television talk show hustle, with the wisdom of the average Black grandmother, you’d have Precious. In fact, she credits much of her success to her grandmother, who was the first one to realize that Precious had a gift for speaking. Precious says, “She loved me from the day I was born to the time she exited this earth. She is the reason I keep going.” Precious, a vibrant and energic 43, demonstrates grace and thankfulness. The woman has been to hell and back, from battling a nervous breakdown, to homelessness, to romantic heartbreak, feelings of abandonment, and an alcohol addiction. It’s not surprising that her go-to inspirational song is Cardi B’s “Get Up Ten,” with the line “Knock me down nine times, but I get up ten.” She revels in sharing her life experiences, and her resiliency. Education Is Her Stage Under the care of her grandparents in St Louis, Precious went from special education to the valedictorian of her graduating class on June 6, 1997, at Beaumont High School. She was Ms. Beaumont in 1996-1997—the queen of her high school. She loved school and earned stellar grades. She participated in the Scripps National Spelling Bee Competition, placing 7th. When she was 16 years old, she read a speech in front of the mayor of St. Louis that led to a standing ovation. That speech would be a defining moment in her life and lead to paid speeches, and a career using her voice and communications skills. When people told her she would not get into college, she proved them wrong. She received a full scholarship to Spellman College, one of the Historically Black Colleges & Universities (HBCUs) in Atlanta, where she majored in English, graduating in four years. She went to Georgetown Law on a scholarship, but was kicked out in 2002—which Precious openly shares with a mischievous laugh. Most people would feel shame, but not Precious. She revels in sharing her life experiences, and her resiliency. Precious earned a scholarship to Rutgers Law. But hard times were waiting for her. In 2004, she had a nervous breakdown while in law school and spent three months in the hospital. When she recovered, she returned to school to complete her law degree. Proving that no obstacle was too large to traverse, Precious passed the New York Bar Exam on her first try. After practicing law full time from 2008 to 2011, she realized it wasn’t for her. She started her company, Curvy Girlz Lingerie, an intimate apparel brand for “full-figured divas and plus-size fashionistas,” as she describes it. Precious knew that there was a market opportunity consisting of the 40 million women in the United States who are size 14 or larger. At the time, her bank account was overdrawn by $400. The lack of money did not deter her. “I’m going to find a way or make one,” she said—adversity glides off her like a fried egg in a Teflon-coated pan. To source capital, she entered 14 pitch competitions, and won 13 in a row, pocketing $150,000. This prize money was used to launch Curvy Girlz Lingerie. On her pitching journey, Precious won the 2013 Black Enterprise Pitch Competition, appeared on the MSNBC program, Your Business, the Elevator Pitch segment, and on season 8 of ABC’s Shark Tank—the pinnacle for aspiring entrepreneurs seeking capital. When Curvy Girlz Lingerie failed to take flight, her pitching prowess led her to start Perfect Pitches by Precious. Pitching would be at the center of this new business and her life. The thing I want people to understand about pitching is you do it every day, anyway. Be Authentic Thinking back, she remembers God telling her at five years old that she would be a star. Precious is not afraid to be herself because she likes who she has become. She calls herself a full-figured diva—but she is quick to say she didn’t grow up that way. “I was thin at one point.” She is all about embracing the flaws that make her unique. In business circles, pitching is no longer confined to entrepreneurs, and has become the acceptable way to give a succinct overview of a problem, and present your solution. Precious states, “I have found that pitching is the best way. And the way I know that is that I’m a 13-time national champion.” “A pitch is a short, brief way of introducing yourself, your book, your brand, your business [to people] who you are hoping to [be] your target market, so you can move forward with the sale,” says Precious. You want to entice them to learn more. With your pitch, you want to interrupt the typical boring pattern. “I lead with difference because I’m funny, engaging; I’ll say the kind of things that will make you clutch your pearls. My thing is shock and awe,” which helps her break through. “The thing I want people to understand about pitching is you do it every day, anyway. When you’re talking to your friends about that no good man or woman, when you’re talking about an opportunity that came your way, when you’re talking about a job, you’re pitching. You’re making yourself the focal point [of the discussion.]” While money helps in pitching, in the end, she says. relationships are worth more than cash. Precious refers to herself as the #killerpitchmaster and generously sprinkles her conversations with #slaythecompetition—hashtags are in vogue in the digital world. “I found a way to make myself stand out in a crowded marketplace. There are tons of speakers. You will never confuse me with Tony Robinson, Les Brown or Lisa Nichols.” The Future Precious’s goal is to be “The number one pitching, communication skills and speaker training company in the world.” She wants to help women turn difficult situations into powerful messages to fulfill their destiny. “I want to be remembered as the woman who went forward, who kept going no matter what, and who opened doors for other women; and then enabled them to do the same: open the door for their children to see beyond where they are, and to live their dreams, not the reality.” “I’m so happy that I lived to see things happen.” She never thought she would be on Shark Tank, quoted in the Wall Street Journal or do a Ted Talk. Precious says, “The things I get to do are crazy to me because no one but God thought I could.” With conviction, Precious states, “Fortune favors the bold. If you’re going to do something, do it with flair and finesse. Do it! Do it! Be your own Kanye (Ye, the artist formerly known as Kanye West). Don’t let life box you in. Be the creative director, designer, rapper, producer—he’s all over the place. But he’s in his zone.” If she could meet one celebrity, it would be Beyonce. Precious says, “I love her. I adore her. I want to sit down and chop it up with her, woman to woman.” In closing, she makes one last plea, “Make the most of your opportunities now. Make your impression now.” ### AuthorAnthony Price is an entrepreneur, writer and publisher of Mini Books, concise stories for people who are curious about the world. Able Made Founder Is Motivated By 'Victory' To Help Kids Suzanne McKenize, New York City/Photo Amy Lombard for Able Made Suzanne McKenize is the founder and CEO of Able Made, a brand dedicated to an active lifestyle and healthy living with proceeds supporting the Ucal McKenzie Breakaway Foundation. Anthony Price interviewed Suzanne over the telephone on November 11, 2021. This interview has been edited and condensed for clarity. What are you working on now? A big part of my work is sharing our heritage story and introducing consumers to the brand. We launched our pop-up retail experience in the Soho neighborhood in New York City during October. As an active lifestyle brand, we've done well with socks and accessories, I started Able Made to empower city-youth health through the foundation I founded. I'm thrilled about the work and its positive impact. What inspires you? Creativity inspires me and stories of resilience. Being an entrepreneur is not easy. One of the best pieces of advice I got from a fellow entrepreneur is, manage your emotions. One day you could have a great day and the next day could be full of a set of challenges with highs and lows. You have to be able to be steady, and don't get discouraged when things aren't going so well. Manage your emotions and celebrate your wins, but at the same time stay focused on the challenges ahead. There’s no stopping the future. What excites you about the future? For my team, we've been heads down since April repositioning the brand, which is going to start revealing itself in the coming weeks. The future entails a lot of hard work and the direct positive outcomes from our efforts. We started Able Made with many collaborations, and now the emphasis is on expressing our brand on its own. We're excited about what's next and how we will build the brand. If you could solve one problem, what would it be? I'm going to break the rules and give you two answers. First, I want to see the empowerment of our next set of leaders. I want the playing field to be fair and level. This is the work we do through the Ucal McKenzie Breakaway Foundation. We empower city youth and give them tools that they can use on and off the field. It starts at our soccer camps with education on nutrition, health, financial literacy, and other topics. I want the next generation to feel that everybody has a shot at achieving their dreams and making the world a better place. Second, I want to become an angel investor based on my personal experience raising capital, I've heard horror stories from women and people of color. I want to change the dialogue and change the status quo on access to capital, and make sure that ideas that matter and ideas that are going to create healthy communities can be executed and funded. How do you define success? I am a designer by trade and started my career in advertising. I have a high expectation of quality. I have a designer's eye, so the details matter. I push the design of our products, from our socks to our bags to our apparel, to be the best that they can be. The integrity in the design detail is important to me, and I go to the extreme to get the best quality. I drive my designers crazy when I say no to plastic or request more sustainable materials. I hold on to the integrity of our mission in being earth-friendly, and at the same time fair to people in the manufacturing process. What's one thing you want people to know about you? I'm determined and resilient. I've had a lot of challenges in my life and I'm fortunate to come from a strong family and have great friends and a healthy network of support. I have what I like to call an athlete's mindset. I grew up playing three sports, and I am definitely a fall down seven times, get up eight kind of person. I don't stop. I've learned that about myself as an adult and moving into a more mature version of my self. I know my resiliency is something that sets me apart and is something that I'm proud of. But I had to build it over time through the difficult challenges I've experienced. There's so much going on in the world. What's on your mind? Building a better business. I want to see Able Made thrive. There's no question I can execute an idea or a strategy with my team. I'm laser-focused on our goals, and what we want to achieve in the next 12 to 24 months. I'm focused on building the business in the way that I know that it can grow. But I need to raise working capital to scale. In time, the growing business will support the Ucal McKenzie Breakaway Foundation. We're in two markets, Boston and Hartford, and hoping to potentially grow into a third with New York City, based on funding. What keeps you up at night? The ability to execute based on our resources. I think any entrepreneur starting out or growing their business is always concerned about being able to keep up with momentum if they've been lucky enough to build it. We've been fortunate in terms of success and building relationships and having what I like to call "street credibility" with our partnerships with Puma, the Solomon R. Guggenheim Museum, Metropolitan Museum of Art (MoMA), the Council of Fashion Designers of America (CDFA) and others. We partnered with big brands and are excited to fuel momentum moving forward. What are you most proud of? Most definitely the foundation that we've built. When I have a hard day and I'm working through the business end of Able Made, I'll think about the foundation I built--that's the reason I launched the business. I can look at the photos or the videos of the foundation and reflect on the stories of the kids. I worked at the camps, and hearing the stories from the kids is really impactful. I'm getting goosebumps and tearing up a little bit right now. One of the kids lost his friend to gun violence in Hartford, and he still came to the camp, just to have a safe place to be. That was really touching. I'll never forget that story. Creating a safe place where young adults and children can thrive is what we aim to achieve. Let’s switch gears a bit. What's a song you never get tired of listening to? Maybe “Victory” by Puff Daddy. I listen to that when I go running and it's a grind-it-out song about victory and winning. That pumps me up a lot. Do you have a favorite movie? Why? I have a lot of favorite movies. I actually watch over and over again Lord of The Rings. I don't know why, I just do. I love the cinematography of it, I love the story telling and the special effects. I'm always a geeky sci-fi person. I really appreciate the artistry that comes with that sort of work and I think they just did an amazing job with that series. I watch that and The Hobbit all day long. Do you have a favorite book? I like Michael Bierut's most recent book How To. He's a partner at Pentagram and I love visuals because by the time the day's done my eyes are so tired I can barely look at anything. I appreciated his book. What's a piece of advice you'd like to share with your audience to make their life better? Don't be afraid to ask. If you don't ask, the answer is always no. I've gone far along in my business because I haven't been afraid to cold call people, I haven't been afraid to look someone up on LinkedIn and introduce myself. I've been able to garner some really great partnerships and relationships out of that tenacity and fearlessness of not being afraid to ask someone to work with me or to introduce my idea. You definitely have to come prepared if you're going to do it, but if you take the time to do it, everybody appreciates being approached if you admire them. If you come with a very strong pitch that you can feel strong about, I think you have to muscle the courage. I always encourage people to try it because the worse that they could say is no or maybe, and you keep it moving. I can tell you, it's moved mountains for my business to be able to approach people and see what's possible. To support the Ucal McKenzie Breakaway Foundation, visit https://www.ucalbreakaway.com. ### Community Lenders Pursues Growth Paul Quintero, CEO, Ascendus A successful business requires a minimum of two ingredients: 1) customers and 2) access to patient capital. Ascendus, formerly Accion East, a Community Development Financial Institution (CDFI), provides low-to-moderate business owners with capital and technical assistance services to build a sustainable business. I interviewed Paul Quintero, CEO of Ascendus, over the telephone on June 15, 2017, which is part of our Throwback series, spotlighting inspiring people and the work they do. This interview was edited and condensed for clarity. How long have you been involved with Accion? I’ve been involved with Accion for just over ten years. I started in 2007 as the CFO, or I suppose in that first year the interim CFO, and then amidst the 2008 recession we combined with another Accion entity, which was necessitated by the departure of their CEO. And this is what I now call the restoration phase, because we went through the recession and had to ensure that we could