Making Your Dream The Banker’s Dream
All of us seek some patron to see our visions as we see them and invest in those dreams. But alas, the boys with the money most likely lack your personal enthusiasm in your product’s or your company’s future. Banks and venture capitalists want to hitch their wagons to an already rising star, and they will scrupulously examine the booster rockets to make sure it keeps ascending. Your job then becomes to set your business enticingly out on the runway and make it seem the investment opportunity of a lifetime.
For the high tech firm, whose whole industry has only recently winched its reputation out of financial morass, this is indeed a daunting challenge. How does one accessorize what must appear as "just one more software company" so that public or private funders will hazard a glance? This is the subject of "Making Your IT Company Bankable," a seminar taking place on Thursday, January 27, at 4 p.m. at Merrill Lynch on Roszel Road in Princeton. Cost: $440. Call 856-787-9700 or visit www.NJTC.org.
Sponsored by the New Jersey Technology Council, this seminar is moderated by attorney Rick Pinto of Stevens & Lee, a firm with offices at 600 College Road, and speakers Carl Kapfinger, vice president of technical financial services for Cherry Hill’s Commerce Bank; Phil Davis of Keyport’s Delphi Consulting Group; and John Lee, principal in the Griffin Financial Group of Philadelphia. The discussion is designed for companies in all stages of development.
"There are no more excuses for high technology companies," says veteran special projects banker Kapfinger. "Venture capitalists are again opening up their wallets and Thompson Economic studies undeniably show a last quarter increase in high tech funding." It is an investment trend Kapfinger has followed with keen interest for the last 25 years.
A Pennsylvania resident, Kapfinger holds a B.S. in biology from Allentown College (Class of 1977). Shortly after graduating he turned to lending studies and joined Philadelphia’s Girard Bank, which was soon bought up by Mellon Bank. The dozen years with Mellon and three more with PNC set Kapfinger in charge of major corporate accounts such as Conrail. He then moved to Progress Bank, where he specialized in launching high technology firms. Now with Commerce Bank, Kapfinger works on providing funds to both startups and growing companies. "It’s very exciting," he says. "You really feel as if you are helping bring forth one innovation right after another."
Yet no matter how new the product or company, Kapfinger insists the old business rules apply, and if you want to get funded, you had better adhere to them.
Be a business first. Long gone are those angels of the l980s who would invest in almost any idea if it seemed technologically complex enough. Now even the most exquisitely designed and saleable prototype gets turned down if it hasn’t got a strong business structure bringing it to market. This means, like any other service or manufacturing business, early-phase companies had better hammer out an exhaustive business plan, come up with capital tables, a cash flow and burn schedule, and be able to swiftly respond to every item on the term sheet. The more due diligence performed on yourself beforehand, the more attractive you are to bankers.
Picture your banker as a person with a very small and busy hammer. He will constantly keep tapping away to find holes not just in your product, but in your previous financing, management capacity, and even your relationship to the board of directors. If you have already given away the store to get your initial startup capital, no future investor will want to get in the middle of what could be a sticky bout between financier and owner. So do some tapping yourself, warns Kapfinger, and patch up the holes before meeting with lenders.
Skip the window dressing. About 15 years ago it became very popular for startups to dress up their boards with name experts. When it came time to merge or sell off, having a roster of names that spoke of great financial prowess, proven investment track record, or even renown technological ability really boosted the price. But today, while some corporations may be impressed, banks are not.
"Of, course we like to see an applicant who has a substantial team behind him," says Kapfinger, "however, we want to know exactly how active these people are in your project. Are they spread too thin to be of any real use to your company?"
Venture capital firms and banks have different goals. In the hunt for funding, the main caveat is to note what each lender wants. Banks seek long-term relationship. They provide a lower rate, and once the relationship is established, they may more be more easily nudged into a loan based on your past track record. The venture capital company wants your new project to succeed swiftly and very profitably. It may well want to take a substantial ownership interest, and will want to see a return on investment in a relatively short time. And while the venture firm may be willing to give you all you ask, with fewer questions, it may want to place major decision makers on your board as watchdogs of its own best interests.
Avoid cash burn blunders. Some start-ups, for example "spend far too much on marketing before they’ve even got anything to sell," says Kapfinger. Prodded by initial investors looking for a quick payback, many new firms make the mistake of putting great amounts of resources into marketing before they have a full business structure in place. This scarcely gives future investors the sense of risk control they desperately seek.
While attorney and seminar moderator Pinto agrees that reduction of risk is mandatory, he sets priorities a bit differently. From Pinto’s experience, the main high tech cash burn blunder is spending too much initially on technological development – honing the best product and forgetting about everything else. He sees an "if you make it customers will come" philosophy as a recipe for disaster.
