Why do some start-ups succeed when others don’t? There are many factors that contribute to the success of a company, and USC Stevens can help your company get off to the right start.
A common mistake start-up entrepreneurs make is promising a position in the start-up to a friend or family member who may not have the right blend of skills or experience to bring your innovation forward, or seeking an investment from a non-qualified investor. Investors need all the comfort they can get, and as such look for companies capitalized in a standard way.
You also want to start out with clean correct employee and consultant documents executed, such as at-will employment, work- for-hire clarification with consultants, intellectual property assignment.
Surprisingly, a business plan may not be necessary to the success of your start up. Many investors are more interested in the overall market, your commitment, your team, and your support system than in the plan. USC Stevens can help identify market opportunities for exciting innovations, and connect you with right business partners to help you move your innovation to market.
It is Never Too early To Think About How Best to Pitch Your Idea
Tips for Giving a Great Pitch
- Be Concise and Keep it Simple: All great pitches start with a clear, concise and well-practiced description of your company or product – told in 60 seconds or less. When you can articulate the big picture to your grandmother in two sentences, your pitch is focused and refined. Even if your product is complicated, your pitch must be simple.
- Talk the Talk: Describe your product or service and its benefits to garner credibility. To do this, you need to have a clear understanding of:
- Size and scope of the market (including competitive analysis)
- Financial model
- Management team (or creators)
Are You Really Solving a Problem? Lots of university inventions are solutions looking for a problem. Demonstrate your understanding of your target customer’s pain points and be able to articulate the problem you are solving and why the market needs it.
- Get Creative: Create a relatable picture for your audience. A common way is to use an analogy between your start-up and a well-known company. "We're the MySpace for seniors" is an easy to say that you're trying to create a social network for the elderly.
- Be Passionate: Your job is to light a fire. A good pitch makes your heart race. Show your passion to succeed. Partners want to know what you're building, why it's important, and why you’re going to be a success and why you care.
- Conclude Your Pitch with a Call to Action: Recognize that different audiences prompt different requests. You might ask friends and acquaintances if they know anyone who would be interested, anyone who's working on something similar, or anyone who's working in the investment world. On the other hand, ask angels and VCs if they'd consider investing. In many cases, you’ll ask if they'd be willing to set up a meeting or speak by phone. If you're really in an elevator, offer to walk straight back to the office to talk more.
- Tell a Consistent Story: Make sure that your managers and other key individuals, such as investors and board members, can also give your company's elevator pitch fluently.
Funding Your Company
There are many different sources of funding available to advance your idea. The following details just some of the available resources.
SBIR / STTR
SBIR is a highly competitive program that encourages small business to explore their potential. By including qualified small businesses in the nation's R&D arena, high-tech innovation is stimulated and the United States gains entrepreneurial spirit as it meets its specific research and development needs.
STTR is an important small business program that expands funding opportunities in the federal innovation research and development arena. Central to the program is expansion of the public/private sector partnership to include the joint venture opportunities for small business and the nation's premier nonprofit research institutions. STTR's most important role is to foster the innovation necessary to meet the nation's scientific and technological challenges in the 21st century.
Angel Investors
An angel investor is a person who invests in a business venture, providing capital for start-up or expansion. These individuals are looking for a higher risk and rate of return than would be given by more traditional investments. Angel investors are perceived of as "filling the gap" between the financing provided by family and friends and venture capitalists. Individual angel investors typically invest up to $150,000, but it's becoming increasingly common for angels to operate as part of an angel syndicate (a group of angel investors), which raises their potential investment level accordingly.
Venture Capitalists
A venture capitalist is a person who invests in a business venture, providing capital for the start-up phase and expansion.
Managing Conflict of Interest
Unfortunately, there are many situations in the university environment which can be perceived as a conflict of interest. Many conflicts that are disclosed can be managed. For example, when a faculty member has a financial interest in a company which funds his or her research, or worse yet, clinical trials, and which many involve students working on thesis projects, the situation must be disclosed.
The challenges and real problems start when a potential, actual, or something that can be perceived as conflict is not disclosed. For more information, please review the COI Policy.
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