survive the hits that our portfolios took after absorbing geographies like Georgia, Florida, Southern California, some areas that were hit really hard. After licking our wounds, we integrated the operation, and combined the CEO and CFO role. And then in 2011 when my predecessor went to go run the Accion U.S. Network, which is a hub entity that integrates the best of the four Accion members, I met with the board and stepped up into the CEO role. So I’ve been doing this role for about six years. I understand Accion is broken up into different areas of the country. Which areas are you responsible for? Yes, we are a network that serves all 50 states. Since I serve about 40 states, it’s easier to say who we don’t serve. We don’t serve the state of Illinois, because we have a Chicago office, we don’t serve Texas, Arizona, New Mexico, Colorado, Nevada, or the southern counties of California because there is an Accion office in San Diego. All of these places that we technically “cover” is through the Internet, so people can apply if they go us.accion.org and enter their zip code, and then we see where they are from. And if you are not in any of the states that I just mentioned, then you might come to us. That’s how we address space, but our teams are actually located in Boston, which is like a headquarters for the New England area, New York, which is a regional center for the tri-state area. And then in Florida we have teams in Miami, Orlando, and Jacksonville. So everywhere else, we don’t have a physical team, but we still do work there. For example, in Georgia, up until the recession, we had an office there. But we eventually had to shut it down because we couldn’t justify the funders not doing many missions. But today we do it through the Internet and through the referrals and the partnerships that we have on the ground; and we actually do more loans now than when we had a team there. The Internet can work if you have a good local partner, otherwise it tends to attract a lot of capital surfers; people just looking for money. So we started to pull back on that this year, because we are seeing across the country that the quality of those loans are far inferior to anything where they actually meet someone from Accion. You bring up a good point. You talk about capital “surfers” and people looking for that capital. What makes you different than some of the other lenders out there? Yes, we were actually ranked the number one startup lender in the country, and this is interesting because there a lot bigger players out there. Why us? They say it comes down to two categories. The first is service. When people take out a loan, they actually have someone to speak to when they call. All the questions that they had, they were able to ask and get an answer before applying. A lot of other places get people to apply first, then these people learn more and more about the loan as the process reveals itself. People come to us asking about costs, fees, processing, and they love the fact that we are transparent with them. The second category is our costs. A lot of the online lenders in particular are very expensive. Our median rates are in the low teens. People found that we are more cost effective and more transparent. However, the downfall is that we don’t do things in two hours. Our minus is that we are not as fast as the other options out there. I think for the right person, speed can be really good. But a lot of the times, people don’t fully understand the terms of the money. And we’ve had businesses in our portfolio that have taken on these types of loans, and have gone on successfully for years, but eventually ended up broke. And this is because they had to pay a large sum of money in a very short amount of time, and the business can’t sustain it. They mismatch the term of the capital with the use of the money. They were using it for long-term purposes but were trying to pay it back in the short term, and that doesn’t work. That’s not everybody, but there is a risk there. You’re dealing with some businesses that have had challenges in the past, and some that might not fully understand the lending process. What can a small business owner do to prepare to apply for an Accion loan? It depends on the size of the loan that they are looking for. Even if your business prospects have grown, your credit development and certification might not have, so you may not be able to receive a loan. We’ve grown up to lending $250,000 through a program called the Community Advantage Program. And this program is primarily oriented toward startups. And we use that guarantee so that business owners don’t have to put up the collateral that might be required. If you’re looking for a loan of less than $10,000 and want to get it done quick, then you could have ready three months of bank statements. Because those are probably the only documents that we need. We would go and triangulate roughly about how much you could afford to do. In the $15,000 to $25,000 area, we would probably want to see tax returns, because this size of loan is more significant for us. And for the most part, loans of less than $25,000 are unsecured, because a lot of people don’t really have the collateral going against that, so we focus a lot on cash flow. For loans above $25,000, we’re more similar to banks, so we’d want to see a couple years of financials. You don’t necessarily have to be in the positive, but we need a more robust understanding of what your financial activity is. I know a business owner operating a successful restaurant, which grossed over $2.3 million last year, that’s looking for $200,000 to start a new business; is that something that you’d be able to package through the Community Advantage Program? Absolutely. That’s exactly what we do. For example, our first loan was to a man who lived in Oregon and moved to Orlando and decided to open a microbrewery. And he wanted to locate it in a pretty popular place in Orlando, next to a barbecue place that did not have a liquor license. And a lot of the money he needed for this significant project was to build out his space, and there’s no operation in that. So I would say the key thing for startups, in regards to what we look for, is experience. And some of the best experience is someone who’s run a successful business before. The next best experience for us to see you have is if you’ve run a business, not necessarily your own, that is the same type of business you want to start. The thing that we don’t like to see is someone that has never ‘worked behind the counter’ of the type of business they want to start and have little to no track record. That’s the type of thing that could potentially knock you out. Because it’s qualitative, and not a financial thing, to know what you’re getting yourself into. As a startup that is looking to qualify, we also require that 20 percent of the project costs are equity in the business itself, which is unlevered money that we want to see put into it. Some of this is different depending on whether you’re just starting out or making a new acquisition as an existing company, but in general, we will be 80 percent your partner and then we want to see you put 20 percent in yourself. The third thing that we look for is having an outside income that could potentially service debt for some time, that’s another variable to help mitigate any risks toward the business’s cash flow. Because cash flow is something we can’t look away from, we have to believe that the cash flow can be there. But something to keep in mind is that this money is ten-year money, so that $200,000 loan at $20,000 a year, which is about $1,800 a month; we try to stretch out the maturity so that the monthly payment isn’t too significant. And that’s one thing that this product offers that a lot of other people don’t offer; instead of requiring people to pay off the loan in a very short amount of time, we stretch it out because we want to see people succeed. What do you do about the collateral issues for these types of small businesses? That’s why we use this program. That’s why we use the guarantee of the government to not require the collateral from these businesses that might not have it available. Collateral isn’t an issue for us. You’re in a very competitive industry. What keeps you up at night? There are been a lot of different pieces, mostly at the federal level. When you have that conversation about the debt ceiling limit, the government has in the past been shut down, or paused, and that meant there’s no one at the SBA to approve them. That’s a problem. And then on the microloan side, we still have to fund the portion that is not guaranteed, and we do that by leveraging our balance sheet. So how does a non-profit, that typically on a good year breaks even, how do we equitize fast enough at the pace that we’re looking to serve more people? Meaning, if I want to double the amount of people I serve, my equity base has to grow in tandem so that I can borrow from my banks, and lend to them. The only thing equitizing organizations like us is the U.S. Treasury’s Community Development Financial Institution (CDFI) fund. The conundrum that I have is if I want to grow, and it’s already at an annual pace, and the CDFI fund goes away, it’s going to be really hard to meet the needs that we know are out there. I worry about our inability to grow to meet the needs. We have good products, but we might not be able to expand. And that would be a shame, because I think right now in this country, people need entrepreneurship as another way to build wealth. If you don’t own a home, or if you do, this is the second best thing for wealth building. People need income, and they need wealth, and we can actually help do that. #### Business Owner Bakes New Business Model Desserts by David Glass was founded by David Glass, entrepreneur, author and chef.  Direct public offerings are a unique strategy that may be right for some small businesses to raise capital directly from the public. David Glass, the French-trained chef, author, and founder of Desserts by David Glass, raised capital directly from customers in the late 90s in Hartford, Connecticut, using a DPO. Learn why he did it. I interviewed David over the telephone on June 22, 2017, which is part of our Throwback series, spotlighting inspiring people and the work they do. This interview was edited and condensed for clarity. When did you decide that you wanted to do a direct public offering (DPO)? It was probably about a year before we did it, I believe it was ‘98. I think it was the Belgian WIP Beer, and also Ben & Jerry’s did something years and years before that. Why did you decide to do a DPO, instead of a private offering with accredited investors? Just the fact that we could tap into clients who really liked our cakes. The way we did it was that we put a gold sticker on every box. We’d say we were selling shares for $3 a share with a 100 share minimum, and if you’re interested either go to our website or give us a call. And I would say that’s basically how 95 percent of the people invested in us, they’d see the gold sticker on our box. In terms of getting your investment offering prepared, what was the process like working with the state of Connecticut? It was called a Regulation A Offering. We had a lawyer draw it up, and it was fairly expensive back then. How much did you spend preparing your documents? Too much, probably about $25,000. Plus printing, because we printed offering booklets too. It was probably $30,000 altogether. You were planning on issuing 650,000 shares at $3 per share, with a minimum purchase of 100 shares. How did the overall offering do at that time? We didn’t sell that many, obviously. I think we put a minimum in there of about $350,000 or $400,000, which we raised. You received an impressive response from customers. It was a bit overwhelming, and so many people responded. It wasn’t the amount that I wanted [to raise], but we were just surprised that we got such a great response. Were you responsible for handling marketing and interacting with customers, or was there someone else handling the administrative side of it? I was [doing all of ] that. I also had someone out sending letters, following up, and doing the paperwork. I would be the one that was on the phones, talking to people when they called, explaining to them about our business. You’re making these fabulous desserts, but at the same time, you’re also handling all of this behind the scenes stuff. How were you able to balance the business side of it, making the product from day to day, and the operations side in terms of the DPO? My wife is in charge of the operations. She worked in the factory, cleaned, hired, and invented cakes. So my job is more administrative, even though my name is on the company because I started the company before I met her. But I handled sales and marketing. If I could do it over again, I would probably put that money and effort into sales and marketing. How much time did you spend raising money for the DPO? It was less than a year, probably about 4 to 5 months. What did you do with the money you raised? We did some very nice packaging and promotional stuff in order to increase our sales. So we were able to take on some bigger clients. But again, that was part of the reason our business failed. We were doing business with Trader Joe’s, with the airlines, with a big customer in Canada. So we had a lot of our eggs in a few baskets. We had a lot of smaller clients, such as Zabar’s in New York City, that was one of our good clients. We had some smaller accounts, but the amount of business we did with bigger accounts was overwhelming. And of course when they stopped, or asked us for price reductions, or in the case of the airlines, after 9/11 business went down and the airlines tightened up. It just kind of killed us. Were your margins too thin based on what the larger customers were asking of you? Yes, that was one of the issues, especially with Trader Joe’s. When we originally set up the account, we had good margins. Then of course big companies squeeze you later on. For example, let’s say “it looks like we’re not getting enough money out of this, you need to lower your price a bit.” So that was a big thing for us. What was your product selling for at Trader Joe’s? $10 to $12? At Trader Joe’s, I think it was $6.99 for the chocolate truffle cake. I would guess the cost for to you to make the product was about half that, at least? It was different because we shipped it in quantity to them, we didn’t have to do any promotion. We had a fairly good margin. I would say our overall margin was 5 percent or 6 percent, for everyone else it might’ve been 10 to 12 percent, just because we didn’t have these other costs. At the end of the day, what was your typical profit range? Overall, in the years we had profits, they were in the 5 to 7 percent range. Were able to put the capital you raised to work to increase sales? Yes, to increase sales and to promote our item[s]. You were able to raise enough capital to go out to the marketplace and do some things, without the pressure of having debt. We did, and we were able to do the things we wanted to do. I was hoping at some point we were going to be able to sell the company. And then we’d be able to pay people back, and not just pay them back, but also for them to make money on their investment. There was no pressure right then and there, I knew it was going to be a multiyear process, maybe five or ten years. So we put it in that perspective, it was a long-term investment. How did you feel knowing that the people who were coming into your store on a regular basis were in essence owners of the company? It was the best feeling. We were dealing with people we knew, rather than venture capitalists or banks. So it made me feel good. These were people we would see at our