Metropolitan State University in St. Paul was the site of the second of three Summer Venture Camps on Thursday morning. You can read about the first one Jawed Karim And Paul Knapp Are Highlights Of Summer Venture Camp Session 1.

Put on by The Collaborative, the intent of these panel discussions is to, “… help fuel and inform the ‘next generation’ of innovators while also following The Collaborative trademark of providing information and networking to help entrepreneurs grow their businesses.”

Here is a list of the morning’s four topics and the main points emphasized:

Cash is King: Managing cash flow in emerging growth companies

• Profitability is great, but it doesn’t solve your cash flow problems.
• Best way to manage is to constantly stay on top of cash flow; check every day so you don’t have surprises. Larger companies have more complex cash flows, but the same principle applies.
• Qualify your new customers. Set payment terms and credit limits. Follow up on slow payers. Offer discounts to get customers to pay more quickly. Offer credit card payment. Impose finance charges for late payments (and also use as leverage.) Make every effort to convert a sale quickly into cash in the bank.
• If you need a business partner, find one to whom you are just as important as they are to you.
• Remember: your bank isn’t an investor or partner; their business is to minimize risk. Show them credibility and that you understand the whole financial picture.

Due Diligence

• When writing your business plan, make sure you have your “story” together. Often a power point with supporting schedules will suffice, along with an excellent executive summary.
• Main 3 things to have down: 1. What’s your unique thing, and will people pay for it? 2. How big is your market opportunity; who is your universe of buyers? 3. MANAGEMENT. Experience is often critical to getting financial backing.
• Regarding intellectual property, don’t put all your resources into first patent right away, because the design might change and you might need more money to pursue a different patent

Valuation and Negotiation

• The earlier the stage of a company, the more subjective the valuation process.
• Same main points are looked at as above: 1. MANAGEMENT TEAM. Make sure they have the experience needed to lead the company. 2. Your proprietary property/technology. 3. Value proposition: what is the benefit customers receive from using your product? You must be able to say this in one or two sentences. 4. Prove you have a large, and growing, market.
• Sit down and figure out where you want your company to be in the long term. Start with the end point in mind, and then work back from there. Know what you need to do, and when, to achieve your big goal. It will help you stay focused and on the right track.
• Whether raising capital or closing the sale, it is very helpful to really understand comparable companies. Help educate those in the process. Though difficult with emerging industries, it sometimes helps to find older companies and work back to when they were young to compare with where you’re at. Usually there’s some company that is in a comparable field.
• You can use terms to make venture capitalists more comfortable. Most like participating preferred stock plus share in proceeds.
• Make sure the differences in terms between rounds of financing don’t cause conflict.
• If you can get financing from yourself, friends and family, DO!

Economic Development and Venture Creation in the Twin Cities and Outstate

• This was not an interesting discussion. I didn’t get anything from it, and many people left.

For me, a woman entrepreneur, the Summer Venture Camp has been worthwhile. Not all the topics have been pertinent to me, but

1. It has been very good to see and hear the participating panel members, many of whom are leaders in the business community.
2. It is good to hear basic advice given, with slight variations, on how to present oneself capably to bankers and investors, and how to set up your company for success.
3. It is worthwhile to become familiar with the entrepreneur community and its support organizations in the Twin Cities.

The third and final session will be August 7 at the Humphrey Center at the University of Minnesota.