Why was IBM Global Entrepreneur founded?

We know that working with startups can drive change. Today, the world’s physical systems are being infused with intelligence, and this opportunity to apply information technology to physical infrastructure opens up vast new markets for the IT industry.  With disruptive, new technologies, this is the perfect scenario for innovative entrepreneurs to play a major role.  With IBM’s unique vision of a Smarter Planet (ibm.com/smarterplanet/uk), we are looking to partner with technology entrepreneurs who share this vision and want to work together to address this new market opportunity.

What kinds of support do you offer to entrepreneurs?

IBM Global Entrepreneur has the products, people, and promotion that can help technology startups extend the size and reach of their company.  The initiative provides support and resources in the areas these startups need most:

1. Product
   • No charge access to IBM’s software portfolio on-site or through the cloud to accelerate software development
2. People
   • Dedicated technical enablement support to help startups develop their product and get to the marketplace faster.
   • Mentors at IBM SmartCamps around the world who can help them grow their business.
   • Industry market intelligence from our top industry experts that can help them understand the enterprise customer and the market opportunity.
3. Promotion
   • Visibility as part of the IBM Smarter Planet agenda to set themselves apart from the competition.
   • Recognition and additional benefits to partners with the most innovative solutions
   • Opportunity to showcase their company in the IBM Global Entrepreneur directory.

When was the initiative started and how many entrepreneurs have you helped?

IBM Global Entrepreneur launched on 31st March 2010, so is very new at the moment. Given this, we are at the stage of raising awareness of what we have to offer, and encouraging participation. We are doing this by engaging with individuals and organisations who are already well established in this community, and we are delighted that School for Startups is working with us as one of our ecosystem partners. Hundreds of startups have shown interest in our new initiative, and I am delighted with how enthusiastic people have been who I’ve spoken to about what we are doing.

How do entrepreneurs participate?

Startups who meet the eligibility criteria can register at ibm.com/isv/startup. On our application form we ask a few simple questions to help us understand a little about their companies, and once accepted they will be contacted by one of our Project Resource Managers (PRM). The assigned PRM will make a personal call  to welcome them, and will guide them through how they can make best us of the resources we provide on a one-to-one basis.

Startups can also apply to participate in our IBM SmartCamp London event which is taking place on 21st July at Imperial College London. SmartCamp is an exclusive event that brings together entrepreneurs, investors and experienced mentors who want to help us build a Smarter Planet. SmartCamp provides startups access to world-class advisors, plus a direct route to seed and venture capital. Applications for the London event can be made from now until 2nd July 2010.

What is your background and how did you come to IBM?

In 1987 IBM launched an integrated degree scheme with the University of Portsmouth, and I was one of the original intake to the scheme of 20 students. The initiative was pioneering as it was the first time in the UK that a company’s in-house training counted as credits towards a degree – a BSc in Computer Science. Our time was split on a weekly basis between our studies and doing a real job in IBM, so a very different model to a traditional sandwich course. The great thing was that we were paid a salary for the 3 years of the course, which certainly enhanced the experience!

Since graduating, I’ve performed a very diverse mixture of technical and business roles in IBM, both in the UK and across Europe. In 2005 I took on responsibility for establishing the IBM Academic Initiative (ibm.com/academicinitiative) across Europe, Middle East and Africa, and it was through this programme that I first started engaging with entrepreneurial students in the universities. I still look after this programme in the UK & Ireland, and am very excited about the new opportunities that leading the IBM Global Entrepreneur initiative is bringing. It is such an inspirational community of people to be collaborating with.

Is there a way entrepreneurs can learn more about the initiative online?

