By Heather Martin
On a cool Monday evening in Santa Monica aspiring entrepreneurs, community members and veteran business people huddled together in the ambitious new Cross Campus space on 10th Street for the event entitled “How to start, Run and Sell your Company by those who know,” hosted by Swap it Forward.
According to its Founder Brian MacMahon, Swap it Forward “is a shared community marketplace where entrepreneurs can grow their business by using their products and services as currency to get other companies products and services. By paying it forward with what they have already, everyone benefits.” Brian, also a real estate guru at Your Office Agent, describes Swap it Forward as a “movement” that is designed to allow entrepreneurs to get the resources they need to make things happen without always being limited by funding.
The panelists were heavy hitters including John Bates, a coach to TED speakers; David Ochi, an investor and mentor in early stage companies for over 20 years; Ash Kumra, co-founder of DreamItAlive.com and Chairman of Tech Coast Venture Networks; and Bart Greenberg, the immediate past Chairman of Tech Coast Venture Networks and a partner in Haynes and Boone’s Orange County office who advises start-ups and emerging technology companies.
The panelists provided valuable advice to the audience, including a random collection of cards from audience members, which were then posted on the large screen and given on the spot input to help their companies. Some audience members quipped that advice they were given would cost them upwards of $20,000 on the open market, but at this collaborative environment they were given solid business advice for the small cost of attending.
MacMahon aptly noted that “Looking for funding is a massive distraction from your business.” Panelists responded by giving some advice on how to improve your odds of getting funding so you can focus on your business. One of the biggest mistakes entrepreneurs make is that they think they “just need money.” Even a Venture Capitalist (VC) needs to make a decision from an emotional standpoint, not just a logical one. You need to tell a VC a story – instead of just talking about the market cap potential of your business, start by telling a compelling story about the lives you will impact or the difference you will make. Entrepreneurs were also encouraged to follow the advice from Simon Sinek’s famous Ted talk called “Start with Why.”
Kumra’s advice was clear “first envision your goal” and “follow a passion, not a trend.” As a successful co-founder of Dreamitalive.com as well as Chairman of Tech Coast Venture Network (TCVN), he knows firsthand about this. TCVN is one of Orange County’s oldest venture associations, and now it is launching for the first time in its 30 year history, a Los Angeles Chapter.
As an attorney and partner at Haynes and Boone in Orange County, Greenberg has even more practical advice to assist startups. The crux of his comment is don’t try to beat the tax system by incorporating in Nevada or Delaware. “If you’re in California but you incorporate in another state, you have to legally qualify to do business in CA and you have to pay CA taxes. Unless there is a compelling reason for doing so, for example, someone is going to write you a very large check, why pay franchise taxes in 2 different states? It complicates the process and investors may not see you as a savvy business entity.”
As to the ultimate question of whether to set up your business as an LLC or Incorporate? Greenberg says it depends on your goals – If you are seeking outside funding, investors prefer corporations. If not, an LLC provides more flexibility and you can always transition that entity into a corporation. Bottom line is seek out a qualified attorney who will give you the right advice on how to get started and typically most firms will charge competitive rates to set up your business because they view it as a loss leader to get their foot in the door.
MacMahon summarized the success of the event by saying “one of the most exciting things of the night was the announcement that Tech Coast Venture Network is finally expanding from Orange County to Los Angeles after 30 years. This is big news for the LA tech scene that will now have access to the best in the venture world via this amazing and well respected organization.”
For additional information please visit: