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Giving Back & Giving Thanks

November is a month of giving back and giving thanks. Here at the James J. Hill Center, we are thankful for our research services volunteers and interns who are invaluable to our mission of connecting entrepreneurs, business and community. Read on to learn more about our volunteer Sharon Lunak and intern Nick Riordan. 

Tell us a bit about yourself. 

Sharon: I was raised on a farm in Wisconsin and moved to St. Paul during high school. I worked for Remington Rand Univac and got married at twenty-one. My husband was a pastor in Wisconsin, and eventually we spent seventeen years in Japan as missionaries with our two children, coming back to the U.S. in 1987. My husband taught college students and I went to work at Jostens for the next twenty-five years.
Nick: I am a graduate student in Saint Catherine University’s Masters in Library and Information Science program. Prior to that, I studied Linguistics and Religious Studies at Macalester College.   

What do you do at the Hill Center? 

Sharon: I work as a volunteer receptionist two days a week or as needed during special occasions.
Nick: My work at James J. Hill Center varies by the day. Sometimes I work at the front desk greeting users and assisting them in operating our business resources, other times I am in the stacks reshelving or rearranging the books, and other times I am working down in the archives.   

What inspired you to volunteer/intern at the Hill? 

Sharon: I retired in 2016 and decided I couldn’t sit at home every day. Because my husband gave tours at the Hill House for eight years, it was a good transition for me to volunteer at the Hill Center. 

Nick: I began interning at the Hill in May 2017 to gain experience and exposure to working in a library and archival setting.  Although I was in the process of completing my first year as a library science student, I hadn’t ever worked in a library before. I wanted to see which elements of the profession I liked and which ones I didn’t so I could apply that to my career going forward, and this internship has helped greatly in that regard.   

What is your favorite part of being a Hill volunteer/intern? 

Sharon: It’s great working with the Hill Center staff, who are completely dedicated to making the Hill Center the best it can be. I also love the historical setting and enjoy meeting all the different people coming in to do research or visiting the almost-one-hundred-year-old building.
Nick: Being around all the old books and the overall stateliness of the library. Sometimes when you’re in the reading room, it’s tempting just to stop, look up, and be in awe! 

What is your favorite period in history? 

Sharon: I love learning about my great-grandparents coming to the U.S. from Europe (mid-1800s) and my grandparents learning to live in the U.S. (late 1800s), and, of course, making current family history with our five grandchildren. 

Who is your favorite “Original Thinker”? 

Nick: John Muir. In a time when nearly everyone in power was looking for ways to exploit America’s natural resources for profit, Muir focused on fighting to preserve them and was the impetus for the current system of state and national parks enjoyed by millions each year.   

What is your favorite James J. Hill fact? 

Nick: Hill would travel routes on horseback and determine whether they were suitable for his railroads.  It’s crazy to think how hands-on he was in all his business ventures.  
Sharon: Despite losing sight in one eye when he was young, James J. Hill became an entrepreneur, which led to him becoming a very successful businessman—and leaving the Hill Center as his legacy for all entrepreneurs.


Written by Ann Mayhew, Reference & Support Specialist, at the James J. Hill Center. If you have more questions about the reference library our our historic collection at the James J. Hill Center please contact 651-265-5500 or [email protected].

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Non-Profit and Grant Research 

Finding funding for a for-profit business is difficult enough, but how do you go about researching funding for a non-profit? You’ll still have the same operating costs, personnel expenditures, and one-off expenses, but many traditional financing options aren’t good fits for your financial needs. If you’re stuck on how to get the funding you need to get your non-profit off the ground, the James J. Hill Center has two specialized resources that can help.  

The Hill’s GuideStar subscriptions let users research other non-profit and not-for-profit entities across the country. You can search by geography, size, and most importantly by cause type. This can be valuable if you’re trying to see how other non-profits organize themselves financially. GuideStar collects selected non-profits 990 tax forms, in which the organizations provide required financial breakdowns of their operating models. This can provide insight on how to financially set up your own non-profit.  