"If you want to be loan-attractive, get your distribution and income-generating plans going first," Pinto insists. "Go beyond filling a niche and get actual customers, then bring this evidence to investors."
Morristown native Pinto graduated from Yale University in l975 with a major in psychology and 18 other courses of study to, as he puts it, "make myself a Renaissance man." Following a University of Virginia law degree, he came to practice in Princeton and now, as head of venture, technology and entrepreneurial practices for Stevens & Lee, he gets a bit of his Renaissance dream by seeing world-changing innovations almost daily.
Strive for baby step successes. "Capital companies today are focusing strictly on results," says Pinto. "The more you have done right in the past, the more they feel their risk is reduced and the more they will support you." Thus even if you are starting from zero and heading for possible success, he suggests that you set yourself up a series of milestones and meet them, thus creating at least a brief track record for the investor to hang his hopes on.
It is never easy to squirm before the folks sitting on the money bags. It invariably seems as if they are overdressed and omnipotent. But before your hands begin to sweat, take comfort in two thoughts: First, these people are only going to be interrogating you with questions you should have already considered yourself. Second, they do not hold the fate of your business in their hands; they can only deny you this particular loan.
– Bart Jackson
For Job Hunters, Two-Day Workshop
Out of work? Feeling sad about your job loss? Project Re-Employment, a two-day program offered by the Jewish Family and Children’s Services, and funded by the United Way of Mercer County, can help you get on the right track.
Project Re-Employment sessions are offered every other month at the West Windsor Library. The next two sessions are scheduled for Friday, January 28, and Friday, February 4, at 10 a.m. Contact Debra Levenstein at Jewish Social Services at 609-987-8100 to register for the free program.
The sessions are led by Rachel Bronstein, who by day serves as the district school social worker in the Fair Haven public school district. Bronstein started as a full-time employee with Jewish Services in 2000 but left after several years to pursue school counseling. Bronstein has a B.A. from Boston University and a master’s in social work from Rutgers. She is a licensed social worker who grew up in New Jersey and lives in Freehold. Project Re-employment remains close to Bronstein’s heart, so she continues the program she has led for four years when she was with Jewish Family and Children’s Services.
"My two goals," says Bronstein, "are to give individuals insight into what kind of job search strategies they need – skill sets like how to go to an interview, how to act professionally, how to have a resume that gets a little more attention, how to network. Also to provide a level of support so that they know they are not alone in this process. There are others out there and there are many resources out there. We can work together to help them be successful in their job search.
"As a professional, it’s easy to think that you know how to go on an interview, but when you actually preview the questions that can come up, how you answer those questions is another matter. The program is excellent in terms of helping these individuals come together as a group, flesh out these issues that come up in their job search, and support them in their feelings."
Although Bronstein has never been unemployed, she says, "I’ve had family members who have been and that’s why this program is near and dear to my heart. I’ve seen what individuals go through when they’re unemployed and have to pay bills, and have to find a job and balance a family – it’s a lot of work. So I use that experience to create my curriculum and to guide me in this process."
Based on the number and types of individuals who attend, Bronstein tailors the session to each group’s needs. If the attendees already have resumes, for example, she may spend more time focusing on interviewing skills.
A feature of the program is advice from outside speakers, individuals such as Scott Dingwall from Consumer Credit Counseling Service, who addresses handling finances during unemployment. Jessie Phillips of the New Jersey Department of Labor shares her expertise. "Job coaches, temp agencies," adds Bronstein, "anyone who might be able to offer their professional experience to guide our clients in figuring our their next step."
While in the past Bronstein has had to turn people away, she feels fortunate right now that the groups tend to be smaller, which she attributes to more people finding similar services as well as being able to find employment faster. "Smaller groups allow for individualized attention and permit me to really focus on any concerns that might come up," she says. "On the other hand, larger groups tend to come up with a greater number of ideas when people brainstorm."
During 2001-’02 the program had been funded through a grant designed to help retrain people left unemployed by the events of 9/11. It is now funded entirely by the United Way.
There is a misconception that participants have to be Jewish to attend. "Absolutely not," says Bronstein. "One of the advantages of Project Re-Employment is getting people of different religions or ethnic backgrounds together. It runs the gamut of levels of employment, as well. In the beginning we tended to have middle to upper level management people in the group. But over the years I’ve seen laborers, CEOs, artists. Two years ago everyone I saw was in information technology. Now I’m seeing professionals who have been working in a chosen field for 10 to 15 years. They don’t know what to do next – continue to look for work in their current field, pursue another field, or go back to school."
