Published: 3 July 2005
Howard Frederick has written a book, Sources of funding for NZ entrepreneurs, which contains a couple of gems.
For the most part, Professor Frederick’s book is a catalogue of fairly dry fact & definition. And then you get to the page preceding the venture capital chapter, and the chapter itself.
The preceding page contains the 3rd of the book’s 5 entrepreneurial perspectives â€“ Going public: The acid test. Professor Frederick lists 6 questions designed to help the entrepreneur see if their company is suited for public listing. It looks at p:e ratios, margins, succession & the cost of building the business.
In the venture capital chapter, Professor Frederick has listed 5 venture capital myths in his 4th entrepreneurial perspective, and it was in the middle of that page that the key value of this sort of publication became apparent.
“A venture capitalist will see form 50-100 proposals/monthâ€¦.” Professor Frederick wrote. Whittle it down to 10, whittle it down to 3, and then down to the one. How do you get to be the one?
From that point, I think the user of this book will fan out again, looking for the directions & ideas & management requirements leading into that key point.
Assume you’re among the 99 hopefuls dropped off a venture capitalist’s list. You still have your young business, your eagerness & your ideas, so you go back to the start of Professor Frederick’s book and work through the alternatives. If you don’t fit the venture capital requirement and listing is unreal, this book lists the various alternative funding sources in the market. Or, maybe, you go through those exercises once more and make yourself fit the venture capitalist’s model next time round.
I’ve picked on the venture capital & listing sections because they contain the key elements â€“ for seekers of all kinds of finance â€“ of what you have to do. A well written business plan is an essential. Among the dos & don’ts of approaching a venture capitalist, embellishing projections is a no-no, bringing your lawyer is another.
The other gem is, again, the obverse of the coin: While you have approached a financier (maybe for venture capital, maybe for one of numerous other kinds of finance), you also have to evaluate the financier, what they’re offering, whether they fit with you, whether they’ve understood your proposal.
It’s not a big book that Professor Frederick has written â€“ 81 pages â€“ and it doesn’t contain everything you need to know. It will provoke thought and there are various leads to extra information, so in that sense it’s a primer, but a worthwhile one.
Professor Frederick is professor of innovation & entrepreneurship at Unitec where he teaches global market entry, e-business, market research, the new business environment & political communication. He’s the only professor in that field in New Zealand, he says. He has degrees from 3 American universities, starting with a BA at Stanford, wrote New Zealand’s first knowledge economy report in 1999 and is on the boards of 4 New Zealand startups which have operations in Australia. His current commercial activities focus on TenÂ³ NZ Ltd.
Professor Frederick’s book was printed by an outfit that’s an example of highly successful entrepreneurial behaviour, Lulu, of North Carolina. Yes, in an era when Americans are whining about losing all their good jobs to the rest of the world, particularly China & India, it was printed by a niche operator with a growing success rate.
Lulu was founded in 2002 by Bob Young, who previously co-founded open source software company Red Hat. It gives independent publishers free access to on-demand publishing tools for books, e-books, music, images & calendars and calls itself “the web’s premier independent publishing marketplace for digital do-it-yourselfers”.
The book was due in bookshops on 1 July, price $39.95. It can also be bought online. The package also includes the TenÂ³ business e-coach cd.