Beyond GuideStar, the Hill subscribes to Foundation Directory Online, a tool that indexes both 990 forms of non-profits, but also organizations that give grants, organizations that have received those grants, and short descriptions of the grants themselves. Naturally there aren’t filled-out grants to examine, as that is private information, but this tool allows those interested in exploring grants to make initial connections. Users can search for grants and grantmakers by topic, giving cause, grant type, and location of grantmakers and grant-recipients. This lets users explore the funding available to non-profits and additional contact information to explore the application process.  

Confused about where to start? Sign up for an introductory appointment at jjhill.org.


Written by Jessica Huffman, Business Outreach Librarian, at the James J. Hill Center. If you have more questions about the reference library at the James J. Hill Center please contact 651-265-5500 or [email protected].

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A New Livestock for a New Minnesota

There is no handbook for cricket farming, Eric Palen will tell you. If you want to raise urban chickens there is a way to do that. If you want to start a cattle ranch there are others who have gone before. But when you have founded Minnesota’s first edible insect farm you have to do things the old fashioned way—you have to figure it out yourself.

“[North Star Crickets is] continuing in Minnesota’s agricultural tradition but looking to the future at how food production needs to change to accommodate a growing population, food security, [and] climate change,” says Eric.

The idea for North Star Crickets began percolating in Eric’s mind sometime after 2013 when the United Nations released a report advocating for edible insects as a key component in the future of sustainable food production. As countries become more affluent their demand for protein grows. At the same time, a growing global population means less land to utilize for food production.

We know first hand in a place like Minnesota that raising a protein source like beef cattle requires a lot of land space, feed, and water. What if there was a way to produce protein more efficiently with less space and fewer resources?

Enter the cricket.

Eric has done his research and has a plethora of reasons to support the viability and benefit of farming crickets as a new protein-rich livestock. Not only are crickets superior to cattle in resource usage, they also produce far fewer greenhouse gasses and they are more simple to process—100% of a cricket is edible food as compared to 40% of a cow.

In addition to being a protein source, crickets are also very nutrient dense boasting an impressive combination of iron, calcium, and vitamin B12 among other health benefits.

What do they taste like?

“That is like asking what do vegetables taste like,” says Eric. “There is a whole range of tastes and flavors and applications.”

After harvesting his crickets (which can be done year-round by the way), Eric either roasts a batch in the oven and flavors them for snacking or grinds them into a powder that can be added to or substituted for flour in baked goods.

Since its launch in the past year, North Star Crickets has formed some unique local business partnerships. Eric has teamed up with T-Rex Cookie on a limited run of chocolate “chirp” cookies and Lake Monster Brewing to upcycle their spent brewing grain as cricket feed.

North Star Crickets is the first business of its kind in Minnesota and one of only a handful of other edible insect companies in the nation. That said, Eric’s primary contribution to the edible insect market—his “original thinker” edge—is still emerging. The demand is greater than what he is able to supply. Right now he is looking for an investor and business partner to expand his operation.

In the meantime, Eric is perfecting his process and writing the proverbial handbook for cricket farmers to come.

To learn more about North Star Crickets follow them on social @northstarcrickets.

Written by Christopher Christenson, Program & Event Coordinator, at the James J. Hill Center. Have an idea of a person or organization to feature in this series? Send your recommendations to [email protected].

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Startup Showcase: A hip alternative to avoid backpacking back pain

Two of the most common activities that cause back muscle strains and sprains are summer fitness and long trips. According to an Outdoor Industry Association report almost half of the U.S. population participated in an outdoor activity at least once in 2017. That is a lot of potential sore backs.

HipStar is out to change that with a new, “hip” invention that allows people to travel hands-free over any type of terrain with little effort, literally doing the heavy lifting for you — back pain free.

COMPANY PROFILE

Name of company: HipStar LLC
Website: www.hipstar.net
Business Start Date: 2014
Number of Employees: 3
Number of Customers: 1500 potential customers, as we are at pre-sale phase

ENTREPRENEUR PROFILE

Name: Igor Koshutin
City you live in: Rochester
Country of Birth: Russia
Colleges Attended: Undergraduate work in Electrical Engineering, Moscow Engineering Physics Institute; Russian State Professional Pedagogical University; Russian Foreign Trade Academy

Q&A

Q. What led to this point?

A.  I am the founder of HipStar and have been on the cutting edge of smart solutions for over two decades. My motto has always been to find easy solutions to difficult problems. I spend time carefully studying the market to find opportunities and then work to develop something that will create wide appeal.