annual meetings, when they would come in to pick up cakes. They’d call and write to us, it was basically like an extended family. Would you go through the DPO process again? If I needed to raise money again, I don’t think I would put myself in that position anymore. We’re so small, but the way we’re doing it now, is that we’re trying to grow organically. Whatever money we need, we just take it from revenue. I don’t think we’re trying to grow our company into the multimillions like we were back then. What was your goal in terms of revenue? We were hoping to get into the 10 to 15 million-dollar range—and hopefully people (investors) would have doubled their money. Was your exit strategy to find someone to buy the company, and then you’d ride off into the sunset so to speak? Yes, and then we would do whatever else we wanted to do. With your new business model, you’re baking the cakes at home and then selling directly to people in your area, as well as coming down to Connecticut twice a month, right? Yes, exactly…selling out of our car. We’re also starting mail orders soon. We tried a couple things up here, like the Farmer’s Market, which we found it didn’t work. It was just that 90 percent of the people coming by our booth were sampling. And maybe 5 percent of them were buying one truffle for a $1.50, and maybe 2 percent were buying a box of truffles. So, it’s not a model we want to do. We’re basically manufacturing to end user, were not selling to stores anymore because the truffles would stay out at room temperature for too long. We do sell to a tea shop here, but they know how to keep everything refrigerated and to sell things quickly. We also sell to a couple bars and restaurants, who know how to do things correctly. So mail order, trips to Connecticut, direct to customers, and the possibly to establishments. Is your strategy now to keep your expenses low? Right. I mean, we don’t have a store. And in fact we just witnessed this other food company start at the Farmer’s Market and open up a store. The store failed and closed. I think they were paying for the store from the proceeds from the Farmer’s Market, they seemed to be doing pretty well there. If anyone wants to buy something from us, they just come to our house, and we make our truffles here. Because it’s legal here. I started in Hartford, Connecticut, we were baking out of our house for a couple years, and it wasn’t legal. It was funny though, we had some very swanky clients, and we were baking in our house in this crappy section of town. So you can make good stuff anywhere. I worked at some incredible three-star Michelin restaurants in France, some of the best restaurants in the world, which had terrible kitchens. You couldn’t believe they were making that type of food in those kitchens. It’s kind of similar to a dive bar. You might go to a dive bar, and it doesn’t look like much on the outside, but they make some specific dish that you can’t get anywhere else, but it’s phenomenal. In the foreseeable future, are you focused on your lean business model? Yes, our home is the factory. Thanks a lot David, have a good day. ### HarborOne U Is Doing Well By Doing Good Maureen Wilkinson Vice President, Community Education/CRA Officer, HarborOne U Many community banks are moving beyond simply providing capital to entrepreneurs and small businesses; they’re providing training resources to uplift the founders and their local communities. In this interview, Maureen Wilkinson, Vice President, Community Education & Community Reinvestment Officer talks about doing well by doing good I interviewed Maureen over the telephone on June 14, 2017, which is part of our Throwback series, spotlighting inspiring people and the work they do. This interview was edited and condensed for clarity. The Credit Fair for Life is the longest running financial education fair in Massachusetts. How did you guys get involved? One of my predecessors had seen someone from Rhode Island do a similar fair at a local school on an annual basis, so he brought the concept over to Brockton and they agreed with it. So we collaborated not just with the school, but also with some of the other local banks and non-profits. This was almost twenty years ago. We just had our 17th fair, we typically serve between 200-300 kids through the program. The one program in Rhode Island stopped doing it about 8 to 10 years ago, so we are said to be the longest running in the country. And now we help other communities replicate what we do. When we were still a credit union, my predecessor used to go and speak at many trade association meetings around the country. And they would ask him to speak about this program, and we would have people visit. Then the State Treasurer’s office got involved, and they decided to get behind it. Then they took all of our materials and created a ‘tool kit’ and posted it on their website. Now the Treasurer puts aside about $50,000 each year and schools or other types of groups can apply for a grant. This grant can be used to start a new fair (you receive $5,000) or for an existing fair (you receive $2500). Many schools don’t even have enough in their budget for the paper and pencils that they need. So over time we’ve figured out how to do it as efficiently as possible. And we do it in the school gym, which saves a lot of money. We can now do it for under $1,000, we essentially just need to rent tables and chairs for the booths for the volunteers. Many of our materials come from donations from other organizations, and the kids love it. Volunteers always come back, because it’s such a rewarding experience to see them have that aha! moment in the budgeting process. What was the impetus to start the Success for Business program? HarborOne has been doing education outreach beyond just offering financial literacy to the community for about ten years. We’ve done financial education, like most banks, for 30+ years. But we formally set aside a couple rooms in our former Brockton headquarters, and made them into classrooms for not only financial education, but also for English speakers for other languages and citizenship, because that was what our community needed at the time. It was around 2008 during the mortgage crisis. Just from the success we found from so many people coming in and taking on these classes, and so many of them being immigrants and minorities who were struggling to have a better grasp of what their opportunities were in the community; we then expanded the concept to cover small business. And that’s when I joined the bank, or credit union at the time, when I then merged my former credit union into HarborOne. And my job was to research what kind of opportunities we could help people in regards to small businesses. In approximately a 15-25 mile radius from where we are, there were about 10,000 micro businesses. These businesses had 5 or fewer employees including the owner, and the majority of them were women. And some of the phenomena that you’d read about at the time said many of these people were displaced or laid off from careers that they had due to the state of the economy. But they weren’t done yet, and wanted to do something. So that’s why we launched HarborOne U at our Mansfield Campus, and we did life stage programming, but we also focused on small business. And at the time we were partnering with the U.S. Small Business Administration (SBA) and the Mass Small Business Development Center. They were doing a lot of education at the time, so we would give them our space to do it. Then we found that we had people coming to us and saying, “what if you did a class on this or that?” and so we found the things that worked. And they often run their course. We once did a course about developing websites, and another one on QuickBooks, and they all sort of have a life cycle to them. But we’ve done a lot in regards to social media for small business, first with the Small Business Development Centers (SBDC) and then a lot more on our own. So we were a credit union, we were subject to the Community Reinvestment Act (CRA) in Massachusetts, but we weren’t subject to the small business piece of that. We didn’t have to report our small business loan data, and we weren’t evaluated on investments in community development other than our charitable contributions. We became a large bank in terms of CRA, because we were two billion in assets. And then my predecessor retired, and so I inherited this part of his job. I still do all of the HarborOne community outreach for education, but then I took on the CRA thing. Not that we weren’t doing anything before, but I thought we needed to leverage more of what we were doing for HarborOne U; because we were doing these classes before we had the CRA obligation for small business. And one of the other things going on was that we recognized that a lot of these small businesses, if they haven’t been in business for at least two years, they essentially aren’t bankable. So we saw thousands of people coming through our classes, but haven’t been in business for more than two years. These people were the landscapers, the photographers, people who needed to buy things to get to the next level. After talking with the people around me, we recognized that on the personal side we were doing a lot of things for the financial education. So if people completed a four part series on financial education, we would give them a $500 line of credit. If they handled it well, it became a $1,000 after a year. So one of our small business reps that goes out and meets with customers, said to me that it’s too bad they couldn’t have a similar program. I said I think you could, and I can do it. I found the FDIC small business curriculum, and I brought it to the head of our commercial lending department. I told him it would help with CRA, the community need, and for the people that finished our classes; it gave them another option. I got the CEO’s buy-in, he said he was willing to risk $300,000. He agreed that since we were doing so much education for these people that were already coming to us, we should be able to lend to them before that two-year point. I then got the small business commercial lenders on board, and we agreed on which classes these people would need to take for the lenders to feel more comfortable giving a loan to a start-up. I was thinking that $500 wasn’t enough, so we moved it $5,000; and then if handled well it’d go up to $10,000. Because people could actually get a website launched and buy the things they need, so we got the buy-in from internal, and I had them describe which classes they thought were appropriate. They chose mostly the financial classes. This is because many start up owners are very good at what they do, which often isn’t keeping the books and doing their taxes. We picked cash flow, financial management, tax planning, and the concepts that they are likely not going to learn about elsewhere. Because of the revenues that they do have, they can’t afford to outsource these responsibilities. They do it themselves, and we wanted to help them ensure they are doing it right. We started out with six two-hour classes, and people could’ve completed the entire course in about three months due to the way they were scheduled. But we’ve refined the program overtime. We now have one instructor, and the program can be done in about six and a half hours total. We’ve had about 300 people go through the program over the last two years, 96 of them have fully graduated, and then about 20 people have come to collect the loan. When it comes down to the CRA piece, there are only 20 people on the books. So it turns out there are a lot of people who aren’t really interested in the money, but they want to learn, which is great. Are the small businesses going through a typical credit-review approval process, or is it streamlined? Yes, it is. It’s called innovative and flexible. The credit score will be accepted down to 600, and they don’t need a business credit score. We also loan to start ups with no revenue, as long as they have a one-page plan. And that’s the education piece. When they go through this process, we have a facilitator that particularly works with low and moderate-income folks in our communities that sits down with them for as long as it takes and helps with their financial planning. We have 20 people who’ve gotten the loan, but another 20 in the process of obtaining the loan. There are a handful of people whose credit score is below 600, which also may need the other types of support programs we offer to help them get on their feet. And that’s a longer process, but it definitely isn’t a race. And then some folks go through the program and decide to opt-out of the loan because they may realize their plans aren’t viable. This isn’t a bad thing, because if we help them recognize before they’re spending money that they aren’t going to be able to get it back, then that’s good. There are plenty of people at different stages, but our underwriters recognize exactly whom they are trying to help. If the business plan is viable and if the person has passion, they are working with them. So if they end up having a credit score below 600, we don’t just turn them away. We look to help them and give them suggestions on what to do for their credit score, and keep tabs on them to see if their goals are met. What you guys are doing is great. Most small businesses owners start a business to do what they love, not to get into accounting. So, you guys are educating these people in the other areas they need to learn about. Right. We walk them through the basics and the whole process of ensuring themselves that they stay cash-flow positive, and then get them to the point where they are able to hire someone else to handle these matters. And then once they can hire someone, we help them to know enough so that they can be sure that the person they hired knows what they are doing and not ripping them off. You’re still early in the program. Is there a specific success story that you like to talk about that embodies what you’re trying to do. Yes, Marcia. She came to us with an idea for workforce development funding in medical technical training. The concept was that she was going to open a school that the state would certify, and people would enroll in a month long program to become various types of different technicians within the medical field. She came to our classes, she got the initial loan, and she got the state and university on board with the program. In a 5-month period, we were able to turn the $5,000 seed money loan into a $25,000 SBA loan. She’s opened a second location, she has students regularly attending, and the state is actually paying her for every student that graduates through the workforce development funding in Massachusetts. And she’s still holding down her full-time job as a pharmacist. It’s a wonderful story, and now we hold a small-business pitch contest for people with really cool ideas each year. Last year’s winner was a baker named Darlene, she planned to open a storefront. But after she went through the program and won the contest, she realized that most of her sales were online. So she decided to do farmers markets, where people make order beforehand and then she brings the products to numerous farmers markets around the region. You seem to be having fun doing this. Some people may look at the CRA aspect as a burden, what’s your secret to having fun through all of this? I’ve always had the ‘helping others’ mentality, and the CRA was something we were already inclined to do. And I was doing the HarborOne classes even before I was getting measured on how many loans I had done for businesses with revenues less than a million. I think I would’ve came around to doing this, because I felt that we needed to complete the circle for them after we educate them about the financials. I