InnovationACT held the fourth and final workshop in their 2014 program on Saturday the 20th of September. As with previous workshops, the venue was the E29 co-working space. The InnovationACT website states that this year’s program hopes to become the “… the best innovation/entrepreneurship education program in Australia.” Last Saturday’s workshop and the past events I have been exposed to certainly live up to this ambition. Though some contestants seemed preoccupied with the university holidays and left those contestants present and myself to enjoy the wealth of knowledge offered.
The workshops, in detailing the process of building an entrepreneurial venture offer fantastic access to resources and shared knowledge. This was evidenced by the presentations of guest speakers Craig Davis of the Griffin Accelerator and Lachlan Blackhall of Reposit Power. Both speakers highlighted the avenues of funding available to budding entrepreneurs and gave detailed explanations about the practical applications of funding.
It may be because the workshops are held over Saturdays (or my insomnia) but each time I attend an event related to entrepreneurship, I not only learn, I am dumbfounded. Both guest speakers detailed sources of investment available in the Canberra region. I listened, enthralled not only by the amount of investment available in Canberra but by the legalities of investment and the relationship between investors and entrepreneurs. I had imagined that any sizeable investment from a third party meant relinquishing not only equity but control and sanity. I had imagined young entrepreneurs signing agreements in blood. I imagined they then bore the responsibilities of failed ventures long after the businesses ceased trading. As it turns out prudent individuals can enter into sensible agreements with investors and take the necessary precautions to ensure a business does not become an albatross.
Camilo Potocnjak-Oxman and Rishni Ratnam of Implement Imagination led the contestants through the logical, planned processes of planning an entrepreneurial venture as they have done in previous workshops. Worksheets were given to contestants, providing them with templates for discerning the base details of business ventures. Key terms were defined to contestants; ‘clients’ and ‘end users’ are in my mind no longer synonyms. The novices present, me included, learnt that a client can be someone who perceives a profitable result from the needs of an end user being satisfied. Terms such as ‘cost-based pricing’ were branded about and elaborated upon, with the practice of basing prices upon customer surveying shown to be ineffective. Camilo elaborated on the concept of failure and its impact upon the entrepreneur, citing a ‘fail-based culture’. Failure, against what I had believed should not be considered an albatross. Failure can be empowering, in Camilo’s words “… entrepreneurship is about failing early and quickly.” Having failed, one can then progress to circumstances where conditions are more favourable.
Craig Davis of Griffin Accelerator detailed, through the use of a colleague’s slides, exciting concepts such as the ‘valley of death’. The term refers to the cost of outlay and expenditure in building a venture, before positive cash flow is seen for customer sales. An important concept, the ‘valley of death’ was made more concrete when Mr. Davis explained that there are non-cash costs associated with building a business venture. The entrepreneur’s time is no doubt valuable and when beginning a business there are obviously long stints of hard work and effort. These hours are not immediately rewarded and can be counted as part of a cumulative debt a business encounters before any good or services have been sold. As positive cash flow is seen, a business Mr. Davis explained will begin to encounter different life-cycle stages and in doing so, ride a debt roller-coaster. These terms are emotive and had me wondering just how one accomplishes a profitable venture. My doubts were lessened though when Mr. Davis detailed the large number of investment opportunities present in Canberra. A by no means exhaustive list includes: Capital Angels; the Canberra Business Development Fund; Seed Investment Fund; Discovery Translation Fund and ANU Connect Ventures.
Grants, investment and venture capitalists are necessary to the entrepreneur. As Mr. Davis informed the audience, banks are unlikely to issue business loans against profits; banks prefer to loan against mortgages. Mr. Davis detailed the pitfalls of borrowing from the three f’s: family, friends and fools. The consequences of borrowing from these groups are almost statistically certain, as start-ups have a very high fail rate. Mr. Davis enlightened contestants as to how to give equity to investors in appropriately measured amounts, as to maintain a working base of future equity. For instance if the budding entrepreneur was to give away too much equity too soon, the consequences would be dire. Growth would be impeded as there would be no equity left to attract further potential investors.
Lachlan Blackhall of Reposit Powers gave an enlightening presentation on strategically approaching and managing different sources of funding. In beginning his presentation Mr. Blachkhall detailed his fifteen years of experience in the start-up scene as both an entrepreneur and investor. His presentation, like Mr Davis’s was an illumination of the practicalities of securing and managing funding in the Canberra area. As Mr. Blackhall explained there is comparatively little competition in the Canberra start-up scene, as such entrepreneurs should “… chase everything as hard as you possibly can.” The differences between investor and entrepreneur rationale were explained and tax solutions such as research and development concessions were detailed. Mr. Blackhall then went on to explain some of the legality issues surrounding business ventures and investment, as well as giving reasons and examples for business failures.
The final workshop of the 2014 InnovationACT program was enlightening and grounded in absolute practicality for the budding entrepreneur contestants. That such an amalgamation of resources is available in a city full of opportunity and comparatively little competition is fantastic. Those not fortunate enough to be contestants in the competition would be wise to brainstorm over the intervening months and apply for the following year’s competition. If not for the sake a business venture then for the access to a fantastic knowledge base.