Q. What is your business?

A. I developed HipStar, a new type of travel gear: a collapsible hands-free cart for all terrains. It also can be used as a backpack or bike trailer. HipStar will redefine the way people carry on the go. It will change the way hikers, campers, backpackers and other travelers move by literally taking the weight off their shoulders. It is designed to handle tough terrain and reduce carrying weight by over 90 percent.

Designed with an active lifestyle in mind, the HipStar allows users to travel for longer periods of time without having to sacrifice any important gear. It will help people achieve full mobility with only the power of two legs and accomplish physical feats they never thought possible, no matter if they’re young or old.

Q. What is the origin of the business?

A. The idea for HipStar came in 2014 as I was traveling across Europe on business and later with my family. Between the three of us, we had one backpack to carry everything. There was so much to see, but after half a day’s worth of walking around, all I could think about was how the straps of my heavy bag were digging into my shoulders. No matter where and how you travel, even a light backpack begins to weigh as much as a few bricks. You get tired. You get impatient. That’s when the idea for the HipStar was born.

Q. What problems does your business solve?

A. The struggle between packing all the essentials while minimizing total weight has always been a challenge; a challenge that has too often meant having to sacrifice important gear to cut down on weight. Even the best prepared travelers discover that a few hours of carrying a light pack begins to sap their strength, often forcing them to cut excursions and sightseeing trips short.

Heavy backpacks create a forward trunk lean (rounding of upper back), which causes a forward head posture with extended neck, creating a neck and shoulder pain and make it difficult for muscles and ligaments to hold the body up. After a long day on the trail, even 11 pounds will feel heavy no matter what you are carrying it in.

Q. What are you most proud of?

A. Our potential customers are excited about our product. Our passionate supporter, John Pernu from Australia, wrote: “The most versatile and effective hiking trailer! Everything seems to have been included in the design — multiple adjustments, shock absorbing, running, walking or resting flexibility — really impressive!”

Q. What obstacles must you overcome to be wildly successful?

A. To date we spent near $100,000 and we are currently finalizing the product development stage to take the product design even further and seeking for seed capital. Although, we are seeking $1.5 million for the whole project, our immediate needs are to cover and start a product development stage of the HipStar heavy-duty version that would be around $100,000.

Q. How are you funding your business — organically, angel or VC investments?

A. Family and pre-orders.

Q. What is your business model?

A. Collecting sales revenue directly from customers and distributors in exchange for the product. Both Direct and Indirect Sales (tier-1, tier-2) depending on the region/market.

The units will be manufactured after the final CAD Build design is completed. Once the manufacturer has been identified, the company will focus on the fulfillment end of the operation. The intent is to secure a firm that can handle both individual unit sales as well as larger orders for major clients. The users will also be able to order directly from the site and have the unit shipped globally. Outside sales will be handled by commissioned sales personnel who will sell to both individual and regional retail operations.  All national sales will be handled by one of the management team members. We also have been contacted by potential distributors from France, Germany, Australia, U.S., U.K., etc.

Q. What would be success for your business in the next 2-3 years?

A. The potential users of HipStar find the HipStar’s unique design a convenient addition to their activities and the market for HipStar units is diverse, including outdoor recreation equipment, in-town use and specialty equipment.

Q. How did 1 Million Cups St. Paul help you? Did you get valuable feedback? Did you get connected to resources? Did you pivot because of the experience?

A. We needed help finding financing, marketing and introductions to angel investors, so it was a great opportunity to have exposure to those possible audience members.

You can hear from startups like this every other Wednesday, 9-10 a.m. at the James J. Hill Center during 1 Million Cups St. Paul.  Please check the calendar at jjhill.org/calendar for up to date information. The James J. Hill Center is a nonprofit in downtown St. Paul that provides access to business research, educational programming and a place to work. The Hill is open to the public 8AM – 4PM, Monday-Thursday. To keep updated on what startup is presenting next or to apply to present, visit www.jjhill.org

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It All Adds Up: Entrepreneurship 101: You’re Always Learning

October is a month of reflection and new beginnings. It’s a month that is nestled between the leisurely days of summer and the busyness of the winter holiday season. Filled with the beautiful backdrop of nature on full colorful display, October presents a natural opportunity to simply pause.

