Finding access to capital doesn’t have to be challenging

By: Jonathan Mills Patrick
Senior Vice President/Chief Lending Officer
UT Federal Credit Union

In the movie “Arthur”, with Dudley Moore, the main character is asked what it’s like to own a yacht. “It doesn’t suck” he quips in response. This is true of access to capital for startups.

JP speaking

Jonathan Mills Patrick, Senior Vice President/Chief Lending Officer, UT Federal Credit Union

92% of startups fail(1)

In a recent article in Fortune Magazine startup founders were asked the chief reason their startup failed. Now, you might think the #1 reason was access to capital. In fact, it was not (we will get to #1). However, access to capital was listed as the second most common reason for failure.(2)

The top reason for failure according to the poll was failure to find a market. Most likely it wasn’t that no market existed. Rather it was the difficulty in finding the right market to enter. Taking us indirectly right back to access to capital. It is easy to run out of cash when it takes 2-3x longer for startups to validate their markets(1) than traditional businesses.

Idea stage funding?

As a startup founder myself I can tell you the difficulties entrepreneurs face in finding access to capital. I was fortunate enough to be able to self-fund GoGrabLunch (my former business-to-business networking site). In fact, I deliberately choose not to take on outside investors. Which was one of my many mistakes (I’ve written a tell-all eBook about the lessons from that experience). We had some successes too, like accomplishing members in 45 countries.

Enter Line12

My biggest take away was the desire to help create a “Capital Continuum” in Knoxville. And so in March of 2014 my company launched the Line12 fund. Regardless of their stage, our goal has been to help entrepreneurs launch and grow the business of their dreams. To support them when no other investor or lender would. To date we have provided over $200,000 in capital to various companies in the Knoxville community through this particular program. That includes folks like Charlene Oosterling of Stoopid Good Foods.

“If I didn’t have a resource like Line12(3), I’d probably be still spinning my wheels…” Charlene Oosterling, founder of Stoopid Good Foods

I imagine if you asked Charlene she’d tell you, that while not as fun as owning a yacht, access to capital doesn’t suck.
(1) From “The Startup Genome Report Extra on Premature Scaling”
(2) Fortune Magazine article, “Why startups fail, according to their founders”
(3) Line12 is the business micro fund from UT Federal Credit Union that has won national awards. Learn more at line12fund.com

City wins $25K to help entrepreneurs succeed

By: Shelley Kimel

The city of Knoxville has won a $25,000 grant from the Ewing Marion Kauffman Foundation to support the region’s entrepreneurs, Mayor Madeline Rogero said this week.

Rogero presented Knoxville’s proposal for an “Entrepreneurial Passport” app and related website at the 2015 Mayors Conference on Entrepreneurship in Albtuquerque, N.M.

“This is a software platform that will put entrepreneurs and entrepreneur support organizations on the same page,” she said during the presentation.

Read the full News Sentinel article here.

 

Share

The journey: Startup Day alums share high points, lessons learned

By: Amy Nolan
Business Journal

You don’t have much time to apply to pitch your idea at Knoxville’s Startup Day, but you can still learn from those who’ve made the cut. Applications are being accepted through Oct. 6 for startups to present their ideas to nearly 400 business leaders, entrepreneurs, investors and community leaders.

Now in its third year and hosted by a group of East Tennessee business, entrepreneurial and organizational partners, Startup Day promises to be bigger and better. For the first time, a $5,000 cash prize will be awarded to the most promising pitch. And the event — scheduled for Nov. 19 — is moving to the Bijou Theatre to make room for more guests.

Read Knoxville News Sentinel’s full story here.

Alumni share their tips below.

A list of details about each alum’s endeavor is compiled here.

How do you continue to develop your business?

What’s one personal business highlight that you’ve had over the past year?

What are the biggest lessons you’ve learned so far?

If you could start over again, what would you do differently?

What advice do you have for others who want to start a business?

Copyright 2015 Journal Media Group. All rights reserved.

Knoxville ranked No. 4 for startups

Knoxville has claimed the No. 4 spot in a ranking by financial technology company SmartAsset of U.S. cities with the lowest business-startup costs.

The firm looked at factors such as office space, utilities, filing fees, legal and accounting costs, and payroll in rating cities as startup friendly.

Read Knoxville News Sentinel’s full story here.

Share

Application Now Open for the 2015 Startup Day Pitch Competition

New pitch competition gives East Tennessee startups an opportunity to win $5,000

September 20, 2015 — Applications are now being accepted for the Knoxville Startup Day 2015 pitch competition. The competition is a new addition to the lineup of activities planned for Startup Day 2015 and will feature six East Tennessee startups pitching their businesses for a chance to win a $5,000 cash prize.

“East Tennessee has a rich tradition of innovation, yet one of the biggest challenges startups face is access to capital,” said Stacey Patterson, Vice President of the University of Tennessee Research Foundation and member of the Startup Day 2015 Steering Committee. “To help address this challenge, Startup Day 2015 will offer a cash prize to the winner of our pitch competition that will be judged by a panel of investors.”

To apply for the pitch competition, eligible startups must be located in the East Tennessee region and fill out an application, available on the Startup Day 2015 website: www.knoxvillestartupday.com. Startup Day 2015 is scheduled for Thursday, November 19 at the US Cellular Stage at The Bijou.

Applications will be accepted from September 20 to October 6. The Startup Day Steering Committee will review applications and select six startups to participate. Applicants will be notified of the committee’s decision no later than October 16, 2015.

Startup Day is an annual event that celebrates entrepreneurship and showcases Knoxville as a destination for startups and entrepreneurs. The event attracts nearly 400 business leaders, entrepreneurs, investors and community leaders. This year, the event includes a pitch competition with a $5,000 cash prize, fireside chats with some of Knoxville’s most successful entrepreneurs and investors and the UT Federal Credit Union Traction Award, given to a Startup Day alum that’s made the most progress over the last three years.

Startup Day is coordinated by a steering committee that includes: The University of Tennessee Research Foundation, Oak Ridge National Lab, Knoxville Entrepreneur Center, Tech 2020, Launch Tennessee, Pershing Yoakley & Associates and The Anderson Center for Entrepreneurship & Innovation at The University of Tennessee, Knoxville.

For more information, visit: www.knoxvillestartupday.com.

Share