I had the good fortune to interview Peer Segelke, a specialist in corporate and business law with LeClairRyan, and Mike Drzal, chair of LeClairRyan’s Technology and Venture Capital practice.
I asked Peer if he had three suggestions for high-tech entrepreneurs. He readily and generously offered answers.
1) Write a business plan.
According to Peer, most entrepreneurs see a business plan as a requirement for seeking funding. But one of the problems high-tech entrepreneurs can have is lack of focus. They pursue every avenue to attempt to develop their ideas.
The challenge is that most high-tech entrepreneurs have limited resources, both time and money.
"A business plan helps you keep your finger on the pulse of your progress," Peer said. "It allows you to anticipate change. Then you can be as flexible as quickly as you can."
2) Know your customer.
"You may have an idea," Peer said, "but not necessarily a customer for that idea. It’s a safer bet if you’ve found your customer or have an idea who that customer is."
3) Make sure you have adequate financing.
Writing a business plan would help assess this.
"It’s better to start with more rather than less. If you have to raise money after starting the business, you can’t focus on the business."
"It’s a lot more expensive to fix things after the fact."
To Peer’s suggestions, Mike Drzal added one more: "Get a get good lawyer–somebody who doesn’t dabble in new company creation. Get somebody who really does it."
Hearing advice from individuals who have observed high-tech businesses succeed–and fail–made me listen closely and seriously.
As a result of the interview, I had some insights.
1) I did not write a business plan for my previous businesses, but I have for this one and discovered what Peer said is true: I have a focus now that I did not have prior to writing the plan.
2) As a result of writing the business plan, I know who my customers are and what my ideas offer them.
3) I wonder if I did not seek "adequate financing" for my previous businesses because I feared my ideas might be criticized or rejected. I think I felt excited and driven to pursue the ideas, and didn’t want to discover that my businesses might not succeed.
4) Most of the counsel I have sought in the past was from well-meaning dabblers.
Ah, the entrepreneur’s constant temptation: "I’m going to do it my way!"
Yes, I could do it my way again. That hasn’t always worked so well.
I could do things differently this time. I could pair my good idea with good advice.
The description of VT KnowledgeWorks’s Concept Camp comes to mind: "What does it cost? Much less than a failed launch."
I am grateful to Peer and Mike for their insight-inspiring advice.
LeClairRyan is an entrepreneurial law firm that provides business counsel and client representation in matters of corporate law and high-stakes litigation. LeClairRyan is a corporate sponsor of business acceleration center VT KnowledgeWorks.