As I pause and reflect upon what has been a successful year both personally and professionally, there are a few key lessons I’ve learned along the way.

  1. Celebrate the wins – Over the years, I’ve spent more time minimizing rather than celebrating any measure of success that I had accomplished. I viewed success as a measuring stick for what’s next rather than an assessment of progress made. That mindset was the perfect breeding ground for burnout and self sabotage. I’ve since learned that celebrating the wins is just as important as setting business targets and goals. Celebrating the wins opens the door for innovation and growth.
  2. Embrace change – Growth is great, but change has the power to maximize results. Growth has been both exciting and scary. Growth carries excitement because it is a direct reflection of a return on my investment of hard work and sacrifice. Growth can also seem scary because it naturally introduces the need for change. I’ve learned the importance of tapping into training, mentorship and other development resources to facilitate the change process. Asking for help or guidance reduces the uncertainty of change and makes the growth/change cycle manageable.
  3. Have fun – In all of the hustle and hype of entrepreneurship, somewhere along the way I forgot how to have fun. I blurred the lines of when work time ended and family time began. Because I loved entrepreneurship, I carried the work into my down time as if it were also a creative outlet or hobby. Work infiltrated every area of my life. While we know in theory that this practice is a recipe for disaster, this was still hard for me to change. This year I gave myself permission to just have fun. I created time just for play and laughter. Making time just to have fun took away some of the pressure and the stress to produce. Making time simply to have fun reminded me of why I began this journey.
  4. Rest is required – While taking time to rest may seem obvious, it is often overlooked because it is the easiest activity to push aside. Taking the time to rest can seem unproductive or insignificant, but it is quite the opposite. Resting and recharging is just as important as planning and execution. I’m learning to be intentional by scheduling time just for rest. Rest is a key ingredient which positively impacts my energy level and effectiveness as an entrepreneur and a leader.

Entrepreneurship is a journey filled with many lessons and life applications. Here’s to a journey of celebration, change, a little bit of fun and plenty of rest.

I’d love to hear from you.  Send your comments to me by clicking here.

You can read more about Junita Flowers on her website junitasjar.com. You can also follow her on Facebook and Instagram.

 

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A Haunted Hill?

St. Paul is known for its historic buildings, such as the James J. Hill Center. From the houses on Summit Avenue to the Landmark Center, there’s a lot of history here. With such abundant history, comes stories… specifically, ghost stories.  

One of the best-known St. Paul hauntings is at the historic Forepaugh’s restaurant. Originally built in the 1870s as a house for Joseph Forepaugh, this fine dining establishment is supposedly home to a ghost named Molly, a maid who hanged herself after an affair she was having with Mr. Forepaugh was discovered. 

Our employees who grew up in the neighborhood recall hearing stories about the Chauncey Griggs Mansion on Summit Avenue. Built for Chauncey Griggs in the 1880s, the mansion has been both a private residence—at one point owned by Carl Weschcke, who was a publisher of paranormal books and apparently had an interest in the occult—and an art school. One of historic house’s ghost stories is of a maid who hanged herself in an upstairs art studio. (Wait a second, there seems to be a trend here…) 

In 1985, our downtown neighbor, the Fitzgerald Theater, was doing renovations and discovered a balcony no one had previously known was there—and with it, a note written to a stagehand named Ben. Shortly after, tools began moving around on their own, staff began encountering mysterious cold spots, and some could even swear they saw a shadowy figure walking the aisles. 

Of course, you can’t talk about haunted St. Paul without mentioning the Wabasha Street Caves, just across the river from the Hill. These caves were a Prohibition-era speakeasy and hangout for 1920s gangsters, and supposedly, some of these mobsters still hang out in the caves today. 

The Hill Center has had a few eerie occurrences of its own. One staff person swears they’ve seen the chandelier in the Reading Room—the big one by the front windows—swinging on its own at the end of the night. Considering its weight, a chandelier like that is too heavy to sway in a breeze—if there even was a breeze, which is itself unlikely. Another previous employee would always get vertigo in the exact same spot on a catwalk, but never anywhere else. 

