Venture Capital: It’s back to school for business owners

Fred Holt received a doctorate in mathematics from the University of Washington and spent 11 years as a research mathematician at The Boeing Co.

But the 40-year-old co-founder of Panthesis Inc. still felt the need to go back to school this week.

By JOHN COOK
SEATTLE POST-INTELLIGENCER REPORTER

Holt is one of about 250 entrepreneurs from around the region attending a two-day program on the University of Washington campus called Entrepreneur University. Sponsored by the Northwest Entrepreneur Network, the event — which began yesterday and concludes today — is designed to give new business owners the ammunition they need to survive in an increasingly challenging economic environment.

Entrepreneurs need all the help they can get these days. Venture capital investments are down, information technology budgets are virtually frozen and start-ups are no longer perceived as the hot places to work.

That’s part of the reason the second annual event brought together business leaders, lawyers, academics and motivational speakers who were looking to lend a helping hand.

Among the speakers today are venture capitalist Chad Waite, Optiva founder David Giuliani and KOMO weather forecaster Steve Pool (who will teach attendees how to make a clear and concise pitch to investors).

Going back to school to learn a few tricks of the trade isn’t such a bad idea given the current climate, said Holt, whose year-old Bellevue company is trying to land venture capital financing and its first customer.

Being surrounded by like-minded entrepreneurs who are determined to muscle their way through the tough times also has a certain appeal, he said.

"We are looking for a little bit of inspiration, looking for a little bit of fine tuning and maybe some aha (moments)," said Holt, whose company is developing a new computer network for games, interactive media and collaborative work. "We are just trying to keep our spirits going that this technology is really as promising as it sounds."

Holt is not the only one at Entrepreneur University trying to keep spirits charged in what many have called the worst technology slump in 30 years.

Although tight IT budgets and poor capital markets are causing headaches, entrepreneurs at this week’s event said the biggest problem they face is a growing fear of risk.

This psychological roadblock — an opposite situation from two or three years ago — creates a troubling atmosphere for companies just trying to get off the ground.

Paresh Patel, founder of Courtesy Vending and Virtual Home Model, two Portland start-ups, has encountered this problem in his meetings with potential employees and investors.

"I can get people to believe in my idea, and I can get them to believe in me," said Patel, a 28-year-old entrepreneur who was attending Entrepreneur University for the first time. "But the biggest challenge today is trying to get people to be less risk-averse. The amount of calculated risk people are willing to take today has diminished."

Patel, who founded Courtesy Vending at age 17, said venture capitalists, angel investors, executives and programmers don’t seem to be interested in working for or financing start-up ventures.

In other words, they don’t want to take risks.

The risk-aversion issue was also on the mind of Rich Rollman, vice president of engineering at Bellevue start-up AgileDelta.

His four-member company, which is building back-end software for mobile devices, has had to figure out how to drive revenues and profits at a time when customers aren’t buying and venture capitalists aren’t looking at new technologies.

"One of the main things as a start-up that you have to do is mitigate people’s risk in taking on start-up technology," Rollman said. "The old phrase says, ‘No one was ever shot for buying IBM.’ But plenty of people get shot for buying start-up technology that doesn’t work. So you have to be that much better than everyone else."

John Sheppard, who received his MBA from the University of Washington last year, is being cautious as he contemplates a leap into the start-up world. The 36-year-old business and operations manager at REI attended Entrepreneur University because he is looking "for the right idea, the right opportunity and the right people to do it with."

Although he loves the start-up process and frequently consults with early-stage companies, Sheppard is not sure whether he is ready to make the plunge.

"Right now there is just so much cynicism about start-ups and entrepreneurs with all the dot-bombs," he said.

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(Are there entrepreneurs who would be interested in a similar effort in Montana? What would you like to see discussed to help you compete better?-Russ)

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P-I reporter John Cook can be reached at 206-448-8075 or [email protected]. For more information on Seattle-area start-ups or venture capital firms, visit http://www.seattlepi.com/venture.

http://seattlepi.nwsource.com/venture/94698_vc08.shtml