XML Changes Everything

Add the Government to Your Client List

Corrections or additions?

This article by Bart Jackson was prepared for the November 28,

2001 edition of U.S. 1 Newspaper. All rights reserved.

Venturing Forth For Capital

One year ago Cross One Venture Partners finally said

it: "The emperor has no clothes." This huge venture fund had

raised over $1 billion for a new high tech project. Then, after

analyzing

the market, Cross One abruptly announced "No." It stated the

blatantly obvious secret, which was that growth mania had pumped up

the stock markets so high, so quickly without any solid foundation,

that further ventures were risky to the point of foolishness.

Cross One walked away and almost overnight venture capital shops

boarded

up.

That was the death knell and the funding picture remains bleak indeed.

Yet for those seeking seed money, there is still some hope. Venture

capitalist Fred Beste will discuss "Surviving Venture

Capital’s

Nuclear Winter" on Wednesday, December 5, at noon at a meeting

of the New Jersey Entrepreneurial Network (NJEN) at the Forrestal

Hotel. Cost: $45. Call 609-279-0010.

Managing partner of North Philadelphia’s Mid-Atlantic Venture Fund,

Beste will seek to show entrepreneurs where to find and how to court

those few and skittish investors still willing to fund all levels

of development.

The non-profit New Jersey Entrepreneurial Network offers an excellent

avenue of advice and contacts for new business folk. In addition to

providing mentoring guides for all size companies, it hosts

informational

seminars the first Wednesday of each month at the Forrestal Hotel.

As for their networking abilities, they claim that more than 11

percent

of their members have obtained funds through NJEN Angels. To view

the Angels list, browse www.njen.com/njen_angels.htm. To learn more about

NJEN, phone Robert Frawley at the above number or visit them

at www.NJEN.com.

"I have been in this business since l968," says Beste,

"and

I have never seen the funding market this grim. A `nuclear winter’

is no hyperbole." Frightening words from a man so immersed in

the business of capitalizing.

After a boyhood in Baltimore, Beste moved south to Florida’s Stetson

University. While Beste was obtaining his liberal arts degree, the

booming businesses of the 1960s were finding their funding needs met

by a new vehicle: the venture investment firm. Upon graduation, Best

joined on with a venture company and has never left the industry.

After seven years with investment firms in Washington D.C., then nine

in Kentucky, Beste came to Philadelphia and founded Mid-Atlantic

Venture

Funds, which he has run for the last 17 years.

Beste points out three major factors contributing to the "nuclear

winter" of venture capital opportunities. First, as Cross One

Funds so poignantly pointed out, the market climbed too swiftly,

setting

itself up for a fall, which came with an undeniable thud in the spring

of 2000. Then the telecommunications industry ran into serious

problems.

"No telecommunications company," says Beste, "has sought

capital for anything more than building heating oil in the past

year."

The final withered lily was the information technology business.

"Info

tech, well, frankly, the business stinks," says Beste with a shake

of the head, "and we all know it. We all thought the tree was

going to grow through the sky. In retrospect, what is amazing is that

the Internet mania got as high and lasted a long as it did." The

problem is that the entrepreneurs must still scour the desert in

search

of an oasis. Businesses still need to expand to fulfill customers’

needs. And while investors may have gone underground, business demand

remains. So how does today’s business person ferret out capital for

tomorrow?

Follow through on seed funders. Typically in the past

two "good times" decades, the entrepreneur sought seed money

from a "Round A" source. Then several months later, after

clients were in place, the new business would turn to a "Round

B," and then a "Round C" firm for expansion investment.

Beste advises that, since all these later-end venture capitalists

have hidden away in caves, your best bet is to make a permanent friend

and agent of any investor you have. Keep your seed-money funder and

strive to get him to invest more money as you expand. It will be much

easier than trying to convince a stranger later on.

Starve yourself to success. No longer can the would-be

business owner quit his $80,000 a year job at Acme Hi-Tech and hope

to draw a $120,000 salary from his newly launched brainchild. Expect

to pull in your financial horns and scrape by on $30,000 for awhile.

Also, glitzy is gone. Venture firms now love low overhead.

"Five guys working like hell in the back of a garage," says

Beste, "look a lot better to me than some fool who has moved his

start up business into the best suite in town. That sort of

squandering

of precious capital does not come from a person in whom I’d like to

invest."

Invest your own cash. "It’s back to basics," says

Beste. "Venture capitalists are willing to put up the lion’s share

of the cash for a lamb’s share of the profits. But we are no longer

willing to put it all up." Investors want to see a commitment

of more than ideas and time. A second mortgage makes a lovely business

presentation.