More disturbing, a current employee swears they once saw a ghostly apparition! One day after we were closed, our staffperson was standing on the first floor when movement on the second floor caught her eye. It was a woman in a long, black dress. As the employee turned to watch—immediately thinking, “Oh no, a visitor is still in the building!”—the mysterious person disappeared behind a column, never to reappear. While we’re not sure who such a woman would be, you can bet we’re all a little extra leery when it comes time for lights out. 

Are these stories true or just fictions inspired by historic and atmospheric spaces?

 


Written by Ann Mayhew, Reference & Support Specialist, at the James J. Hill Center. If you have more questions about the reference library our our historic collection at the James J. Hill Center please contact 651-265-5500 or [email protected].

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Startup Showcase: Helping First Responders Respond Accordingly

Each month the James J. Hill Center interviews 1 Million Cup presenters for the Startup Showcase feature in the Pioneer Press.  Recently we connected with presenter Nick Tietz. See interview as seen in the Pioneer Press Startup Showcase originally posted on October 6, 2018. 

A 2017 two year study by the Ruderman Family Foundation found that “Disabled individuals make up a third to half of all people killed by law enforcement officers.” And a recent research update by the Treatment Advocacy Center reinforces that “across the United States the unavailability of appropriate psychiatric treatment has forced people with mental illnesses into unnecessary — and too often dangerous — encounters with law enforcement officers, rather than medical personnel.”

Entrepreneur Nick Tietz saw a social need here, a market, and took steps in the only way he knew how — though technology. His ongoing interest in changing lives through technology has ultimately grown into the creation of a vital app that is not only changing lives but saving them.

ENTREPRENEUR PROFILE

Name: Nick Tietz
Age: 41
City you live in: Brooklyn Park
City of birth: Bogota, Colombia
College attended: University of St. Thomas (BA – Journalism and Mass Communication); Minneapolis College of Art and Design – Animation; U of M – Naval ROTC Program

COMPANY PROFILE

Name of company: Vitals Aware Services
Website: www.thevitalsapp.com
Business Start Date: The Vitals app was developed in partnership with the Autism Society of Minnesota. The service was launched August of 2017 in St. Paul.
Number of Employees: 10
Number of Customers: 1,366 Individuals, 26 public safety agencies in Minnesota and Ohio

Q&A

Q. What led to this point?

A. I’ve spent the last 15 years working for myself as a business consultant, technologist, user experience designer, and serial entrepreneur. I’ve designed more than 100 apps, crafted the strategy to help redefine the public education experience at Minneapolis Public Schools, and led multiple innovation efforts at Life Time Fitness to improve the employee experience and define the health club of the future.

Additionally, I’ve spent the past decade donating my time and creative services at PACER Center, where I serve on their Marketing Advisory Board, producing communication videos and helping with the production of their annual benefit.

I’m very passionate about helping others become the best version of themselves. I am focused on building technology that change people’s lives, so profoundly they can’t imagine living any other way.

Q. What is your business?

A. Vitals Aware Services is a new company creating technology for social good. We are makers of The Vitals App.

Vitals is the first and only company to have created a platform based on community created content and apps on law enforcement/first responder phones. Avoiding costly encounters between first responders and people with invisible and visible conditions and disabilities such as autism, mental health, and other disabilities.

Our community has many members with intellectual, developmental, behavioral disabilities and other mental health conditions such as autism, high anxiety, depression, dementia, PTSD, traumatic brain injury, epilepsy, down syndrome, Parkinson’s, fetal alcohol syndrome, bi-polar and schizophrenia.

Q. What is the origin of the business?

A. The Vitals app was developed by co-founders (Steve Mase, Nick Tietz, G.L. Hoffman, Jim Dolan and Rob Zink) in partnership with the Autism Society of Minnesota. We made this business because we were motivated to “give back” after learning about how vulnerable populations are at risk in their communities. Our idea was to give first responders crucial information at critical times, so tragedies can be avoided.

Q. What problems does your business solve?

A. The Vitals app will keep people safe by helping them communicate critical information in real time to police and first responders.