Our website is the best place to go to learn more: ibm.com/isv/startup

Additional information on IBM SmartCamp London can be found at ibm.com/ie/smarterplanet/smartcamp

Related posts:

1. Global Network for Entrepreneurs with Disabilities
2. Featured Entrepreneur: Kevin Matthew
3. Lead Forensics: Converting Clicks to Leads 24/7

If you have a very good startup or small business demonstrating a readiness to grow, and you have any kind of significant presence in the media, investors may well start finding you. Investors like to see that your business has a proven value which good market presence usually verifies. Investors also want all the fundamental uncertainty gone about whether or not you can run a business, and whether your business can find customers and sell them things. Once you’ve proven those properties in your business, and you have a plan for how to turn a little money invested into a lot of money returned, you start to be of interest to anyone who makes money off money.But how do you get to that point?

The earliest material support provided to entrepreneurs and their business usually comes from family and friends . . .

Why Family & Friends First?

Taking money from family and friends for your business . . . every entrepreneur I know initially quails at the thought.  But, here’s the thing.  If your early stage business is really strong enough for someone to put money into, then you should feel comfortable telling your family and friends about the opportunity.  Your path forward should be so clear, your prospects so certain, your customers so obviously ready to support your start or your growth that the funding that comes in from family and friends will go right back out to them at a profit.  That’s not always the case of course, but even early funding should be provided when a business model is solid enough you know where and how the revenues required to repay that investment will be earned.

Note, that I’m not talking about the few hundred dollars you need to buy a computer, cover basic travel costs, or address your need for printer paper and photocopies.  Family and friends of new entrepreneurs often provide this level of support without particular thought of return.  An old computer, a rail ticket, a used printer are often just holiday and birthday gifts.  In fact, as an entrepreneur one of the nicest things you can do as you become more successful is pass off your old equipment to friends and family working to start work on their own enterprises. That early “capital” is often the critical investment brand new businesses need most delivered at a time when they need it most.

But when you start needing cash to fulfill existing orders or scale your business up, family and friends will want a more formal relationship involving a discussion of return on investment and risk.  If your opportunity is good enough for them to take a risk on, given that you’ll see them every year for the rest of your life and you’d like to retain your family and friends, it is worth coming up with a formal business relationship for a short term loan or a small investment that lets you get that first “step ahead” of your bills into a cash flow positive position.

And if your opportunity is not good enough to guarantee that, you must ask yourself why it is a good enough risk for anyone else to take.  You must think about what you can do to make the opportunity better.

The Right Conditions for Family and Friends Investment

Investments from family and friends should be small, secure, and very safe. They should usually be based on the idea of fulfilling existing orders. They should generally be fully documented, with terms spelled out for what will happen in case of default.  For any except the smallest amounts, a lawyer should be involved in drawing up the agreement. It’s best to start with a very small deal, and then (as trust develops), deals can get larger.  Whether it is stated or not, all family and friend loans are “personally secured” if you intend to keep the family and friends after the deal. Obviously friends and family forgive debts all the time, but it is not something that’s ever particularly pleasant.

Related posts:

1. An Entrepreneur’s Guide to Accepting Early Stage Funding From Family & Friends
2. An Entrepreneur’s Guide to Creating & Testing Business Models
3. An Entrepreneur’s Quick Guide to Closing Online Sales

A masterclass in business from Doug Richard

The Journal – February, 4 2010
Entrepreneur and television Dragon Doug Richard visited the region yesterday on a mission to create more businesses and said the region was the perfect place to start up.

Doug Richard launches business manifesto

More tax breaks for start-ups

Related posts:

1. The Entrepreneurs’ Manifesto Has Been Released
2. Doug Richard Appears on CNBC to Address Government Red Tape
3. Download The Entrepreneurs’ Manifesto & Declaration of Rights

S4S NEW Website

Blogs, News, Nationwide Events, Live & On-Demand Video Content, Featured Entrepreneurs & Entrepreneur’s Networking Forum!

We are excited to welcome you to our smashing new website! If you hadn’t noticed we have been busy making important changes to our website, ensuring that we are constantly providing you with the most up-to-date information, articles, news and online resource that we can. All of us at S4S hope you enjoy the new features on the website – do stay tuned as there is much more to come in the not too distant future!