First launch the ship, then invite investors aboard. The

most attractive business profile is one where a few partners have

pooled resources, and begun the business on their own. As they start

up, they contact a funding firm not for investment, but merely with

an invitation to watch them grow. Then, after a few months of struggle

and some success, the entrepreneurs look infinitely more solid and

attractive to the men with the purse strings.

Explore new fields. With the telecommunications and

information

technology fields barren, investors are definitely looking to rotate

crops. Beste points to the example of health care; an industry that

was throttled down from 25 per cent of the nation’s investment venture

funds, to near nothing in the past two years. Here is an industry

still holding 14 percent of the nation’s cash flow. Now, with

information

technology out of the way, its potential shines a little brighter.

The sharp entrepreneur might do well to seek a similarly

under-invested

field.

Beste does not deny that America and many other nations have

gone into decision paralysis following the events of September 11.

Yet consumers are still buying, workers are still drawing salaries,

and business niches remain to be filled by clever souls. Investors

may be stunned by this final frost of the investment nuclear winter,

but they will emerge from this temporary hibernation. Our money will

not lie idle for long.

— Bart Jackson

Top Of Page
XML Changes Everything

Technological change pauses for no man — or company.

Despite tragedy and recession, the pace of change just keeps

accelerating.

Companies that don’t keep up may cease to exist, yet many are too

busy with day-to-day survival to step back and look at the big

picture.

Mercer County Community College is sponsoring a series of Technology

Breakfasts to provide a forum for assessing important trends. Next

up is XML. "XML is going to change everything. It’s going to bring

the web alive," says Jay Gandy, assessment specialist with

MCCC’s IT Centers.

Gandy is organizing a Technology Breakfast, "XML: Business Impact

and Opportunity," on Wednesday, December 5, at 7:30 a.m. in MCCC’s

administration building. The free event is designed for CIOs, CTOs,

COOs, technology managers, and planners. Call 609-586-4800 ext. 3634.

"A lot of people see XML as a language, but really it is a system

for defining other languages," says Gandy. The current profusion

of computer languages means many devices cannot "talk" to

one another, or exchange information with databases, limiting the

usefulness of the Internet. With XML, these barriers are erased.

Gandy points to CNET (cnet.com) as a good source of basic

information on XML, also known as eXtensible Markup Language. The

site explains that XML solves the Internet communication problem

because

"rather than specifying where to display something, Web builders

will be able to specify the structure of the document. For example,

you can specify the document’s title, its author, a list of related

links and so on. Then any device with an XML browser — a palm

top computer, a set-top box, or workstation, for example — will

be able to render a version of the document specifically tailored

to that device."

Going beyond the Internet, XML, says CNET, has a role in "serving

the publishing industry at large, for example, and especially people

who produce documents intended to appear across multiple media."

Another useful website for XML information is

www.gca.org/whats_xml.

MCCC’s Technology Breakfast gives area companies a chance to figure

out just where XML fits into their own operations. Gandy says decision

makers "get to sit down and hear someone say `you’re going to

get hit with a tremendous opportunity’." This opportunity, he

says, turns into requirements. Companies may say "this is great,

but what do we need to do to get up to speed?" The answer, says

Gandy, often is training.

The dot-com crowd missed the boat, in his view, because "the

Internet

is not a new business. It enhances whatever business you’re in."

XML adds further enhancements, and expands opportunities to capture

market share and better serve customers and constituents of all kinds.

Grabbing the advantage the Internet provides means companies need

lots of trained IT professionals.

There will be a whole new white collar workforce made up of all the

people needed to keep company websites up to date and working, says

Gandy. These web developers and networkers will need training, but

do not need a college degree.

While Gandy is at pains to stress that the Technology Breakfasts exist

to explore big picture issues, and are not directly tied to any

training

offered at MCCC, the college does provide IT training. It is part

of the Central New Jersey Centers for Workforce Excellence in

Information

Processing, which provides a series of training programs designed

to expand and enhance the pool of IT professionals in Mercer and

Middlesex.

The catalyst for the establishment of the IT Centers was a $3 million

workforce development grant from the Department of Labor to the Mercer

County Workforce Investment Board, and is being administered through

a joint effort of Mercer and Middlesex community colleges and the

Workforce Investment Boards in each county. MCCC is the lead

contractor

servicing the grant through its Division of Corporate and Community

Programs.