This is a new product offering in a new marketplace that hasn’t been served well. We are solving a major pain point for municipalities, individuals and first responders across the United States and beyond. The Vitals services works across any geographic boundary and is technology agnostic. Our product has been designed to improve existing police workflows, while closing the information gap that exists today between police and individuals in the community.

The more individuals and families that have the Vitals App the faster we can create safer communities across the U.S.

Q. What big obstacle or hurdle did you have to overcome?

A. Our biggest obstacle has been raising money to build this business. We worked on the business for a year before launching it publicly. We have self-funded this business and raised about a million dollars to build the technology and get this business off the ground. We are finally into our first equity round and are seeking additional investors to help us expand faster and move into additional communities across the U.S.

Q. What are you most proud of?

A. Getting calls from caregivers, parents and individuals thanking us for making a product that has saved their lives. When you build a product, you hope that people love it. But when you get to build a product that saves people’s lives, I’m still humbled that we can impact people’s lives in such a positive way.

 

You can hear from startups like this one each Wednesday, 9-10 a.m. at the James J. Hill Center during 1 Million Cups St. Paul. The James J. Hill Center is a nonprofit in downtown St. Paul that provides access to business research, educational programming and a place to work. The Hill is open to the public 8AM – 4PM, Monday-Thursday. To keep updated on what startup is presenting next or to apply to present, visit www.jjhill.org

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Business Plan Resources

Maybe the most overwhelming task that faces an entrepreneur is writing the business plan. Where to start? What data to include? While some sections, like finances and management plan, are hyper-specific to each individual venture, some sections require data that can be found at the James J. Hill Center. Let’s look at three major components: industry trends, competitor list, and market analysis.

Industry trends can be found in the Hill’s IBISWorld subscription. Within each industry breakdown, organized by both NAICS code and IBISWorld-specific specialized reports, IBISWorld provides a five-year forecast of the industry in question. The reports include some product or service segmentation, allowing researchers to learn more about the newest developments in their industry as well as projections forward.

Developing a competitor list for a business plan allows a researcher to better understand how crowded the market is and how much competition they’ll be up against once their business opens. Entrepreneurs can use the Hill’s subscription to A-to-Z Databases to make this a quick and simple task. Use this directory service to search for similar business listings by industry code, estimated annual revenue, geographic location, and employee size in order to locate your peer businesses for broader understanding of the local competitive market.

When it comes to building a customer profile or doing a market analysis, many business plan writers falter at step one: where to find relevant survey information? Thankfully, the Hill offers SimplyAnalytics, one of the premier consumer demographics and behavior databases. Look up information on household buying behaviors, types of media consumed, household demographics and concentrations by geography. You can even map this information to the state, city, or zip code level, then export a graphic to include in your business plan!

Make a Hill Introduction Appointment today at jjhill.org to learn more about the Hill’s resources and classes, and let us take some of the confusion out of finding data for your business plan.

 


Written by Jessica Huffman, Business Outreach Librarian, at the James J. Hill Center. If you have more questions about the reference library at the James J. Hill Center please contact 651-265-5500 or [email protected].

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Moving from Networking to Positive Mentorship Relationships that Last

Have you ever been faced with a difficult decision in your career and you desperately needed advice, but did not know who to call? Nine years ago, I began to understand the connection between networking, mentorship, and my personal board of advisors. When faced with difficult career decisions, I now rely upon my mentorship relationships that have grown into my personal board of advisors.

I first learned about a personal board of advisors while in law school. This board consists of people you trust and can turn to throughout your life when faced with difficult decisions or questions. Before I could begin building this board, I had to have the relationships in place to create it.

When I moved to Minnesota, I did not know anyone. Truthfully, I did not know where to begin in terms of creating a network. I happened to attend an event where a woman was introduced as “the most networked woman in Minnesota”. I figured if anyone could help me, this woman could.

During my first meeting with this woman she changed the way I thought about networking and mentorship. She also introduced the concept of a personal board of advisors. She taught me three lessons that I have not forgotten.

First, I needed to change the way I was thinking about networking. As a young professional, I was thinking about networking as a one-way street for me to connect with someone who could teach me something. I needed to recognize that I had something to offer as well. She told me to never leave a coffee meeting without asking, “How may I support you and your work?”

