Entrepreneurs are at a crossroads.  If you watch any business television show, read the newspaper, do a little web-surfing or pick-up a magazine, the resounding commentary is overwhelming.  Become an entrepreneur; it’s easy, you can be your own boss, and you can achieve financial independence.  Holy cow, where does one sign up for such an easy gig?

 Let’s set the record straight.  Being an entrepreneur is neither easy nor is success guaranteed.  Although many governmentally-financed entrepreneurial support agencies pronounce the secrets of entrepreneurial success, it takes way more than simply attending a business class, or learning how to read a financial statement, or writing a fancy Business Plan.  In many ways the skill-set to be an entrepreneur is rarely developed; it is somewhat innate and, moreover, it is earned.

As has been stated by David Saint-Onge (President of The e-Loft and Black Ink Assets) on numerous occasions within the cover of his U.P. Business Today articles, the three most important issues for a successful business are cashflow, cashflow and cashflow.  For an aspiring entrepreneur this truth becomes self-evident.

 For an entrepreneur, the business idea is the easy part, finding the cash to develop the idea is the Holy Grail.  Traditional funding sources (i.e. local banks) talk a good game but rarely give out cash without some significant convincing; often coming in the form of collateral.  For an entrepreneur, the only thing usually tougher to come by than cash is collateral.  It’s an ironic twist of circumstance, but cash requires cash (or at least cash-equivalents).

 So what’s an aspiring entrepreneur to do if cash is king and you don’t have any?  Perhaps a venture capitalist is a term, and a person you should get to know.  Venture capitalists generally provide cash, and a level of business smarts and savvy, to an aspiring entrepreneur for a piece of the company.  This may sound a bit extreme for someone who thinks they have invented the next Rubik’s Cube or has designed the optimum internet business.  But remember the first rule of successful entrepreneur’s; quickly learn what you don’t know so you have the opportunity to lose less money during the learning process.

 Here are a few helpful hints to better understand how venture capitalists select the next great idea:

1. Venture capitalists invest more in the founder’s of the company/idea than in the company/idea itself.  Good people with a solid business perspective easily trump great ideas that have no marketability. 
2. Venture capitalists look more at determination and resourcefulness than intelligence.  Book smart is good, but common sense smart is better.
3. Venture capitalists want to know that you know the business.  You need to have thought of everything if you want their attention, and their cash and guidance.
4. Don’t be insulted if your idea is better if there is a little twist to it.  Remember, the idea itself is no more important than how it’s brought to market.
5. Risk and return are tied at the hip.  The best entrepreneurial ideas are not necessarily the ones bringing the biggest return.

 In the coming weeks the first U.P. based venture capital company, The Big Chair Club, LLC, is expected to be up and running.  This group of successful business owners will bring a resounding formula of success to aspiring entrepreneurs across the U.P. and the upper Great Lakes Region.  But before you go knocking, be sure you have a full grasp of Items 1 thru 5 listed above.