"What tends to happen and what I love about Project Re-Employment is that people tend to connect when they enter the group. Sometimes people eat lunch together or go out for coffee to continue their conversations. Twice a year we have a reunion for anyone who has participated in the program over the past four years. Sometimes we have a formal guest speaker and sometimes we just have informal networking discussions. People who were unemployed three years ago may be going back to school now to get a degree. Someone who was out of work a year ago may now be gainfully employed and return to share that information. It’s also open to individuals who are still unemployed who may be looking to network, for suggestions, and for a little support."
For those who can’t make the upcoming sessions, Bronstein has the following suggestions:
Think outside of the box. Be willing to try different approaches when searching for a job. Use your creativity to pursue a new career path, write a resume and cover letter, and answer interview questions.
Research. If you are uncertain about what career path you would like to pursue, do some research. The Internet and library are excellent resources to finding different jobs. Talk to people who do what you would like to do.
Network. A great many people find unadvertised jobs through people they know. Networking, says Bronstein, is the best way to find a job, so tell everyone that you are looking for a new job, and ask them to pass the information along. Talk to everyone you know and everyone you don’t know. You never know who will know the person who works for the company that you would like to work for.
Take care of yourself and those you love. In times of transition, it can become difficult to see a positive path to your next job. Be sure to keep taking care of yourself physically, emotionally, socially, and spiritually. Family, friends, and mental health professionals can be helpful resources to you. Having a calm and positive outlook will only help in your job search.
"Don’t think that you are alone in this process," says Bronstein. "There are others out there who are feeling sad, or feeling stress because they are through the same thing. Since networking tends to be the best way to find a new job, be willing to come out to a program like Project Re-Employment. Take a chance. Any group or organization could help you get your next job. You never know what you’re going to learn or who you’re going to meet. Put yourself out there."
– Fran Ianacone
Secrets of Smart Marketing
An engineer, a "numbers person," an online columnist, a radio talk show host, and a business consultant with specialties in marketing and organization, Liz Lynch is also the author of "102 Secrets of Smarter Networking," a 20-page booklet designed to guide even the shyest in making connections.
Lynch talks about her networking techniques on Monday, January 31, at 6 p.m. at a meeting of the Middlesex-Somerset Chapter of NJAWBO at O’Connor’s Beef `n Chowder House in Somerset. Cost: $45. Call 732-873-3240.
Lynch attended the University of California at Berkeley, where she received a degree in engineering. "I knew I would never actually work in engineering," she says. "I knew I could never just be in a lab or a roomful of computers. I wanted to be in the business world." While still in school she interviewed for an investment banking position with Goldman Sachs. "They brought me out to New York City. It was the first time I’d ever seen it. When I flew in at night and saw all the lights, I said, ‘If they offer me this job I’m taking it!’"
At Goldman Sachs Lynch evaluated financing options for owners of major commercial real estate properties. She then worked for Disney/Touchstone Pictures, assisting with financial planning, talent contracts, and project development, as a consultant at Booz-Allen & Hamilton; and then took a position at Money magazine, where she worked in administration in the ad sales department. She has also worked in Time Inc.’s corporate strategies group and at Internet ad firm DoubleClick, where she helped launch a new division.
Along the way she received an MBA from Stanford University, but she never found a job that allowed her to use her broad range of skills and interests. "I was thought of as a numbers person, and you don’t talk to the numbers person about marketing ideas. I wanted to stretch my creativity."
To that end, she opened her own business, Consult Ad Hoc, some five years ago. The company, based in Manhattan, is a profit advisory firm designed to help growing companies increase financial performance and maximize growth opportunities. She is also a columnist for TheSquare.com, an online networking site for students and alumni "of the world’s top universities," and has created and hosted a live radio talk show, "Analyze This."
A pro networker, Lynch says that her "number one secret" is to start networking before you need it. "At some point everyone will lose a job, or lose a client, or just have the phone stop ringing," she says. "Then you have an air of desperation about you and people can smell that." It is much better, she stresses, to have your network in place before you are desperate.
Networking, she says, is about making quality relationships. The kind of relationships "that can help you land the big sale, find the perfect job, or look like a hero take time to build."
Lynch’s book is only 20 pages long, "small enough to put in your purse or your briefcase and refer to it," she says. It includes several pages at the back for making notes on the contacts.
Here are 12 of Lynch’s tips for networking:
Get comfortable with self promotion. There’s no getting around talking about yourself in networking. Develop a clear message about what you do and practice to help you build confidence.