would’ve gotten there even without CRA, but with CRA it’s a tool for me to get other people who might not be so inclined get in involved to be more flexible and innovative. But it was our inclination to give back to the community and its development, because we all win when we do that. HarborOne Bank is the largest cooperative bank in New England. That structure is very different than a typical bank holding company. What’s the story? How we grew up is very unique and different. We were founded a hundred years ago as a credit union, and up until three of four years ago we still were. But our CEO always referred to us as a progressive financial institution. And it’s always been about community. If you look at our structure, we only sold a minority share to our shareholder. So the bank is still control of the bank, because we want to maintain our culture of community. Obviously profits are important because they pay the bills, but we don’t want to lose sight of our community culture because it’s just as important if not more important. I read that the CEO of Panera Bread said “profits provide possibilities”, and a lot of people forget about that. If you make money, you can do all sorts of innovative things. In terms of ROI, what does the bank get for this program and what are metrics of success? We generally like to say we’re doing well by doing good. But for the people that come through HarborOne U, they don’t have to be customers of our bank. In fact, 75% of the people in the program are not customers of the bank yet. But then through our Marketing Customer Information File, we are able to track non-customers, and when they become customers. It is all with public information. We have been able to measure when someone comes to a class, whether or not they are already or a customer based on their name and address. We only count the new business they do with us after they take the first class, and people take different lengths of time to eventually open an account. We help our branches achieve their new customer goals, their new checking goals, and behind the scenes we track which branches receive the students from our courses. And we remind everybody that HarborOne U is bringing in business; it’s not just a great community development program. Whether it’s at ours or another branch, we get customers on board. Over the last ten years, it’s equal to $100,000,000 in a combination of both deposits and loans. That’s a hundred million dollars that I can trace concretely from people that have participated in the program, people that might’ve attended our first-time home buyer class and then got their mortgage, or a person came to certain business classes and got this loan then that loan. Now someone could argue that even without the class, they were going to come to the bank. That’s possible. But there are also probably many people who’ve had good experiences with our classes that told their brother or sister that then decided to come to us, which are people I can’t track. You’re very modest. You were actually the CEO of the credit union before it merged with the bank. What’s your story? Yes, I’ve been a CEO of three credit unions. I actually approached Jim Blake at HarborOne – I convinced my board at the time that it was the best thing for us to do. HarborOne was the best fit for my staff, for my members, and for our community that they were going to take on. Jim agreed with me, and then I got to be an individual contributor and I got to be what I call “Vice President of good things”, and that includes CRA. My past experiences as a CEO has helped in this job, because I’m more entrepreneurial and I’m always thinking of what we can do next. Your personality, excitement, and energy about moving these ideas forward are really big. I plan on writing a book about community based lenders, and this could end up in that book. I’ll follow up with you soon. Thank you Maureen. #### Women Must Build Network to Access Capital Susan Keller, Founder, Entrepreneurial Executives Starting and growing a business takes more than a smart founder, Susan Keller talks about how she helps women scale multimillion-dollar businesses. I interviewed Susan over the telephone on June 20, 2017, which is part of our Throwback series, spotlighting inspiring people and the work they do. This interview was edited and condensed for clarity. When did you begin working with entrepreneurs? About 25 years ago. I worked with an organization called the Center for Women & Enterprise. They focus on helping entrepreneurs have access to capital and to grow. I was on their board of advisors, and then I started working with women entrepreneurs in particular because I really felt the need to give back to women who were trying to start and grow their companies because they don’t have access to the same people and resources as men sometimes do. When you say women sometimes don’t have the same access to resources as men do, could you explain that a bit more? Yes, they don’t really have the same network. Men generally have a really good business network based on the fact that they work with people who are in similar industries. More women than men come from less traditional environments, and they don’t have the same network of people with the same business and financial acumen a lot of the times. So what did you do to help the situation regarding women entrepreneurs? Given the type of work that I did as a lawyer and the deals that I worked on, I had access to venture capitalists, private equity, and traditional debt, as well as the experiences I had working for various different companies, I helped create that network. And from that I started the Women’s Association of Venture and Equity, which is a national network for women in venture capital and private equity. Is the organization based in New York City? And what does the organization do? Yes, and we chapters in Boston, Washington D.C., and Chicago. First and foremost, we are a network and organization. And then we also provide education and access to people in the industry. You can attend events as a non-member, [but] you just have to pay a higher fee for the event. Do you have some success stories that have come out of this particular group? Well, more women have access to venture capital and private equity. There was clearly a need for the organization, because when I first started, I would get emails from people all over the country saying “I heard about your organization from this person, and that person…” And you could tell there was a need for it, because it just snowballed. We had our first event, and then in a short period of time women from all over the country heard about our organization and became members and came to events, and then we grew from Boston and New York to Chicago and Washington D.C., and we’ve partnered with a lot of private equity events too. Do you have an annual event that you do with the group? We do at least six events per year at each of our locations, including a lot of events in New York. Our most recent event was about investing in China. Out of the six events per year we have at each location, usually 5 are substantive and networking, and then we have one type of network event such a golf tournament for charity, but it’s also a networking event for the members of WAVE [Women’s Association of Venture and Equity]. You mentioned some of the challenges women face, such as a lack of capital and network, what are some of the things you do to help bridge that gap? A lot of it is education, teaching them financial acumen, and showing them what they need to create a business plan. And then also hosting business plan competitions; this past year we hosted Innovate Her, which is the SBA sponsored business plan competition which focused on products and services that would help women and their families. And so we create networks, mentors, and help them have the experience to get out there and showcase their businesses. When you look at certain professions, although its changing, women tend to be clustered in certain areas, in terms of professions such as teachers and things of that nature; do you see that as being a hindrance regarding seeking out private equity or angel investors? Not necessarily. I think the biggest difference between women and men entrepreneurs is that women tend to start their companies because they’re passionate about something, so it doesn’t matter what industry they come from; which doesn’t necessarily translate into a good business model. Men really focus on creating a business so that it is scalable, and that it makes sense so they can sell it. Women tend to hold onto their companies longer because it’s their passion, and I think that’s the big differential. I don’t think it matters what industry they come from, it’s the reason why they started their company and what they want to do with it. So men are looking at making a business scalable, making it as big of a behemoth as possible, while women are holding onto their passion. How do you help women start thinking about the bigger picture, instead of just focusing on their passion? By teaching them how to write a business plan, how to create financials and projections, and basically showing them the economics. Saying you can own this forever, and that’s fine, but your opportunities are only this big. But if you really want to take this to marketing, you really want to help change or bring your passion to people, you need to get funding, you need to give up a certain amount of control, and you need to scale the business. Other than these challenges that women face, is there anything inherent in women that could give them an advantage over men? It’s funny you say that. I really believe that a lot of the traditional traits that women possess are better suited to run a company than men. Meaning being able to multitask, to be a good listener, to be extremely well organized, some of those traditional traits that if you use them in a business setting, should make you more successful. Having said that, how do you get men to want to listen to women and make investments? As I’m sure you know, the VC and private equity industry is predominantly dominated by older white males. So how do you get them to open up their good ol’ boy network and let them in? They need to see the economics. The women need to really understand the financial acumen associated with their business, and be able to talk about the numbers. Because in the end, any business that has a really good foundation with good numbers and a good idea, can grow. They need to take away that whether it’s a male or female entrepreneur, they need to really look at the business. Having said that, you have to get them to look at the business. I would love to do the blind taste test with business plans. The hardest thing is because the network is not as large or as natural for women, it’s harder to get in front of the VCs. There are some VCs that actually understand that a more diverse group of founders and teams has a higher likelihood of success in their companies. There are a number of studies that show that. There are some men that are purposely looking for a diverse group of founders in any company I invest in, because of the likelihood that that investment will translate into a larger investment in the long run. But if you look at the types of businesses and the management teams that angel investors and the private equity people invest in, in many instances they tend to mirror those who are investing in them. That seems like a tough hurdle to get over in the long run. Yes. I think it’s just a harder, longer road lots of times. And so organizations like WAVE are creating networks and access to the right people, who can then get them access to capital. It will take a long time. But I think the more organizations and angel groups that are formed, such as Golden Seeds or Plum Alley and some other new ones, that focus on those types of investments and those types of investors will help. And I think sooner rather than later, people just have to look at the economics. What makes sense in a deal? And not all of those good deals are twenty year old boys in hoodies. I agree. So how do you help an entrepreneur assess a business opportunity? I really sit down and go through the numbers with them. I provide an overall strategy, and we come up with assumptions based on research in the market. And we really sort of test the model, both from a financial and operational perspective. And this is from how they’re going to market their business, to what sorts of operational challenges they will face, which is based on all my experience working with different companies. What are some of the common problems that you see entrepreneurs make when growing their business? They are too loyal to the people that started with them, and they don’t necessarily hire up to get the right talent. Next, they don’t want to give up control, so they wait too long to bring in the money that would allow them to scale it. How do you help them early on to see that these things could be issues going forward? It’s simple really. You ask them if they’d rather own 100% of a company worth a dollar or 10% of a company worth ten-million dollars. It takes a lot of education, explaining to them what the market looks like, and helping them find the right partners. So it’s not about losing control, it’s about gaining a partner that will help you get to the next level. And at the same time letting them realize that they have a really good skillset, but that they need to get the right team. So if they have the right team, and the right partner, then they will be able to grow faster, and will result in a bigger, better, stronger company than if they do it alone. And some of them want to do it alone, so that’s fine. When it comes to capital, what can entrepreneurs do to make their business investable? I think what’s most important is for them to understand what type of investment is right for them. A very small percentage of businesses are actually VC backable, because they just don’t scale. You can get other types of investors, or you can even get debt, depending on what your growth strategy is, and what your need for working capital is. So part of it is just baseline education, not everyone should get VCs, most people will never get VC funding. But they might get angels, or they might get people that are really interested in them as people, because you usually invest in management. And then being realistic about what it is you need your money for, and how that money is going to help you grow. What types of things are angel investors looking for in a business? A business that will have a pretty good rate of return, and a management that can execute on it. Is a ‘pretty good rate of return’ subjective? Well it’s got to have some scale to it. It can’t just be about getting their money back and 2% over ten years. I mean even sophisticated angels want their money back plus at least 10-15% return— less than venture capitalists, but still a fair amount. There are certain businesses, for whatever reason, that just aren’t scalable. If they don’t have growth opportunities, are they attractive for investment? Not for venture capital and private equity investment. They might get some high net worth individuals who have some different end goals than VCs. VCs and private equity have to put other people’s money to work, so they have to get a return. And a high net worth individual might like the person or may think it’s an interesting idea. So it comes down to different interests and goals. I tell people that they have to align the investor’s goals with the personal goals of their company. And then they have to find a partner that has those similar goals. You’ve been involved with another group of women CEOs, could you talk a little about that and how you got