Ray Ingram, director of the Division of Corporate and Community

Programs, says that despite a slowing economy there is a growing

market

for IT professionals, particularly those new white collar workers

who develop and maintain communications within companies.

Gandy, who works under Ingram, says most of the individuals training

at MCCC to fill these jobs are in their 30s and 40s. Some have been

downsized. Others are looking for new careers. "We even have one

Ph.D.," says Gandy.

Gandy came to MCCC when it received the workforce development grant.

He describes his career as "eclectic." He watched the Internet

develop when he worked in communications for the military beginning

in the late-1970s. He then obtained a degree in information technology

from Bellevue University (Class of 1991). Along the way, Gandy, a

minister in the Assembly of God, took time out to work with

"struggling

parishes."

Gandy came to New Jersey as pastor of a church in Voorhees, and, after

traveling around a lot, has decided to stay in the state. His wife,

Rene, is a stock room manager; they have four children. Luckily, he

says, he doesn’t have to turn to burger flipping for extra income.

Rather, using his technology background, he moves from project to

project. Prior to accepting this fulltime position at Mercer, Gandy

worked under a grant that trained individuals with disabilities for

high tech jobs.

"I’ve always been a project manager," Gandy says. "I

always

went to a place where people needed help, and then moved on."

The two-year grant under which he is working now is nearing the end

of its first year. He describes his mission as "making sure we’re

hearing the employers. Making sure we’re hearing the students."

Top Of Page
Add the Government to Your Client List

The Department of Defense is looking for a whole lot

of good landscapers, psychologists, building contractors, and even

teddy bear manufacturers — as are other government agencies. The

Procurement Assistance Center at the New Jersey Institute of

Technology

teaches entrepreneurs to fill the need of government at all levels

for outsourcing, a cost-efficient way to obtain the thousands of

categories

of goods and services it needs.

Now in its 14th year, the Procurement Assistance Center helps

companies,

especially those owned by women or minorities, win government

contracts.

It operates under a cost-sharing cooperative agreement between the

Department of Defense and the New Jersey Institute of Technology,

under the auspices of NJIT’s Office of Economic Development. The

center’s

purpose is to provide marketing, contractual, and technical assistance

to small New Jersey companies that are interested in selling their

goods and services to the Department of Defense and other government

agencies.

NJIT holds a free seminar on "How to Do Business with the State

and Federal Government" on Thursday, December 6, at 10 a.m. at

the Mary G. Roebling Building in Trenton. Call 973-596-3105.

The center has grown from a one-person program with a budget of less

than $200,000 to a state-wide organization operating with a staff

of four and a budget of $500,000. It maintains offices in Newark,

Trenton, Mt. Holly, and Atlantic City.

Assistance is provided to firms through the sponsorship of outreach

workshops and seminars, implementation of government market research

in the form of bid information opportunities, and one-on-one

counseling

on all aspects of government procurement. Clients are trained in

E-commerce

and educated on the bidding process that leads to government

contracts.

The federal procurement process for small, women-owned, and

minority-owned

businesses was complicated by the enactment of the Federal Acquisition

Streamlining Act of 1994. This act requires the government to procure

its goods and services electronically via computer rather than through

paper proposal submittals. This change will be integrated within the

next few years, and does away with over 200 federal acquisition laws

as they apply to the purchase of goods. The center is educating new

bidders and veterans alike on the new procedures.

Since 1986 the center has helped New Jersey businesses secure more

than $435 million in government contracts.

Anyone with a small business should consider bidding on government

contracts. The Department of Defense and other government departments

buy for their bases, their projects, their employees, and for the

employees’ families. That’s where the teddy bears come in. One of

the center’s clients sells the stuffed animals, and, through its help,

won a contract to place them in PXs.

The center’s clients include doctors, lawn maintenance companies,

attorneys, builders, testing laboratories, office supply companies,

computer instructors, psychologists, landscapers, and many, many more

types of professionals and businesses. The government buys anything

a business — or a family — would buy. Toilet paper to liquor,

some government agency needs it.

In its upcoming seminar, the center will go over the following

information:

How purchases over $2,500 are advertised.

How to find purchases under $100,000.

How to apply for Central Contractor Registration (CCR).

Certification training for federal and state agencies and

large companies.

An overview of the bidding process.

A review of applicable regulations.

Introduction to electronic commerce.

Seminar participants will also be informed of the free services

the center provides, including information pertaining to

subcontracting

opportunities, one-to-one technical assistance in completing bid

packages

and other paperwork, and help in resolving federal government contract

problems

The most important step for small businesses looking for new clients

is to get in there and bid.


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