Don’t expect to close on the first contact. It’s rare that you’ll meet anyone who happens to know of work for you. Be prepared to work at building the relationship so that you’re at the top of their minds when they do hear of an opportunity.
Strive to make a good impression. Be gracious and polite in all of your interactions. If you’re in a bad mood, either hide it or stay home.
Create multiple levels of your introduction. Start with a compelling one-sentence introduction that includes your name, company, who you help, and with what problem. If asked for more information or if you have more time, you can go to a deeper level of detail that describes a typical situation, your solution, and the result.
Focus on how your clients benefit, not on what you do. Saying "I write business plans" has less impact than saying "I help start-ups build a compelling case for potential investors."
Say that you are looking for advice, not leads. Initial contacts are more likely to be able to help you with your elevator pitch than to connect you with a live prospect, but the point is to get in front of as many people as possible.
Reconnect appropriately. It isn’t reasonable to call people you haven’t spoken to in three years to ask for introductions to their CEOs. Invite them to lunch first to catch up and discuss ways to help each other’s business.
Join groups. Organized groups can put some structure around your networking. Consider joining at least one or two to expose you to new people and new ideas on a regular basis.
Don’t engage in debate. If you make a suggestion that isn’t met with interest, don’t force it. Your goal is to start conversations to gauge similar interests and determine if a follow-up meeting is warranted, not to convert others to your point of view.
Ask a smart question of the speaker during a presentation. It will get you noticed by those in the room and will give people a reason to start a conversation with you.
Make other people the priority. Ask about their businesses before launching into your introduction. Ask for a business card before offering yours.
Keep your promises. If you have offered to send a brochure or a contact name, do it immediately.
Finally, says Lynch, in the case of networking, practice makes perfect. "Your approach to networking is as important as what you actually do," she says. "Start with the right attitude and expectations and practice as much as possible."
– Karen Hodges Miller
Finding a Tech Job
Downsizing, outsourcing, changes in how companies are running their businesses, and even technological developments have all affected the climate for technical careers in New Jersey. To stay employed under these circumstances may require concomitant changes in how employees think about current and potential jobs, according to Alice Preston. She is president of the Usability Professionals’ Association, New Jersey, a group that represents engineers and other professionals involved in the work or making sure that devices, and especially electronic devices, are as easy to use as possible.
Preston presents her own experience as a case in point. As companies are becoming more concerned about bottom-line results than long-term allegiance, usability engineers like herself have suffered. Because usability may not result in immediate sales, many companies are willing to make do with "good enough." As a result, Preston, who works for Telcordia Technologies, and others in her profession have been thinking about how they can share information about "how we are adding value."
Preston speaks on "Technical Careers: Looking Forward" as part of the Tech Talk Series at the Princeton Public Library, on Tuesday, February 1, at 7 p.m. For information, call 609-924-9529. She shares tips about how to deal with the current technical job market in New Jersey:
Use the resources out there to spot opportunities. An excellent Bureau of Labor Statistics website is a great place to begin. At www.bls.gov, click "Occupational Outlook Handbook" under "Publications and Research Papers." Each entry in the handbook describes a different occupation, including its significant subsets; its working conditions; its job outlook, with employment projections through 2012; information about training, qualifications, and advancement; potential earnings; and sources of additional information.
Be realistic about employment opportunities. It may be difficult, for example, to change technological areas. "Although pharmacological companies are relatively healthy, I work in telecom, and you can’t cross," says Preston.
Think differently about what you do and would like to do. Start with the Myers-Briggs psychological evaluation to help you understand your personality type. "Everybody laughs," says Preston, "but when you really like what you are doing, you’re much more likely to succeed."
Reinvent yourself in a different job area. "There are jobs now with titles that we never heard of three or four years ago," says Preston. "There’s also more going on technologically in government."
Preston offers numerous examples of creative thinking about the current employment market. "If you are designing web pages, you may have to take coding classes in another language. If you’re doing usability and tucked into a cocoon-like big company, know that user experience in other contexts is still big."
Technical needs peak and then normalize. For example, the demand for people to create websites waxes and wanes. So graphic designers might need to broaden their skill sets to do graphics in another context, by learning html, by working on the print side of graphics, or, if they have the aptitude, by leading teams in areas like marketing or technical communications.
An employee in a software company with excellent language skills might consider coordinating offshore teams. With downsizing, career counseling jobs may also open up. These other possibilities, says Preston, "may not be your first choice, but may still be something you can do or do well."
Drop back to an earlier position. "Now a I’m usability engineer," says Preston, "but formerly I was technical communicator." In order to keep her job she has worked again on help systems and the like.
