Last Wednesday, Silicon Prairie News and Missouri Bank held the first Let’s Talk event, gathering about a dozen entrepreneurs at the bank’s Crossroads branch for a discussion on startup financing with local experts.
The three experts—Fred Coulson, Five Elms Capital; Michele Weigand, Focused Perspective; and Michael Williamson, Polsinelli—took us all to school on everything from S corps and market size to operating agreements and potential implications of the JOBS Act.
Attendees submitted questions for the moderator, Planet Reuse CEO and founder Nathan Benjamin, before the event, where he then led the discussion and added his own entrepreneurial experience to each topic. The group ranged from first-time entrepreneurs to seasoned business executives dedicated to learning more.
A good chunk of the conversation dealt with the earliest stages of a company: expectations from all the founders, the initial company structure, how to handle friends-and-family investment and how to take funding from one round to the next.
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The experts agreed tough conversations early on could stave off a lot of pain later, if and when the company gets more funding and brings in profit. Coulson walked the group through a company that hadn’t put explicit wording in its operating agreement for what was expected from every founder. One of them bolted before the company took off, but because he kept a third of the ownership he reaped the rewards of their hard work once they made it big.
“Plan out a few key scenarios,” he told the group. “It’s important to find what’s fair for everyone.”
And when raising funds from family, make sure they understand a convertible debt note won’t bring them any money upon the next round of funding. It’s a problem most entrepreneurs don’t anticipate, Weigand said.
“There’s a misunderstanding on getting investment back in the next round and they want to see a return.”
To be in on all of the discussion and have your questions answered, make sure you …
Mark your calendar
SPN and Missouri Bank already are at work for the next event May 29 at Think Big Partners’ building, which will focus on human capital and human resources. There may be tweaks to the setup, but the goal remains the same: put entrepreneurs in a comfortable setting to discuss the problems they face and the questions they have.
Keep a close eye on posts and tweets from SPN for more information as the event nears and thanks to those who got our quarterly series off to a great start!
