Q: I was general manager of an overseas semiconductor plant that got closed down a year ago. At age 56, I am unable to land a permanent job. Do you have any suggestions?
A: It takes time and a large number of leads to land an executive job. The fastest way to get exposure is to get on the database of a number of recruiting firms. You may also want to expand your search beyond the semiconductor industry, given its overcapacity at this time. For example, you can position yourself as a specialist in high-volume manufacturing or in international business. Your overseas experience and contacts can be useful to any company wanting to buy, sell, or set up operations overseas. I also encourage you to contact semiconductor laser companies listed in the Laser Focus World Buyers Guide. Our industry has much to learn from the semiconductor industry in volume manufacturing.
Q: What is the least amount of money needed to start a business?
A: That, of course, depends on the complexity of the product and what you mean by "starting a company." I don`t think one can launch an ongoing product company for less than several million dollars. On the other hand, it takes a lot less to turn an idea into something concrete enough to convince an "angel" investor to provide some seed capital.
Based on what I`ve seen, a couple of founders--drawing little or no salary--can attract the attention of professional investors by putting around a quarter of a million dollars and a couple of years into developing a crude prototype and a business plan.
Q: What`s wrong with raising $1 million to $2 million from 100 people who understand and are excited about what I do? There is also potential for them to become my customers and help promote the product.
A: Imagine the shareholder base you`ll have a few years down the road when some of your investors move to other states and sell or give their stock to their friends and relatives. As the number of shareholders increases, you`ll reach different trigger points, as determined by state and federal regulatory agencies, to require filing and reporting. You wake up with all the overhead costs of a public company even though you won`t have the liquidity of a public company. Another problem is that the investors you described are much more likely to get involved in day-to-day decision-making than those people who invest in public stocks. Suddenly, you may have a hundred "friends" who want to give you advice or help you do things the "right" way. There is a lot to be said about dealing with a handful of professional investors who have done it before and can be truly helpful to you.
Q: After our company spent more than $6 million of investor money and comparable amounts from government contracts, our venture capitalist pulled the plug. Now a few of the engineers want to start over. Can we do it?
A: Sometimes VCs lose confidence too soon. When that happens, one can pick up valuable assets at bargain prices. But most times the VCs are more rational than those involved with the day-to-day business activities. So evaluate this opportunity objectively, both from a technical and a business perspective. Do not, however, assume that, once the company closes down, its technology or intellectual property is free for the taking. There are legal owners who have claims on company assets, and certainly the bankruptcy court has control over the disposal of assets. You will do well to heed the same legal guidelines as an employee leaving to start a competing company. For sure, you`ll want to keep an open dialog with the VC even if you were the original founder.
Q: How do I start a business without experience or an interest in business?
A: You are enlightened to know your strengths and weaknesses. In reality, there is no way for you to get around taking an active interest in business without paying a heavy price, even if you team up with a savvy business partner.
In the start-up phase, you have to give up a lot more ownership in order to attract a partner if you have no business plan or marketing statistics to validate your concept. So, minimally you want to work with a business consultant to develop a business plan to differentiate yourself from what might be perceived as "another solution looking for a problem."
Business and technology are intricately interwoven in running a high-tech business. Business suffers without the benefits of the founder`s guidance, drawn from his or her technical expertise and corporate memory. Also, you`ll soon lose a sense of ownership if you`re not actively involved in making top-level or strategic decisions.
