Should I Bootstrap My Start-up?

According to Investopedia, bootstrapping is “A situation in which an entrepreneur starts a company with little capital. An individual is said to be bootstrapping when he or she attempts to fund and build a company from personal finances or from the operating revenue of the new company.” For example, when I started my first company, I used the Family, Friends, and Fools (FFF) method of financing. I used $100,000 of my own money along with another $50,000 from my family and any fool crazy enough to give me their money to fund my company.

So, let’s talk about some of the advantages and disadvantages of bootstrapping a start-up.

Advantages and Disadvantages:


When financing a start-up not through conventional means like a bank, but through unconventional means like joining an accelerator, venture capital, strategic partners, or angel investors, you must give up your precious equity in the company. It is important to remember that each one of these alternative financing arms have their own motivations, goals, and interests when they choose to invest in your start-up.

Time and time again, I’ve seen clients who gave an alternative financing institution a large part of equity in their company for little support and direction in return. Their interests are not necessarily the same, and then the clash begins. It can be particularly challenging trying to navigate these outside pressures.

By self-funding or funding through Family, Friends, or Fools (FFF), you get to answer to yourself only. This allows you the freedom to lead as you wish, set your own agenda, and most of all, keep the equity in your company. However, there are some downfalls to this.

Have you ever heard the saying “It’s not what you know, but who you know?” That is a very accurate statement when it comes to start-ups. Alternative funding sources are usually full of connections that you do not have access to. They will help you get meetings with the right people, connect you with valuable partnerships, open up markets, and give you increased visibility that you would otherwise not normally have. Lacking these connections, you’re on your own in many ways to find and build support, knowledge, networking, and financing.

As I tell my students, “It’s good to be young, because you can bounce back.” But what about the credibility you need to get to the right people? Not having outside investors may hurt your company’s credibility in the beginning. The question I always ask before I invest in a start-up is, “What kind of experience do these people have in running a business. How well do they listen, and who are their mentors?”

While bootstrapping gives you complete control over your company, self-funding may also shine a light on your company’s lack of resources and business experience. On the other hand, being supported by well-respected and credible investors gives many potential customers the confidence to buy in.


Not having investors allows you to keep 100% of your company. If you become a success through bootstrapping, at a later date you can seek additional funding for a much larger pie and do so on your terms. This means you can negotiate a smaller equity investment than you would negotiating while you are a start-up, because the investor has to take less risk when you come to them at a later stage of the company’s growth.

When bootstrapping, you tend to gain a lot more from your company if it becomes successful, but you will also lose much more if it doesn’t. Remember that the losses will be absorbed by you. Having an investor does allow you access to much-needed cash, but at a price: equity of your company. However, along with that much-needed cash comes a lot of experience, mentorship, and a strategic partnership that will help your company grow at a much faster rate with less mistakes—if you choose the right investment partner. Bootstrapping is risk-taking; you stand to gain a lot more if your company is a success, but if it’s not, all that loss is yours and yours alone.


Organic development is very time-consuming. When I started Credit Justice Services, it took us three years to get traction. Once the traction hit, however, our expansion was crazy. Yet, if we were to have an investor in the beginning, the growth would have been much faster. Without a large amount of cash on hand, the company would not be able to develop key components as quickly as we desired.

A certain amount of revenue is always required for expansion, research and development (R&D), employees, and marketing. This can happen at an accelerated rate with access to a capital investor. Without that access, some growth milestones will take longer to reach, and targets might have to be pushed further down the line.

In my experience bootstrapping my companies, time was usually a large obstacle I had to overcome. For the first three companies I started, built, and sold, I did so as a full-time airline pilot. I was fortunate that I had a schedule that allowed me 15 days off a month. That’s not common for most people, so they’re left with a minimal amount of time to devote to the start-up, especially if they have other obligations in their lives. This leads to the project taking a longer period of time to execute—sometimes years.

Start-Ups Should Learn the Following Before Proceeding:

  • Is it better to have control over your business, but slower growth?

Money helps fuel growth. Money allows you to expand your employee base, market, advertise, and do R&D for a more rapid expansion in a shorter time period.

Bootstrapping means you may not have significant resources to draw on and you will need to dial back your costs. You might even need to keep your full-time job while you launch your business, which will slow down your growth process.

So, the question to ask is, “Can I accept that my start-up’s growth will likely be slower?” But remember, in return, you’ll maintain complete control over your business and its profits.

  • Can you partner with an existing company to expedite growth (i.e., distribution, vendors, manufacturers)? 

Finding the right partner can be tricky; believe me when I say a bad partner is worse than a bad marriage. So, try to team up with vendors. For example, I would go to my wholesale manufacturer and ask for generous payment terms, sometimes as much as a three months payment plan. This will allow you to start your business without investing in inventory. A service provider may offer to finance inventory in exchange for performing other jobs for you, like equipment sales or a maintenance contract.

This enables you to keep the equity in your company, not take on an equity partner, and keep much-needed cash on hand.

  • Do you need capital to test your idea? Customer Discovery first may show you don’t.

(Steve Blanks Driving Corporate Innovation)

Customer Discovery determines if there is a want or need for your product/service.

Here are a few ways to validate your idea that don’t involve significant investment (these methods are expanded upon in depth in my previous articles):

  1. Customer Discovery – Find the pain points of the customer. Learn as much as possible about their needs and wants.
  2. Customer Validation – Go back to the customer with a Minimal Viable Product (MVP) and confirm the customers pains and gains.
  3. Customer Creations – Get-Keep-Grow your customer base by using the funnel method.
  4. Company Building – This is very important and the most cash-bleeding part of the four-step process, so be sure to hire slowly, deliberate, and conserve cash.
  • Can I afford to risk financial/emotional failure?

Creating a start-up will be the biggest emotional roller coaster you will ever get on. Dealing with government regulations, taxes, employees, vendors, and customers is at times like living in a pressure cooker.

You will experience setbacks, roadblocks, and naysayers, which are all amplified when you have limited money to throw at these problems. The only way to overcome this is by pure grit and creativity, but it can also be incredibly rewarding when it works and you watch your business grow! So, should you bootstrap your company?

If you’d like more information, please feel to contact me directly at or go to my academic web site for more white papers and research at


What can Entrepreneurs Learn from Israel

As an entrepreneur for over 25 years, I agree with Plaut when he says that when measuring the most renowned cities in the world for start-ups, you can be sure that Tel Aviv will be one of the first names to come up; but why exactly has the Israeli city garnered such a glittering reputation in the start-up community? Why does it seem to surpass its fellow middle eastern countries?

The Reluctant “Start-Up Nation”

Israel has plenty of innovators and researchers and is pumping out new, innovative ideas and research at record speed. Yet, a lack of infrastructure inside Israel to trade amongst its small economy pushes the startup community to look outside the country to sell its products and services. This may be preventing the emergence of companies on a global scale.

The Israeli nation has 34 political parties, yet only two dominate the political system: the Likud (conservative) and the Labor (social democrats) parties. The reluctance of the two political parties to embrace capitalism as a populist platform compared to the quasi-socialist laws that exist today is baffling. Despite the stifling laws and monopoly of some industries in Israel, the start-up community within Israel continues to grow at a rate admired by the world.

Plaut separates the political hype from reality—economic liberalism is still strong in Israel.  The same people looking toward the Scandinavian democratic/socialist approach as a form of governance also own the high-tech companies within Israel.  There is not a political party, neither right nor left, that publicly favors greater privatization of government run agencies.  While all parties are superficially opposed to monopolies and cartels, not one will instill free market competition or put antitrust policies in place.  All the parties ran on a left-centered or far left socialist platform.  None of the parties are for privatizing state-owned lands, non-state-financed universities, expansion of school choice, or use of vouchers.  No party ran on a platform to seriously reduce the dimensions of the Israeli welfare state.  So, how can a moderately taxed, fast-growing economy sustain such laws? Plaut says it’s the rhetoric of the politicians—they say one thing to the public and do another in secret. Israeli Prime Minister Benjamin Netanyahu (of the Likud party) talks about the status quo and then tries to bring in competition to their ports to fight the unions.  The financial markets are at .025 percent short term lending rates (Trade Economic, 2019).

The Israeli government has taken a big interest in the innovation and entrepreneurship community. It spends more than any other developed country on research and development.  Partnerships between the country’s private and public sectors fuel experimentation and innovation.

One initiative taken by the Israeli government in 1991 was to set up a Technological Incubation Program. The program currently includes 24 incubators: 22 in technology, one in industrials, and one in biotech, and is mostly privatized through public initiatives.  Start-ups are incubated for two years with funding ranging from $500,000 to $800,000, only to be paid back once the start-up begins generating revenues (Israel Innovation Authority, 2019).

Why Does Entrepreneurship Succeed?