So, What’s NEW?

The S4S website is packed with brand new content and features, including:

• NEW: Online Entrepreneur Community
• NEW: Live & On-Demand Video Material – S4Stv
• Annual Events Calendar
• Doug Richard Blogs
• NEW: Featured Entrepreneurs
• BOOK Doug - Inspirational Speaker

But most importantly, we hope it gives you many ways to tell us just what else we can do to make S4S better. Our Forum, the Comment links on our blog pages, links to our email and mailing addresses . . .

We look forward to hearing from you often in the months and years to come.

Related posts:

1. Sign Up For Our Newsletter: See News, Blogs, Classes, Online Events First!
2. Mass Media Starts & Ends At Your Website
3. Entrepreneur’s Events Lead Way To Recovery

In his speech last week at Thomson Reuters, George Osborne asserted that there are two issues holding back UK business: credit and confidence. I could not agree more. Whilst he did not touch on what he might do about confidence, I think that in the context of existing small businesses and potential startups, the best way to increase confidence is to reduce real risk. And we can decrease risk by improving the skills of our entrepreneurs so that they make fewer mistakes. Its about education.

As for credit, well, that’s another kettle of fish entirely. Anecdotally there is no doubt that it is more difficult for small and young businesses to get commercial credit, ie loans. Mind you it has alway been difficult and probably rightly so. Commercial and retail banks (the kind that take deposits and lend it back out using the spread to make a profit) have historically been conservative lenders because the margin of profit has been slim. Working on a spread of less than 10% they cannot afford for loans to go bad, or if they do, for there to be no way to recover their money.

Thus, they have historically been asset-backed lenders; that is they have always looked for assets worth the value of the loan to secure the loan in case it went bad. That could be machinery in the business, or your family home and a personal guarantee. I have never had a problem with this given how little they make on the money they lend. But it does make commercial lending inappropriate for young businesses, most high tech businesses and many small businesses without hard assets.

The logic of the Small Firm Loan Guarantee Scheme (SFLGS) which was recently renamed the Enterprise Finance Guarantee (EFG) has always been sound: if a firm could show that it could service a debt the government would step in and provide up to 75% of the asset backing, thus broadening commercial lending to those firms that were cash flow positive or could become cash flow positive, but did not have adequate assets to support the loan.

It is a shame then that the banks have used the EFG primarily to reduce their risk to lend to firms that they would otherwise have already lent to rather than broaden the scope as the scheme was intended. How do I know? Because I have repeatedly sent companies I have invested in, or mentored, in pursuit of loans and in each case the banks involved have always looked for the firm to have assets or guarantees that covered not only the 25% of the loan that was at risk, but the 75% that was not at risk. They justify this on the grounds that they “do not want to have to go to the government after the other 75%.” Meaning, in simple English, that they want the firm to have precisely the same lendability criteria it would have if the scheme didn’t exist!

Thus, when George Osborne calls for a national guarantee scheme, I begin to think that we are merely reducing the risk of the current portfolios of the banks. Perhaps we should look for remedies that don’t involve the banks at all. Perhaps we should be looking for means of encouraging people to directly invest or lend to small or young businesses. What we shoulld do and how we should do it is for another post but I will say one thing. From the front lines, it is perfectly clear that these schemes, under their old name or under their new name should be called RBR Scheme, because Reducing the Banks Risk, is all they really do.

I am holding a full day workshop on November 18th in London at the Royal Institution. It’s called Find, Pitch & Close: The Art of Securing Investment. In addition to looking at the various government schemes that work (or don’t), we will be working through the ways you can really raise money, and what you will have to do to get it. If you are interested, just go here to sign up:  http://findpitchclose-blog1026.eventbrite.com.

Related posts:

1. A Plague On Both Their Houses: Mandelson vs Lambert
2. Small business e-commerce scheme launched
3. Sex, Lies and the Bottom Feeders of the Angel Community