involved? Yes, the Women Presidents Organization. It’s an international organization for women-owned businesses, and it’s a peer-to-peer advisory group, in which I chair two of the chapters. Marsha Firestone started it almost twenty years ago, and it’s for second-tier entrepreneurs. So it’s for women-owned companies, in the growth space, who peer-to-peer advise, network, converse, share ideas, and discuss issues with other women Presidents and CEOs. It seems like your schedule is full. I have free time, but I’m also very passionate about helping entrepreneurs. Small businesses are the backbone of the economy, they are the ones who are going to be disruptive, who are going to come up with the next great thing, it’s not going to be the big companies necessarily. And I really like working with people with passion in terms of what they do. What are the two chapters that you oversee? I do the Providence chapter, and then one of the chapters in Boston, in which there are two chapters. New York has six chapters in Manhattan alone. There are about 150 chapters internationally. There’s one in Long Island, they are forming one in Hartford that my friend is the chapter chair for, one in western Connecticut, and there’s one in western Massachusetts. Who’s the person that’s going to be handling the one in Hartford? Kathy Crosky, and she also chairs the Springfield chapter. What do women have to do to get involved in the group? They have to own their company, at least 51% of it. They have to be involved in senior management decisions, and they have to have at least $2 million in recurring revenues each year. Most of them have significantly more than that, but that’s the baseline. The average size of the companies are about $20-25 million in most chapters. The world of financing businesses has changed in the past 10-12 years. Now you have even more ways of financing businesses, with Title 3 of the Jobs Act in terms of crowdfunding now being available, and there are different fintech companies that will come in and do accounts receivable financing. How do you feel about these new ways of financing a business? I think that crowdfunding, where they don’t actually take an ownership interest in the company, is good for certain types of companies and to get them more exposure. I think too many people think it’s the perfect thing, and it isn’t. Again, you have to have a strategy around it, you have to know why you’re doing it. You have to know who your audience is, and you also have to understand that you have to deliver something in the end. Too many times, people raise money on a crowdfunding campaign, only they have to spend all that money to deliver their product to the people, and they aren’t getting the money they actually needed or wanted to grow the company. So it needs to have a purpose, and there needs to be a strategy behind it, otherwise it’s not any good. I’m not necessarily in favor of the crowdfunding sites where people actually end up owning a piece of the company, because I am a firm believer that money is available out there. But what is most important is finding a partner who comes with the money and who will then help your company. Money alone is not going to make you successful. So that’s why I don’t like the crowdfunding where they go out and random people give money, and then own a piece of the company. I also think it messes up the cap table when they want to do some more traditional funding. In terms of the experience you’ve gained over the years, is there any advice that you’d say to a woman entrepreneur looking to start or grow her business? Yes, get a good team. Be willing to bring on people who are smart, who can help you, and who believe in whatever it is that you’re trying to create. The road to access to capital is a long one. Is there any advice you’d give to a woman in regards to being persistent and understanding setbacks. First of all, they need to understand their numbers. Even if they have a CFO or controller, they need to understand the numbers because no one is going to give them money if they don’t. Secondly, yes you have to be persistent, creative, and you have to get out there and ask. Women are not good about asking for things, they try to do it on their own and make it work, when they should go and ask people for money. You bring up a really interesting point. There are certain qualities that really make a woman successful in business, from being persistent to multitasking. When they show these qualities in the home, such as asking the doctor for things when they bring their child to the doctor’s office, why do they have trouble asking for capital? Because it’s about them, it’s not about someone else. They tend to be really good for others but not so great for themselves. They’re just not used to asking, it’s the way they are brought up. I mean, most young girls sit around waiting to be asked out on a date. When you’re not used to asking, and then you ask that one time and you get rejected, it’s like ‘oh my God I can’t do this’. So they need to be advocates for themselves and their company, and they need to be truly passionate in everything that they want for their business. #### Bank Executive Supports Small Businesses Glenn Davis, Vice President, Community Development/CRA Officer It can be a challenge for a business owner to source patient capital. Glenn Davis is the Vice President of Community Development/Community Reinvestment Officer at Liberty Bank, a community bank based in Middletown, Connecticut with over $7 billion in assets. Learn why he started the Academy for Small Business Lending program. I interviewed Glenn over the telephone on June 16, 2017, which is part of our Throwback series, spotlighting inspiring people and the work they do. This interview was edited and condensed for clarity. You started the Academy for Small Business Lending program at Liberty Bank. Could you talk about what the impetus was for starting the program? Well, my role is community reinvestment act officer, so we are looking at ways to have a measurable impact, rather than do work just for the sake of doing it, but we want to make sure that across our footprint we are really having an impact and addressing the needs of the community, because that’s the whole essence of the community reinvestment act. I had spoken with a colleague who’s a CRA officer up in Boston, and they had a similar type of program where they would do training for small businesses. And I was thinking of how to replicate their program, and do some tweaks. And the real catalyst for the program was from them, they provided the foundation; and then I took that, looked at our marketplace to see what the need was. And having been in small business, I knew that the real gap was in individuals that could’ve been in business for 3 or 4 years just working out of their homes, and they never really had enough capital to launch the business into something substantial. And that was also the hardest gap to fill in order to come to the bank for financing. Either they had credit challenges, or they didn’t have enough financial strength to justify a loan. And that also meant that they couldn’t go to the non-bank lenders. And when you put those two issues together, I think that really was the catalyst for starting the academy. One of the things we did was take credit, their FICO score, off the table, so that was a non-issue. And that’s really been quite successful. When you say you took FICO off the table, what does that mean? If you complete six of eight classes, you haven’t been bankrupt in the past five years, you can pass opening a Liberty checking deposit account, and you’re not currently under the criminal justice system such as any indictments or parole or anything of that nature; then these are the conditions for qualifying for the loan and the $5,000 line of credit. If you do those things and you can pass the tests, you’re basically assured the $5,000 line of credit. If your business wants more, such as $10,000 or $15,000, then you’ll have to qualify based on credit. And then that’s when we’re looking at the revenues of the business, and also your credit score. But for that initial $5,000, the revenues of the business and your credit scores are non-issues. What was the reaction in senior management when you brought this idea for the program back from Boston? It was difficult, because it’s taking credit off the table. So essentially I was saying, this is a pool of money at risk, and that was the perception of it. But again, I guess no risk, no reward. So initially, management really liked the concept; they just had to get their arms around not dealing with the credit. And in fact, that’s really how we came up with the five criteria regarding bankruptcy, the criminal justice issue, and being able to open up a Liberty deposit account. Because in good faith and consciousness, you really couldn’t give someone a $5,000 line of credit if they aren’t able to open a deposit account because they failed to pay an obligation at either our bank or another bank. So to a certain [extent], this is a credit criteria, but not in the same context that you’d think about going to a bank and applying for a small business loan. What was the business owner’s perception when you told them about this program? Were they waiting for the catch? The business basically had to be around for 1 to 3 years, which was the market we were looking into. Business owners were cautiously optimistic, but they were very welcoming to this approach. And in fact, the first class was in Meriden. Then we had New Haven, and Willimantic. And the response was incredible. Even this year we oversubscribed the New Haven class, and I’m constantly getting applications and registrations. I think business owners, as they go through it, appreciate the things they learn that are valuable to their growth. What kinds of businesses are going through the program? It’s across the spectrum. Hair salons, beauty shops, restaurants, metal shops, really across the spectrum. It’s great knowing that everyone from all these different businesses feel comfortable applying. Absolutely. From an instruction standpoint, the business curriculum that we use is the FDIC’s Money Smart for Small Business curriculum. And the instruction is applicable notwithstanding the industry or business type. So people have been receptive to the instruction. And I’ve tried to compress it. In Meriden, I did it in eight weeks; and that was a little taxing. And then I started doing four-week commitments. So we did it twice a week, the people really liked that. There were also sponsors on the ground. In Meriden I worked with the Community Economic Development Fund, in New Haven it was the city’s economic development department. And we found that you always need to have someone on the ground, because it’s a high-touch environment. And I find having that having that partner on the ground is key. In terms of what the reaction has been from the students after going through the program, how have they reacted? Very positively. I’ve gotten great comments and compliments from the participants, they’ve been very receptive. When they go through the program, they learn different things, or maybe they relearn some things and now they’re applying again, how do the nuts and bolts work for the account they receive. When they graduate, then what happens? Typically, what I do is around the sixth or seventh class; I’ll go in and explain the process. And the process is essentially that we have the line of credit agreement, the documentation is very limited because we try to streamline it. I go in and provide them the templates, so on the last class, they come in with all of their business certifications, their employer identification numbers, all their organizational documentation, and then they sign the agreement. I take that, bring it back to our small business lending center, and probably within ten days they have a line of credit. And I explain to them that this isn’t a grant; we are not giving you $5,000. We are making a commitment to you in believing that this money will help launch you to the next level. In Meriden, I had a jeweler who needed $3,500 to buy a piece of equipment that would help him attract more business. I told him that $5,000 might not seem like a lot of money, but it’s a way to start building your business’s credit. I think people really embrace that, and some say they’ve never seen a bank do something like this. After having said that this is a loan, have some people had the mindset that this was free money? I think you’ll always have that. And unfortunately I think some individuals have that mindset even in the academy program, and they come to the class with that impression. Which kind of gets back into preparing entrepreneurs for traditional capital. What can you do to prepare entrepreneurs for capital? And letting them know that this is a loan is an important part. Absolutely. I think along the way, structuring the training program so that they’re thinking. Ideally, you’d want everyone to be diligent and conscientious about their business. It’s serious business as an entrepreneur. The reality is that not everyone will be. So you provide the information, you provide the opportunity for them to learn, and you hope that they’ll grab and take hold of it. For me, and obviously the success of the program isn’t just having a lot of participants, the real success is to allow all this information resonate with them, and to make a difference in how they do business and how they proceed with their operation. I think that’s really the success. And as you teach and go through the program, people really begin to see that. So for me, I’m already starting to think about what the next level is for the academy. I’d like to continue to do the academy as is, but if I want to have a long term, sustainable impact; I can’t just continue to do the academy. I have to do the academy plus other things. So even though this is the second round, we have five classes this year, we had three last year; so the next level is probably to take the individuals who’ve already successfully completed the class, and bring them back into another cohort of business education that’s a little higher than what they’ve experienced in the first stage. You mentioned preparing people for capital, and letting them know that it’s not a grant. In lending there are the 5 C’s, including Character. How do you address that issue of character? I think the character issue is addressed by having the partner on the ground. To a large extent, I’m relying on the non-profit or the agency that I’m working with to say, “Yes, this is a person I really want to recommend”. Because notwithstanding their credit score, that doesn’t necessarily dictate their character. In many instances, circumstances could impact their credit score. So that partner on the ground is critical. I think the other thing about character is about how attentive they are, and the discipline they bring to the class. If someone is erratic, or I’m constantly getting calls saying they can’t make the class, then I kind of know that it’s not going to work and that the person isn’t that serious. In terms of measuring success, after the eight classes you’ve done, what are some of the metrics that you’ll use to measure the success of the program? GD: The first metric is just the number of participants. Last year, I had 20 participants per session, which was the class size. This year, based on the funding allocation, and after looking at the markets that I wanted to address, I had to scale back due to limited funding. And the success is obviously always our defaults; we want to make sure there are low defaults. Even if we have 100 small business academy loans out, we don’t want to have 10% defaults. Typically this is a high-risk pool, and the bank understands