The amount of sheer innovation coming out of Israel is truly impressive. How and why the Israeli people became so innovative can be credited to the fact that they need such innovation in order to exist.  It serves as a survival mechanism, the fact that they are so flexible, so quick with ideas, so innovative.  That’s what keeps them alive here, not only financially but literally.  Built in the wake of the Holocaust, Israel declared its independence in 1948 and was attacked by five of its neighboring countries simultaneously. Innovation took on a whole new meaning as its role became akin to survival, making the difference for Israel between existence and obliteration. For Israelis, there is a real cultural understanding from a young age that they need to be quick and innovate in all areas of life.

The numbers of mergers and acquisitions happening in Israel is staggering. The Israeli cybertech start-up, Sygnia, was acquired by Singapore’s Temasek Holdings for an estimated $250 million.  The return for the Israeli-owned firm was over 50 times the initial investment.  Last year, Intel purchased an Israeli company called Mobileye—a pioneer in autonomous car technology—for $15.3 billion (Haaretz, 2019).

Tech start-ups may not be the first thing that comes to mind when many people think of Israel—the country’s political strife is what makes headlines—but Israel’s achievements in innovation and entrepreneurship are remarkable by any measure for a tiny, embattled nation of 8.8 million people that has only existed for 70 years.  Just look at Tel Aviv and its strong and mature start-up ecosystem, with easy access to many experienced angel investors, venture capital firms, mentors, and talent.  This ability to get much-needed cash for start-ups is a must in a small economy like Israel, and there is a good reason for why Tel Aviv is nicked name the Silicon Valley of the Middle East.

In the Tel Aviv tech scene, where sharing knowledge is considered the norm, all start-up entrepreneurs have adopted an open-door type of policy for the sharing of information.  Companies are able to easily get really great tips from seasoned techies and mentors.  This is the opposite of the United States, where all employees in the tech industry must sign a non-compete and non-disclosure contract before being hired.

Another important factor in Israel is that it has a young, diverse, and creative population.  It’s an inspiring place to live and work, with a talented pool of Universities offering a wealth of people to recruit from. Universities in the country produce plenty of research, much of which can be turned into viable and marketable products.  In that, Israel has plenty of experience: two out of the three oldest university-based technology transfer companies in the world are in Israel.  One is Yissum, which is owned by the Hebrew University of Jerusalem and in 1964 became the third tech transfer company ever to be set up.  The first one was in Wisconsin in the U.S. and the second was Yeda, at the Weizmann Institute (also in Israel).  Tech transfers allow investors to come into the University and purchase research at an early stage, and in return, the University gets a licensing agreement.  This helps to perpetuate the cycle of research, development, and money.


Despite its small population of only eight million, Israel is a global leader in the fields of science, technology, and innovation.  Known after the best-selling book as the “Start-Up Nation,” Israel continually ranks at the top of global business and technology rankings. It is ranked as first in the world for innovation capacity, first for business expenditure on research and development (R&D), and first for entrepreneurship, (IMF and WEF Global Competitiveness Index, 2018).

Although Plaut describes the two fractured government parties of Israel as having more of a Scandinavian type of socialist approach, the government of Israel nonetheless protects and even encourages innovation and entrepreneurship.  Israel has expended 4.38% of its GDP on R&D—the highest percentage in the world (Innovation for Growth, 2013).  By maintaining a strong scientific and technological infrastructure and leveraging the close links between academia, industry, and government, Israel produces innovation and technology well beyond what is expected of its tiny size. The way Israeli youth are trained to innovate for survival, the community spirit around entrepreneurship, the government cultivating innovation, and the financial ability to fund start-ups, are all reasons for why Israel is known as the “Start-Up Nation.”


Haaretz. (2019). Singapore investment giant buying Israeli cybertech firm Sygnia for around $250 million. Retrieved from

Innovation for Growth. (2013). OECD science, technology and industry scoreboard [PDF File]. Retrieved from

Israeli Innovation Authority. (2019). Taking innovation to the next level. Retrieved from

Plaut, S. (2016). Israel’s socialist dream vs. capitalist realities. Retrieved from

Trade Economics (2019). Israel interest rates. Retrieved from

U.S. Small Business Administration. (2016). Frequently asked questions. Retrieved from


Taking Control of Your Future Finances

First and foremost, I want to make a disclaimer: I am not an investment advisor. I have been an entrepreneur for the past 25 years and am a person with some success who questioned the traditional forms of investing (i.e., Merrill Lynch, TD Ameritrade, Edward Jones, etc.).

The traditional way of investing is when you give your money to an investment advisor who then passes it onto a portfolio manager. That person then invests your money in a formulaic portfolio with thousands of other investors, hoping to beat the S&P 500, which generally will not happen. Then, you get monthly reports that look beautiful, but you don’t know how to read them, so you have no idea how much they are charging you or how much money you are truly making. Sound familiar?