Second, whether networking or building a mentorship relationship, the foundation is relationship building. Relationship building requires a time investment. Invest the time in getting to know your new connections and what is important to them in their work. If a professional event comes up that may interest them, extend an invitation to attend together. Again, the key is not to think of this as one sided.

Third, for relationships that are thriving, consider adding those people to your personal board of advisors. I had to learn that an advisor does not need to be someone further along in their career or older. Someone starting out or younger may also serve as an advisor. What is most important is that your advisors are those you trust to be honest with you and that they can provide you with different perspectives.

I am so grateful for the people who took the time to meet with me for coffee and eventually become mentors and advisors. As a result of what I have learned through these relationships, I try to do the same for others looking to connect. You never know, your next mentee may be your next advisor.


You can read more about Tisidra Jones on her
website. She will also be moderating the panel for our event Taking the Lead: Lifting Up the Next Generation: Mentorship in the 21st Century. You can RSVP here for the event.

 

 

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Options Abound For Raising Capital

For startups, financing can be challenging, and often the biggest barrier. Each month we’re focusing on a different financing option in Minnesota for startups and featuring experts in the field. 

(This article originally appeared on BetterSMB)

by April Chen

John Funge, chief product officer of DataTribe, left, and Steven Witt, co-founder and partner of the technology venture capital firm, sat down with BetterSMB to discuss ways of raising capital for new businesses. (April Chen)

Raising capital to start a new company can be challenging, but with the right knowledge, the endeavor can be successful. Knowing the nuances of each way to raise money as an entrepreneur can help a business owner decide which is best.

For people seeking to fund a company, the best source of information is an entrepreneur who has a successful business in the same or similar industry, but in a different market, said Steven Witt, co-founder and partner of DataTribe, a technology venture capital firm in Fulton, Maryland.

“The greatest thing about being an entrepreneur is that anyone that’s been one will be of the mindset that they want to give back and help the next generation of entrepreneurs,” Witt said.

When a business uses a venture capital approach to funding, some ownership of the company is given in return for the services and capital provided by the firm. This huge injection of funding enables tremendous gains that would otherwise be impossible.

For entrepreneurs not seeking venture capital funding, there are other approaches.

One of the most risky ways to startup a company is by borrowing against personal assets. Witt did this when starting his first company, so he could pay himself a “salary,” but he came within days of having to sell his family’s second car because he couldn’t afford the car payment. Some entrepreneurs even take the extreme measure of liquidating their retirement savings, which Witt doesn’t recommend.

Another approach to raising revenue is through crowdfunding, using websites such as Kickstarter.com. Since its inception in 2009, more than 15 million people have backed almost 150,000 projects there. An advantage to using websites like Kickstarter is that the investor doesn’t get equity in the company or future profits. Instead, they get the product, or a discount, once it is released. While there may be less financial risk in funding a business using this route, if the promised product is not delivered, the entrepreneur keeps the capital but it’s almost certain this entrepreneur will never be able to sell anything again. It has the potential to ruin someone’s reputation.

“One of the top reasons these types of endeavors fail is that a supplier that the businessperson negotiated a deal with either goes out of business or changes the terms, making it impossible for the creator to deliver the product to the crowd funders,” Witt said.

The Small Business Administration can help small firms get financing by guaranteeing loans. It also licenses small business investment companies, which are private investors who can make loans, invest in a share of the company, or do both, with federal backing.

John Funge, DataTribe’s chief product officer, said the businesses that would best utilize this method are those opening a franchise where there is already a predictable model, marketing and other resources that have previously proven themselves to be successful.

“Entrepreneurs need to be really thoughtful about their life stage and their future financial obligations since startups can put extreme stress on a family and personal life. Someone in their 20s likely has more to lose than someone in their 40s who is more established financially,” Funge added.

Business owners can also seek angel investors, who are sometimes found among especially wealthy friends or family. Angels often invest on more favorable terms in comparison to traditional lenders. They often look for something in return for their investment, such as a seat on the board of directors or participation in day-to-day operations, according to the Small Business Administration.

Regardless of how an entrepreneur obtains funding, Funge said business owners should line up two professionals to help their business get the right start.

“Founders of all stripes should find an accountant and a lawyer that they can work with who specialize and can serve as trail guides for starting the company,” Funge said.

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