that. So the success is really if I can limit that default, because that means the individuals came through the class and really understood and tried to implement what they learned. So clearly the default is key. And then I think success is how someone is able to take the $5,000 and leverage that to create greater opportunities. For example, the jeweler that I talked about; if we’re giving him the $5,000 loan that he probably couldn’t have traditionally gotten, if that piece of machinery enabled him to expand his business 20%, 30%, or even double his revenues, that’s success. From a practical point of view, you have a partner on the ground that’s vetting these participants. Once they graduate, and they get access to the line of credit, are they fully responsible to Liberty Bank in terms of monitoring the loan? Because it’s a credit product, it actually becomes part of our small business loan-servicing platform. So they receive monthly interest payments, they receive past-due notices. And if a default happens, then they go into our special assets. It still falls back into our operational platform that we would do for our traditional small business lending. Most banks have to be responsible to the communities that they are lending in. Are you just gearing the program to communities that you’re actually operating in? Yes. The tenants of the Community Reinvestment Act are that we identify our assessment areas, so from a compliance standpoint, we are responsible for making capital accessible in our assessment areas. So that’s our primary focus. For Liberty Bank, it’s all of New Haven County, Willimantic, Groton, New London, Norwich, West Hartford, Bristol, New Britain, Waterbury, and then all of Route 8. So that’s our assessment area from a regulatory standpoint, and the regulators will look to see what we are doing to these marketplaces. So part of the strategy around the academy was to look at key low- and moderate-income census tracks, such as New Haven or Waterbury, in our assessment area, and that’s really where I tried to focus and start the classes there. In terms of capital and making it available, do you feel that the markets you’re reaching have enough options for people who may not be ready for traditional financing these days? Absolutely, I mean there are a lot of traditional and non-traditional sources of capital. Because you have your non-bank lenders, and then you have your hard moneylenders; so I know that’s a reality in the community. I do think there are enough options for entrepreneurs to grow their business. If the entrepreneur is serious and committed to the principles of running their business, they can find money. What my experience has taught me is that every entrepreneur that I’ve engaged with is an expert in his or her trade. That is never the reason why they fail. They fail because they don’t have the discipline in regards to the operations. Because they are always going from hand to mouth, they might not pay their taxes. So they get into trouble with the IRS or other contractors. So it’s always those issues, not their specific skillset. So that was really a catalyst for the program, making sure they have the training necessary for success. What area do you find the most businesses lacking in? Whether it’s marketing, accounting, financing, sales, or just balancing the responsibilities of being a business owner? I’d say it’s the accounting and finance, and then overall operations. That also means the paperwork, filing the necessary forms when they should be filed. It’s the back office stuff. Because they are so busy and engaged in working and making it happen that they don’t spend the time doing those things. What inspires you about this program? What really inspires me is to see so many people benefit from the bank’s commitment. I used to be a lender, and even today I can drive up in Springfield with my daughter and say, “I financed that building”; that’s ten or fifteen years ago. And that kind of longevity, it’s a legacy that I think every lender should have. To feel that you’ve had a hand in developing that building or subdivision. The real inspiration is to see these individuals gravitate to the information, to appreciate what the bank is doing. I had an individual send a letter to the president thanking them for having such a commitment to the community. That speaks volumes to me. Do you see it being a permanent program, or at least some variation of it? Absolutely. Here’s my wish list. I’d love to keep the academy, but to broaden it so that we have the entrepreneurs coming in for the program and receiving the $5,000 loan, to have the next iteration of that be having them come in next for $25,000. Which means that their businesses have grown to that level, and that they have the revenue stream that supports them needing $25,000, $30,000, or $50,000. And then related to that would be being able to bring those individuals back for another cohort of instruction that helps launch them to a different level. You mentioned that you have partners on the ground. The partners also have the ability to match what you’re providing, right? Correct. If an entrepreneur can justify needing $10,000 after already receiving our $5,000 from completing the course, the Community Economic Development Fund will match our loan amount. But theirs is based on credit, so they’d have to meet their credit criteria. We’ve covered a lot of material. Is there anything else you’d like to say? The Academy has been great, we are actually in Middletown this week, and then hopefully we will go back to the same communities. It’s a great program. #### Former Goldman Sachs Analyst Asks Tough Questions To Grow Businesses Jill Johnson, CEO, Institute for Entrepreneurship Leadership. Entrepreneurs have a difficult time raising capital and building a business. In this interview with Jill Johnson, Co-Founder & CEO of Institute For Entrepreneurship Leadership (IFEL), which was conducted over the telephone on June 13, 2017, she provides her unique perspective from the world of entrepreneurship. Time has passed since I interviewed Jill, but her insight and wisdom is still relevant today. Our Throwback series spotlights inspiring people and the work they do. This interview was edited and condensed for clarity. Could you talk a little about what the Institute for Entrepreneurial Leadership is and how you started it? The Institute for Entrepreneurial Leadership is a not-for-profit organization that my father and I started together in 2002. The focus is to connect entrepreneurs with the knowledge, networks, and capital necessary for entrepreneurial success. We also have a particular focus and outreach on entrepreneurs from traditionally underserved audiences, including women, minorities, and entrepreneurs from low-wealth communities. What led you to start this organization with your father? My parents had a newspaper publishing business called City News for about twenty years. It was a good business by many accounts, at their highest point they employed about 12 people or so, and hovered around the $900,000 level. It helped to put food on the table and get my siblings and me through school. It was a business that was generating revenue, employing people from the community, they were very involved in the community, and their publication itself was serving a need in the community. Publicizing good things that were going on, and helping people have hope. Unfortunately they didn’t build their business in a way that would enable them to monetize the value that they had created in the City News brand over the twenty-year period of time until they decided to retire. I started my own career in the financial analyst program at Goldman Sachs, and I saw in Mergers and Acquisitions a lot of people make a lot of money selling businesses, starting a business and selling it for a lot of money. None of those people looked like me, there weren’t women, and there weren’t minorities who were doing that. After having that experience and working with my parents a bit writing business plans for people who were raising money during the dot com era; I wanted to use my knowledge, expertise, and my talents to help more businesses figure out how to create a path to create wealth through entrepreneurship. What are the unique challenges that small businesses face in regards to people of color that you help them overcome? This isn’t necessarily only for businesses of color, but a huge challenge is creating a sound infrastructure. How do you build a team so that the business can run without you? If you can do that, then you are on your way to at least creating an opportunity to monetize the value in your company. Is the business profitable? A lot of people focus on growth and revenue, without focusing as much on profitability, and that’s really key. I think the challenge for a lot of minority companies is the access to capital. Particularly to grow, how do you get over that hurdle so that you as the owner who’s doing everything, to being able to hire the right talent who can help you in the business and take it to the next level. And that talent is expensive. Capital gives you the ability to learn from mistakes. Because you can make the mistake, recover from it, and move on and keep growing and building. If you don’t have capital, it’s often tougher to come back from those mistakes. Capital gives your business the runway that enables you to have the time to be successful. You talk about getting businesses capital ready. Explain what you do to get a business capital ready. It starts with asking, is the business profitable? Do the economics of the business make sense? So many entrepreneurs don’t fully understand the economics of their business. So they could be underpricing, because they don’t understand what it costs them to produce the product or service. That’s definitely part of it, and then it goes back to whether or not the business can run without you. Maybe you’ll be able to get a loan, but the loan is far more risky if the entirety of the operation is dependent on you. A business that can run without you becomes more fundable. Do you have a plan? How are you planning on growing? Do you have a plan that’s based in the reality of an entrepreneur? Because we are often reaching for things that most people might say are unrealistic. But this is because our reality is just different than everyone else’s. Also thinking about how to achieve that plan, and how to fund it. You might not have the capital that’s necessary to fund that plan. So you’re part of the Workshop In Business Opportunities (WIBO) curriculum, could you tell me how that helps businesses develop systems so they can be profitable? It’s actually a curriculum that was created fifty years ago in 1966, and we brought it into the IFEL umbrella in 2011. It is such a phenomenal curriculum because it really focuses on the fundamentals. It walks a person through everything from nailing down who their target market is, to figuring out how to market toward that audience, how to reach them, how to find them, pricing strategy, looking at cash flow, and then looking at various operational aspects of the business. So it really is just a great guide through the fundamentals. And that’s what a lot of businesses are lacking. Based on your experience, what area would you say is the most lacking for small businesses when assessing their skill base? Usually it’s the understanding of the economics of the business. Is the business profitable? Are you paying yourself? If you aren’t paying yourself or only paying yourself a little bit, then the business is far from profitable. How do you get an entrepreneur to really assess whether or not they can make this work? The way we work with entrepreneurs is helping them through a process of self-discovery. So it generally doesn’t work if someone from the outside says this won’t work, and this is what’s wrong. You have to help them understand and to see for themselves what needs to change. Is the curriculum is a 16-week program? Yes, but in the workshop there is also a lot of discussion amongst and between the participants. So when you have another participant saying, “How much are you making? It doesn’t seem like you can make any money from that. Because I would probably pay twice that for this product.” We’ve seen this a lot, where the participants in the course are the ones pressing on certain issues. As they are going through this course, is the goal for them to decide to start a business, or is it mainly just to learn how to write a business plan? The purpose is based around people starting their business, and seeing if their business is viable. And so at the end of the 16-week workshop, they have the tools necessary to get going in a way that is economically sensible and whether or not there is the opportunity to be profitable. You have some exciting things going on, including the 9th annual Next Level Business Plan and Pitch competition. Tell me a little about that. The focus of the competition is helping people put together a strong business plan. We put it in the format of a competition because it’s more fun and enticing for people. But really it’s just a means to get people involved in the program where we provide guidance and feedback for writing business plans. We show them that writing a business plan is nothing to be afraid of, that they don’t need to get someone else to write it, that it essentially just takes what’s in your head and puts it onto paper; how you’re going to make your business successful and how you’re going to make it work. So we try to take the intimidation factor out of it. You’ve been involved in Newark as a community based, not-for-profit organization. What kind of impact are you having on the community that you’re in? Some of things we are doing are working with local businesses in Newark where we are located. We have engaged in a project with the Prudential Foundation, where Prudential employees have been involved in working with local businesses as volunteer teams. So they are helping entrepreneurs identify and work through strategic challenges that their business might be having. We also do WIBO courses here in Newark for businesses in our area. And then when you look across the board in terms of our impact on local businesses getting started, there are now 7 different locations outside of New York and New Jersey that are using the curriculum. And the number of businesses that we are seeing going through the program and getting started is definitely creating excitement for the communities that they serve. When you talk about the communities that you’re in, are you referring to the businesses in New York and New Jersey or outside those states? We are in Portland, Maine; a community near Williamsport, Pennsylvania; Bridgeport, Connecticut; Richmond and Roanoke, Virginia; and Kansas City and St. Louis, Missouri. I think one of the things that’s changing in the world today, specifically in the United States, is that the corporate world is no longer a safe option for many people. What’s happening is that many people are becoming self-employed out of necessity. How do you help those people make that transition from being sort of an order-taker to being in a leadership position? Is that a long process, or is that just something that people realize they have to do over time? In some cases, it may not be in their best interest to make that leap. It may be better to find another entrepreneurial environment and find someone else who needs help. It’s critical for people to assess their true talents and to understand what their skills are, because it may be better. If you’ve been a great operational person with a company, you could find an entrepreneur or small business or start up who needs that. You may be doing it even in a self-employed fashion, in a contract capacity, but