On this week’s District of Corruption show, Geoff and I discussed entrepreneurship, incubation, investment and the role that a company like Launchbox Digital plays in a regional community. It all stemmed from Jimmy Gardner’s post titled Are DC Startups Developing a Complex?
Launchbox provides a critical piece for a burgeoning startup community – namely, the resources to get going. Companies like this are known as incubators, and they are great catalysts for entrepreneur with great ideas to get started with a little seed money, assistance with all the legal hurdles and potentially the opportunity to pitch an idea to an angel investor or VC.
Passionate people with great ideas. Turning those great ideas into valuable entities worthy of investment. These are things that companies that may not have a ton of experience need.
Something that disturbs me about Jimmy’s piece is the expectation that a DC firm should invest in DC companies and nowhere else. An investment in Lookery, a Silicon Valley based startup does seem to be a questionable first move for a company looking to tie its roots to the DC community, it does not mean that regional investment won’t come. It certainly doesn’t mean that local tech deserves the investment.
I’m not a VC, but my opinion is that a company looking for an investment should be able to demonstrate an idea for revenue. Launchbox probably could help develop some of this sense. Certainly, a company looking for angel or VC money needs to have at minimum a business and revenue model and at best, track record of revenue production.
No one gets money for their good looks.
For the DC community, I still think it’s a little early for significant investment. Before all my colleagues stone me, I’d ask you tot take a step back and look objectively at what we have here. We do have a community that is coalescing quickly, but 8 months ago was really non-existant. We do have some great ideas developing from local entrepreneurs. We do have lots of networking.
However, we don’t have any demonstrable boot-strapping. We don’t have the business savviness that places like Toronto, Seattle and yes, the Valley have. We do have large enterprises dominating the landscape and while AOL is all but gone from Northern Virginia and Sprint is leaving for Kansas City, the business landscape is still dominated by Telecoms and government contracting companies.
Though this will take time to change, an incubation company like Launchbox may be just what the Doctor ordered. In an ideal world, entrepreneurs should start thinking about their ideas and writing down their notes. When asked what they do or why they do it, they should practice their confident deliveries. Never be shy about what you do or why you do; it’s good practice for when you need to pitch your ideas to potential investors). Think proactively about what you want to do and ways that you can make it fiscally sound.
If you’ve already started a company and it just doesn’t seem to be taking off, don’t hesitate to temporarily cease what you’re doing while you figure out a different approach. Think like a business, act like a business and maybe you’ll have the opportunity to be funded like a growing business.