Start your own company and consult. "Although the hourly rate for consultants has gone down in some areas," says Preston, "the upsides are that you are your own boss, you make your own hours, and you can combine income from a number of different client companies." As a consultant, you diversify and are not dependent on the fortunes of a single employer.
Think big and think creatively. Preston shared one innovative solution to outsourcing. When one of its big customers decided to outsource, a human factors engineering company, a concern working at projects involving product usability and effectiveness, outsourced, too. "Business realities are business realities," says Preston. "If you try to work in business, you need to understand the ground rules that the big businesses are playing by."
Think about relocating or going virtual. "Things may be moribund in some sectors in New Jersey," says Preston, "but maybe in the same or a different sector in a different part of the country, they are booming."
People have to figure out what things they may be willing to change and ask themselves questions like: How badly do you not want to move? Considering a move might, in fact, be stimulating. Considering different fields might be freeing. Either of these options could become an important stepping stone.
Preston’s own career path has been one of adapting to available opportunities. With a double major in math and music from William Jewell College, Preston says ruefully, "Even then I was hedging my bets." After college, she began teaching music at an elementary school, then, when 660 teachers were laid off, she taught remedial math to fourth to eighth graders at a rural school. She then worked for what she calls "the McDonald’s of piano teaching," which went belly up when the owners tried to grow it too fast.
So how did she get involved with computers? As a temp, she was typing a manual that included binary, which she knew from her mathematics background, and she started asking questions about its content. That eventually got her a permanent job with the company, and in 18 months she was installing turnkey systems for laying out newspaper editorials and classifieds and training people to use them.
From there she moved to long stints at Mathematica and RAMIS. But, each time, coincidentally while she was out on maternity leave, the company changed hands. It had happened to her before, and after the third time, she said "no more!" and became a consultant. But, in 1993, she gave full-time corporate life a try and signed on to work for Bellcore, which is now Telcordia.
"My own career is an example of going with the flow," she says. "I’ve been a usability engineer for about seven years; I’m a people person so I like usability better than technical writing."
And, after all, work isn’t everything, as long as you’re making enough to feed and clothe your family. Last year Preston did something for herself – she got certified to teach yoga. "It didn’t do much for my income," she says, "but it helps my blood pressure. Doing these classes, I feel like I’m really helping people."
– Michele Alperin
Health Watch: New Pediatric ER
A new pediatric emergency department opened earlier this month at the Bristol-Myers Squibb Children’s Hospital at Robert Wood Johnson University Hospital in New Brunswick. The new, $5.9 million pediatric emergency department was designed with the needs of children and families in mind, with its private patient treatment areas, dedicated family waiting and play area, and what is described as a "whimsical" decor.
The new department is staffed by board-certified pediatric emergency doctors, pediatric nurses, and ED technicians, with all the resources of a state-designated children’s hospital and Level One Trauma Center at its disposal, 24/7.
"An adult emergency department is no place for a child. Children deserve their own emergency room, and they deserve a medical staff whose sole focus is children," said Daniel A. Notterman MD, physician-in-chief of the Bristol-Myers Squibb Children’s Hospital at Robert Wood Johnson University Hospital, and chairman of the Department of Pediatrics at UMDNJ-Robert Wood Johnson Medical School.
"Our new pediatric emergency department ensures that every child is seen by board-certified doctors and nurses who specialize in the care of children. And for children requiring serious intervention, the Bristol-Myers Squibb Children’s Hospital at Robert Wood Johnson University Hospital offers the full spectrum of comprehensive pediatric specialties and subspecialties."
Increasing to almost 8,000 square feet from 1,000, the new pediatric emergency department includes 12 private patient care areas, a trauma room, a family waiting room, and play area with games as well as age-appropriate television, and a nourishment station with a microwave and refrigerator stocked with juices and ice pops.
Aniyan, a seller of specialty South Asian food items, donated all proceeds from its sales last Sunday, January 23, to the American Red Cross International Response Fund South Asia Tsunami Appeal. Fresh Grocer, a Philadelphia store at 40th & Walnut, matched the funds.
Produced in Kerala, one of the regions in southern India affected by the disaster, Aniyan’s products are distributed in the United States by John Chandy, a former resident of Kerala who had a store at Princeton Forrestal Village. Aniyan’s line is carried in Princeton by ShopRite. Among the items available are curry sauces, frozen dosa and idli batter, samosa shells, fresh samosa, masala dosa, biriyani, and more.
PNC Bank donated $1,000 to the Lawrenceville Historical Society when, after a renovation that adhered to historic preservation standards, it reopened its Main Street branch in the former 1818 Cracker House.