you’re still doing what you do best. I think people can develop leadership skills, but that probably means those skills were just latent and just weren’t being used versus just not being there. People have to do a personal inventory, and a self-assessment to really know what values they add to any company, including their own. Because even if it’s your own company, you might come up with the idea, but you may need to figure out if you need someone else to lead it and be the CEO. I saw that you interviewed Piper Kerman, author of Orange is the New Black. During that interview, what did you learn about her that you didn’t know that helped you learn more about that population? Her story was very interesting. I think her situation isn’t necessarily unique, but what was different about it was that she had resources and a support system going in, which then enabled her to have that same support system coming out. Many people who are incarcerated do not have that, so when they come out they are further isolated and the prospects of getting themselves on track are much more difficult. When trying to start a business on top of trying to figure out housing and other life issues, it’s tough. So the main thing that I learned from Piper’s story is that having that support system makes all the difference in the world. Why is it important to help the reentry prison population? Why is that something that you feel strongly about? Well for one, we are incarcerating people at far too high of a rate, more than any other industrialized country. So I feel like there is a problem there. That being the case, if we are incarcerating people at such a high rate, there has to be a way for them to return and be contributors to society and their communities when they get out. And if they can’t find their place in a productive way, it often turns into reentering in unproductive ways. It’s very important to find ways and provide opportunities for everyone that’s willing to work hard, and who want to achieve something better. Have you had anyone who’ve been in prison go through your program? We actually offer scholarships to people who were formerly incarcerated. So the financial aspect is not a roadblock for going through your program? No it’s not. But we do find that they are more successful going through the program when their personal life has stabilized. Do you see yourself changing your mission and becoming involved in lending, or do you see yourself continuing to be more of a facilitator in delivering the client to financial options? I’m open to moving in the direction of being a direct provider of capital, whether that’s lending or other form of capital. I’m open to doing it in a way that finds an organization that’s doing it well and is in alignment with our mission, and inviting them to join our family of programs, much like we did with our Workshop. Do you have a specific success story that you’d like to talk about regarding a client that’s gone through your organization? Yes, there are a number. One of the largest WIBO success stories is Bogota Latin Bistro in Brooklyn. We have a number of success stories in our newsletter that comes out each month. Thank you Jill for participating. And at some point I may contact you to follow up about one of the success stories. Terrific, thank you Anthony. Special Note: I want to congratulate Thomas Dupont for graduating from the University of Connecticut School of Law in 2021. Thomas, Class of 2017, transcribed this interview when he was a paid intern for me, while attending Wesleyan University in Middletown, Connecticut. Currently, he works for a law firm in New York City. #### Distractions Derail Productivity  Success is routinely measured by accomplishments. Did the Los Angeles Lakers win the NBA championship? Did Apple achieve its annual sales goals? Did Tesla begin manufacturing its Cybertruck? While numerous factors certainly contribute to success, none is more crucial than productivity—this is where the day is won, battling to keep the seconds and minutes from potential saboteurs known as distractions. Productivity Oxford Languages defines productivity as “the effectiveness of productive effort.” But distractions are thieves of productivity. For example, a new email may arrive in your inbox while you are in the middle of an important project. You know you shouldn’t open this email, but curiosity kicks in. Now you’re going down the proverbial rabbit hole. If you fail to accomplish your work goals, you must examine how effectively you used your most precious resources: time and attention. The results—or lack of—can be traced directly back to your daily productivity. According to Basex, a business consulting firm, interruptions cost U.S. companies $588 billion annually. When we succumb to distractions, whether it be checking email, looking at our smartphone, watching NCAA March Madness, or perusing social media, we lose the battle of productivity to distraction--and that time and potential productivity is lost forever. Our focus often crashes. According to Gloria Mark, professor in the Department of Informatics at the University of California, Irvine, it takes nearly 24 minutes to get back to the original task after an interruption—think of a derailed train and the time and resources required to clean up the mess. Mark’s research indicates that distractions have a psychological impact as well: “Attention distraction can lead to higher stress, a bad mood and lower productivity.” These psychological impacts can be contributing factors to poor results for both an individual and an organization—a timely warning for companies scrambling to open their physical offices as the pandemic in the U.S. subsides. An interesting fact from Mark’s study is that interruptions at work are usually self-inflicted. An example is answering a personal call on your mobile phone, or sending a text message to a friend—it’s like an own goal in soccer. This is not the same as a co-worker interrupting your work to ask a project-related question. Deep vs Shallow Work To win the day with improved productivity, you must do deep work. Cal Newport, a professor at Georgetown University and author of the book Deep Work: Rules for Focused Success in a Distracted World, coined the term “deep work.” Deep work has been defined as “the ability to focus without distraction on a cognitively demanding task.” This type of work requires our full attention, such as a computer programmer writing code, a dentist performing a root canal, or an automobile mechanic fixing the brakes on your SUV. Shallow work is the opposite of deep work. Shallow work is “non-cognitive, logistical or minor duties performed in a state of distraction”, which can be summed up as easily replicated, requiring little thought. Examples of this are searching the web, viewing social media, or passively listening in a weekly Zoom meeting. You can’t focus when constantly distracted. Would you dare interrupt New England Patriots Head Coach Bill Belichick when he is performing deep work: developing his strategy to win the Super Bowl? Probably not. Could you picture a five-star general on the battlefield sending nonessential text messages during a critical mission? Focus is your ally to get deep work completed, and can be a game changer, leading to a greater sense of personal fulfillment during the day. Anything worth doing takes time and attention—the idea of multitasking (performing several tasks at once) has been thoroughly debunked, especially when it comes to doing deep work. Productivity Tips for Deep Work Deep work is the solution to unlock meaningful work productivity. The website twominutebooks.com provides productivity tips based on the book Deep Work.
Star Deep Work Now We live in a noisy world where many stimuli compete for our limited attention and time. To be successful, focus on deep work and the resulting productivity by developing a routine of good habits. Rid yourself of your distraction demons: the productivity killers. When you ignore distractions and the tendency to engage in shallow work, you will be in a position to get more done. Deep work will lead to high productivity and the potential for successful outcomes. This is not to say that you will never succumb to distractions. It’s a constant battle worth winning. #### Don’t Fret When a Bank (Computer) Declines Your Business Loan: Review Your Options By Anthony Price Note: This piece was written just as COVID-19 hit the U.S. For most small businesses, the SBA Economic Injury Disaster Loan (EIDL)is your best option. However, a number of states are providing grant and loan programs as well. Information and programs are changing daily. Contact me for more information. When it is time to raise capital, entrepreneurs check their pockets, ask family and friends, then go to a bank. Startup founders must accept that a bank loan usually is not in the cards. They are more likely to get approved for a personal credit card at an annual effective rate exceeding 30 percent than for a business loan. Commercial bankers decline loans for a myriad of reasons: 1) Operating history is fewer than three years. 2) Historical cash flows will not support the proposed loan request. 3) Credit score is too low. 4) There is insufficient collateral. 5) The business has not generated a profit in the past. Adding insult to injury, the decision-making process at large national banks is done by computer algorithm, not humans. Don’t fret about a “no,” because there are nonbank alternatives. But before you start searching for capital, ask yourself this question: Am I running a business or a hobby? A business must be focused on generating a profit, which is the result of creating value for customers. Profit is the money above what it cost you to produce the product—a reward for solving a vexing problem. On the other hand, a hobby is something you like to do but may not be a viable business. Start with the basics. A successful business does three things better than the competition: 1) Solve a problem that is a pain point for customers. 2) Create value by making customers’ lives better. 3) Build a business that builds the product consistently every time. Your value proposition (what differentiates your business from the competition) and marketing will be the difference makers. Next, are you seeking debt or equity? If you are seeking debt, try a community development financial institution (CDFI). The Riegle Community Development Banking and Financial Institutions Act of 1994 was signed into law in September 1994 by President Clinton, providing government support for CDFIs. CDFIs promote economic revitalization and community development in underbanked, underserved and underinvested communities throughout the U.S. The Hartford Economic Development Corporation (HEDCO) is a nonprofit CDFI based in Hartford that lends to small businesses throughout Connecticut. Other nonbank lenders in Connecticut are worth getting to know such as the Community Economic Development Fund (CEDF) and the Community Investment Corporation (CIC). Do your homework, and you’ll find new options, from Honeycomb Credit offering crowdfunded loans to revenue-sharing notes on Mainvest. Technology has allowed the creation of new capital options. GoFundMe is a platform that businesses can use to raise capital. Over $9 billion from 120 million donations has been raised on the platform since 2010, mostly to individuals. At the other end of the capital spectrum, Gust is the preferred platform where 85,000 investment professionals vet over 800,000 startups seeking investors. Kickstarter and Indiegogo are the two top reward-based crowdfunding platforms. Over $4.8 billion has been pledged on Kickstarter and over 178,000 projects have reached their goals, since its inception in April 2009. Project organizers offer a reward (their product) to raise funds. This author conducted a Kickstarter campaignto raise $20,000 to bring mini books to the masses. Mini books are 30 minutes of reading that fit in your pocket for on-the-go people. This is my second campaign. My first campaign raised $5,000 to write the book, “Get the Loot and Run.” Another option is investment crowdfunding, which was made legal when the SEC implemented regulations in 2016 as part of the Jumpstart Our Business Startups (JOBS) ACT of 2012, signed into law by President Obama. Start Engine, Republic and Wefunder are investment crowdfunding platforms. These platforms require a considerable amount of work, but once approved, you can solicit funds from the public on the platform and raise up to $1,070,000 annually. [Update: SEC increase the 12-month raise amount to $5 million in March 2021.] There is no Staples Easy Button to raise capital. But if you’re patient and do your homework, you may find attractive nonbank options that say “yes”. #### The Venture-Capital Game: An interview with McKeever (Mac) Conwell II, co-manager, Pre-seed Builder Fund, TEDCO. Note: This interview has been edited for clarity. Consult a securities attorney before raising investment capital. Whatʼs the best thing an entrepreneur can do to get themselves ready for seed funding? If you think about seed or traditional seed funding, and the way we look at venture capital, and you consider where venture capital is today, in 2000, 2010, 2012, you could get seed capital without a problem, without any customers or anything like that. And there are some instances where that happens today. More often than not, you have to have traction. Traction is defined differently from investor to investor, company to company. But it boils down to the most effective way to go out and raise funding is when you donʼt need it. So that means you probably figured out your customer acquisition strategy. Because customer acquisitions will get you paid as an entrepreneur, either through revenue or through way of traction to get funding.
What do you say to an entrepreneur at the seed stage if they donʼt have traction or customer acquisition? I try to be as honest with them as I can, mainly, investors and venture capitalist will just string them along and tell them they are not ready. Helping them understand if you want to get funding, these are the types of things we look for: We are going to look for you to have traction. We are going to look for you to have customers, paying customers. We are going to look for you to have some trial data or companies accepting a trial beta. And it they give me the response, I donʼt have money to market or get it out there, my response to them is the chicken and egg, right? As innovative and creative as youʼre trying to be with your business, you should be just as innovative with customer acquisition. You have two things: You either have time or you have money. So if you donʼt have money, you need to use all your time to figure out how to capitalize it. Because you already used all of your time to build and get the product, now you got to use all of your time to figure out how to get customers. Thereʼs plenty of channels to start getting customers—to start generating revenue that doesnʼt cost money—but requires effort and time. What do the companies look like that you have invested in the seed stage? They have one to three founders. Their development may be in-house or may be from a third party, whether they are contracting out with somebody or using a dev (development) shop. They are still trying to figure out what their long-term strategy is. But what they have figured out how is to get a group of people to start paying them for their product or a group of people to start using their product. We are not at the point of whether or not this truly scales. But we are at the point where we think it might. The money we are giving them is for them to figure out can this scale beyond the group of people paying you or using it now. From a product standpoint, itʼs usually a product that is mostly baked, but not fully baked. Thereʼs still some things that need to be done. Itʼs just now getting to the point they got some revenue coming in. They are starting to think through partnerships and doing some biz dev (business development) and they are at the earliest stage of creating themselves, branding themselves as subject matter experts. If youʼre going to create a startup and youʼre going to be a leader in the space, it always helps for the founders to build a brand and start to be known as subject matter experts or whatever space it is. What do you want to see in terms of a companyʼs ability to scale up? Typically, when we talk about [scaling up], depending on the company, thereʼs a company that has a product that is being used really well in their local area. If we are talking about Maryland, DC, Virginia area, now he has the ability to be a national company. This is a place where a lot of startups will fail because they are able to get the people in their local community, local state, or people they should go to. But what happens if youʼre based in Maryland and you want to expand to Texas? Do you have to hire staff or physically move your operation to Texas to get up and running? Or is there a way for that to happen organically or programmatically? If you need to put boots on the group for that, thatʼs not going to scale well. That takes a lot of money. That becomes very capital intensive. Grouponʼs way to grow was to have a gigantic sales force. And it didnʼt last. If we are talking numbers, when you come to me, we are doing pre-seed funding. Maybe youʼre doing $100,000 or $200,000 in revenue, how do we get you to $1 million or $2 million in revenue? Can you get there? Letʼs say youʼre selling a product. How do we get you to grow by 50 percent month over month for the next six months? Can you do that or can you at least start charting in that direction so that we know if you get more money you can continue in that direction going? At the pre-seed level, whatʼs the range of funding youʼre contributing to these businesses? For my organization specifically, at pre-seed stage we do $50,000, seed stage we do $100,000 to $500,000, and at the venture stage, we do $500,000 to $2 million plus. Do you put someone on the companyʼs board and provide additional services at this stage? No. For pre-seed and seed, itʼs personally my belief, you shouldnʼt have a board. If youʼre raising money at the pre-seed or seed stage, you should probably be raising a convertible note or SAFE (simple agreement for future equity) note. Thatʼs a note for equity in the future, based on a future evaluation. They are much simpler to use. They donʼt necessarily require you to have a board, so you can continue to grow the way you want to. When you get to a series A round, whoever your lead investor is, they are probably going to ask for one or two board seats. I typically tell entrepreneurs, if you have a series A round, youʼre a C corporation, you need a board, try to keep your board to three, definitely donʼt go over five. I think five-person boards are hard for a series A company. You really want three. You want your lead investor (or most impactful investor), you as the CEO, and then a third party, who is a trusted party that you as the CEO chose. And you chose them for the business acumen, not because they are always going to agree with you. Is your organization setting aside money for a follow-on investment, after your organization has made a series A investment? Yes, absolutely. The venture fundʼs initial investment in a series A is somewhere from $2 and $5 million. But as you raise additional capital there is capital set aside to do follow-on funding. What are your thoughts on the Silicon-Valley model, where they are trying to invest in unicorns (billion-dollar companies). They kind of have to because thatʼs the way the economics break out. If youʼre a fund, the majority of the investments you make are going to fail. Typically, the economics state that the one-year investments are going to hit and the recurrence from that should be large enough to return the entire amount of the fund. Then after that, youʼll have a few other companies that are going to hit and they are going to be your singles and doubles and triples that are going to give you some okay returns. Thatʼs where you make your money off of. That only really works for a unicorn model. From a venture stand point, you only make money back if the company gets acquired or goes public. Thatʼs a high bar to reach. Whereas, I think revenue-based investing allows for you to investment in a lot more diverse set of companies because you get returns back based on the companyʼs revenue growth, as opposed to a zero-sum game. Venture capital is a zero-sum game. Most companies are not going to get acquired or go public. But there are plenty of companies that may never be big that are going to grow and grow their revenue significantly over a period of time. You can get good returns back and be just as financially rich. Thatʼs a very different model. The Silicon-Valley model works because they are only trying to feed those super huge outcomes. I think thatʼs a form of investing that is overhyped and is one that we overvalue because at the end of the day, venture capital (VC) is nothing but a subset of private equity. Venture capital is like pennies compared to the money spent in private equity. What do you say to a company that is not going to be a unicorn, but could be very successful at the $10, $20, $40, $50, $100 million level? What do you say to that company that is not going to be a unicorn or shouldnʼt go to funders out in Silicon Valley? I tell them to be creative, and I tell them thereʼs more than one way to get funding. I tell them there are plenty of angel investors out there that do revenue-based investing. You watch Shark Tank, thatʼs a lot of the kind of investing they do. I also tell them the people with the most money that can make that kind of investment, are family offices. They are offices ran by families that basically have endowments or have generational money that is being managed by someone to grow. They understand revenue-based investing, very well. And thereʼs opportunities there. I tell them donʼt get so caught up in the venture capital, Silicon-Valley hype, because it is hype. Thereʼs a lot of marketing around it. Itʼs sounds cool. It makes for good stories. It makes for good movies. Thereʼs more than one way to play any game. Thereʼs a bunch of different ways to do this game. Find the one that works best for you. Thereʼs several books out there on other models and other ways to raise capital. Are there any books you want to mention? Jenny Kassanʼs book, Raise Capital on Your Own Terms: How to Fund Your Business Without Selling Your Soul. I believe she gives like 16 different ways for you to raise money for your company, without having to go the VC route. Why donʼt women and people of color receive funding comparable to white males? I think itʼs a really complex question. There are layered reasons for it. Very often—especially for people of color, I donʼt know if this is true for women, but Iʼm not going to speak on that—we donʼt have access or are not part of networks where money flows. There are people in this country who grow up in blue-collar households, who live in neighborhoods where their neighbor owned a plumbing business, or their uncle was a doctor, or their teacherʼs brother was a lawyer. And they are able to have conversations and be around people who think about money differently or have disposable income. Whereas, very often people of color will come from communities where that didnʼt exist. So even the idea of how money works in general in our capitalist society doesnʼt even get picked up, whether it be from an early age or later on in life. Itʼs not there. I would also say because of that, people of color and women are not necessarily exposed into the game of money and the game of raising money. Thereʼs a strategy to raising money. Itʼs not just I have a business, you should give me money, or I have a business thatʼs doing good, you should give me money. Thereʼs a process to it. And it youʼre not in those circles where you get to learn that process, and you come in without having the network and without understanding the process, without understanding itʼs a bit of a dog and pony show. Youʼre several steps behind, no matter how successful your business is, or how successful your business will be. How do we teach people of color and women to play the game of raising money? If you want to learn that game, a lot of that knowledge is out there. A lot of investors have blogs, where they breakdown exactly what theyʼre looking for when they talk to entrepreneurs. A lot of them have written books about exactly what they are looking for when it comes to entrepreneurs. Guy Kawasaki has a famous book called The Art of the Start, where he gives a breakdown on what the pitch looks like. They give some very practical advice. There are tons of YouTube videos of pitches, people giving advice on pitches, but you have to know to look for that. If you donʼt even know the language of startups, you wouldnʼt even know where to start. You wouldnʼt even know what to Google. I would also say programs like Founderʼs Gym. Founderʼs Gym is run by a former investor [Freada Kapor Klein] from Kapor Capital, who saw that these underrepresented founders were having a hard time raising capital because they didnʼt know the game. She literally created a program that teaches people the game of raising funds. Accelerators can be a good place to learn the game and then having the ability to reach out to mentors, or gaining mentors from entrepreneurs who have already done it who could share that advice. But again, very often people of color come from communities where the idea of a mentor isnʼt the same thing, where like your mentor was your big brother from the Boys & Girls Club or your best friendʼs uncle, who had a good government job and had the house that the water was never turned off, which is very different from me meeting an entrepreneur in my industry —maybe heʼs really successful—and me having a conversations, and asking him for advice and having them help me along and building my business. How do you educate entrepreneurs about being open to feedback? Thatʼs a tough one because people like that tend to not want to hear what you have to say. What I do is try and have a sit-down conversation and let them know like hey, Iʼm only here to help you. I worked with and helped a lot of companies. Iʼve seen a lot of stuff happen in this industry. Iʼm only trying to give you the benefit of the knowledge that I have accumulated and things Iʼve seen happen. At the end of the day, you as the founder of your company need to make the final decision, but it is worth your time and energy to at least hear out what Iʼm saying. And if they donʼt take to that, well it will probably never work. If youʼre an entrepreneur whoʼs not coachable, itʼs going to be really hard for me to help you. If itʼs hard for me to help you, Iʼm not going to be willing to open up my Rolodex and my connections to help you in the future. If youʼre going to act that way, and be difficult with me, I donʼt want you acting and being difficult with my friends or people who I do business with. Nobody wants to work with a jerk. Is there any advice you can give a fellow entrepreneur? Investors are not here to give you money to solve problems you havenʼt figured out. Very often entrepreneurs are looking to raise venture capital, looking to raise money from investors because they have some problem they havenʼt figured out themselves. They want to figure it out on someoneʼs dime. Very often itʼs how to get the product built or how to find customers and markets. Nobody really wants to give you money to figure stuff out, unless they just like you and care about you. Thatʼs why your first bit of money comes from friends and family, which is another thing entrepreneurs of color and women entrepreneurs tend to have issues with. People in African-American communities tend to give us money to get started because they care about us. So if we donʼt [get money from the community], we can only go to people who do this professional. And no professional investors give you money to go figure things out, especially a person of color. Iʼm not giving you my money to learn, Iʼm giving you my money to grow. Be really open to feedback and be honest with your investors, or the people around you trying to help you. Donʼt try to hide things. Hiding things and holding things back, only holds back your company. The moment you can be open with the people that are there to help you, the moment they can actually help you get through those things. How much have you raised? What led to the eventual sale of your company? For my first company, we only raised $25,000 and that came from an accelerator. We grew that a little over 4 and a half years. What happened was towards the end of that company, we had a large client who was using our product. And they basically wanted exclusivity, and we said instead of exclusivity, would you like to buy it? And so they came back with some terms and some things. They essentially purchased the technology from our company. In Silicon Valley terms it was an exit. It was a Fortune 100 company that bought the technology from us. It was an exist. It wasnʼt an exit in what you traditionally see, when you see companies get acquired because they didnʼt acquire us as a company, they just acquired our technology and our IP (intellectual property). That was fun. What happened next? Did you start another company? Directly after that, I started the second company. I went through another accelerator. I raised an undisclosed amount of angel investment. For my first company, we werenʼt able to raise money: 1) because we didnʼt know how to get customers and 2) we didnʼt know what we were doing. For my second company, raising money and getting introductions...that was super easy because I knew everything already. I understood the game of raising money. I understood what the investors were looking for. I had connections from day one for my second company. I had connections from people to help me and get feedback from. And I learned how to be a CEO and got really good at business development, so I was able to get customers. My second company everything came so much easier. But the part where I fell apart at, and the thing I messed up on was I just didnʼt get the right team. What do entrepreneurs need to do to get the right team? Make sure that the people you are working with are entrepreneurial minded, meaning they are willing and ready to quit their job, put in long hours, sacrifice a whole lot, and may have to do it for an extended period of time because they are doing it because they truly believe in the vision. If you donʼt have people who have fully bought into the vision, they are just doing it because itʼs cool, fun or something to do, then they are probably not the right people for your team. We covered a lot of material. Any closing thoughts? Entrepreneurship is one of the hardest things Iʼve ever done. And one of the hardest things youʼll ever do. And people will rarely talk about the dark side or hard parts about it. But Iʼll say itʼs the most rewarding things Iʼve ever did. So donʼt go into it thinking itʼs going to be fun, or that youʼre going to have a good time doing it. Thereʼs going to be a lot of hard times. But when you get to the other side, you would have gained and learned, more than you can ever have imagined. Is it fair to say that you may go back down the road of entrepreneurship again? I donʼt know, thatʼs up in the air. #### Comments are closed.
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