As a 58-year-old man, I wanted to use my entrepreneurial spirit and innovative processes to find a better way to control my money with the highest possible return and the lowest risk.

When I sold my last company within my Family Office Private Equity Firm in October 2018, I was sitting on a bunch of cash. The banks at the time were paying 0.75% interest on a 1-year CD (known as a certificate of deposit, which has a set maturity date and interest rate), a savings account was paying 1.52%, and a 1-year money market account was paying 2.40%. These returns were not exactly setting the world on fire, and although very safe, they were not for me.

As an accredited investor (a person or a business entity who can deal in securities if they satisfy one or more requirements regarding yearly income and net worth even if they may not be registered with financial authorities), I had access to deals that most of my friends did not. The returns were high, but the risk was even higher. The investments were mostly in start-up companies coming through an Angel Investor Network (providing seed funding for start-ups). I did well in this space, but as I turned 50, the risk was too high for my comfort level.

What were my options?

I could pay expensive investment advisors broker fees whether my investments increased or decreased. That’s not a bad gig, being one of those advisors, if you can get it, because you’ll be getting paid whether you win or lose. While most financial advisors won’t lie, many will obfuscate clients to keep you from finding out how much you are actually paying. You could go to a discount broker (for example, Vanguard) and purchase low-cost, index Exchange Traded Funds (ETFs), which Investopedia defines as “a collection of securities—such as stocks—that tracks an underlying index.” It’s not difficult to do, and there are a plethora of different types of fees and sales charges that advisors will collect: front-end loads, contingent deferred sales commissions, 12B-1 fees, mutual fund management fees, operating expenses, asset-based fees, the list goes on (learn more about these different types of fees on

Since the S&P index is the gold standard, I started tracking it and found out the following: the S&P 500 Price index returned a negative -6.59% in 2018 and 6.793% over the past 10 years (DQYDJ, 2019). Now you need to subtract out your investment advisors’ fees (the average is 2%) and inflation of 1.951% over the past 10 years (Stat Bureau, 2019), and you are left with a whopping 2.843% return on investment. Now, these are rough numbers, but they still did not interest me. So, what was I supposed to do?


In 2002, I had the pleasure of meeting Eric, a hard money lender (a person who makes loans on properties and does not rely on the creditworthiness of the borrower, but instead, looks to the value of the property). Eric taught me a lot about finance, debt, and investing. He talked about being in control of your financial destiny by investing in what we today call, “alternative financing.” I started investing in hard money deals and was making a 12.5% return on my investment, which I would then reinvest (compound interest). Now my money and interest are making interest. Although there was a little risk of the borrower defaulting, we never made a loan that didn’t have at least 40% equity in the deal. For example, a house would be appraised for $100,000, and we would lend $60,000 to the borrower. What I’ve learned over the years is that it’s all about the underwriting of the borrow that will save you in the end. Although we have had two people default on our loan since 2002, we were protected by the equity in the house and made more money than the loan and interest amount.

This brings me full circle. As previously discussed, I was sitting on a bunch of cash. I liked the model of hard money lending, but I wanted to see if I could make more than 12.5% year over year—with no fees.

While having dinner with friends, I learned that one of them, Gayle, was a broker for a company that made merchant cash advances (funds provided to small business owners in exchange for a percentage of the business’s income, usually credit card transactions, over time. Payments are generally made daily or weekly using a percentage of the business’s daily credit card income). As a small business owner, I know how important cash flow is to the survival of a company. As Gayle told me about the unscrupulous companies in the industry taking advantage of the small business owners in need, I thought I could create a better and safer transaction experience for small business owners while at the same time providing them with much-needed and affordable cash. Here was a type of alternative financing that I could sink my teeth into. I would buy future credit card sales between $5,000 and $25,000 for no longer than six months and supply small business owners with much-needed cash flow.

The business model was perfect; I was helping companies grow while making a nice return on my investment. As I learned from Eric, it was all about the underwriting of the client. My wife, who was Senior Vice President for credit risk at one of the big Wall Street banks, knew exactly what type of client we were looking for. The process went so well that my friends and family asked if they could lend money to our clients for a nice return. Before we knew it, we were financing small businesses and helping friends and family enjoy returns that only accredited investors previously had access to.

The company my wife and I started is called the Family Business Fund. We ended up hiring Gayle as our full-time broker. She is amazing at making sure our clients DO NOT overextend themselves.

If you are tired of the standard 3%-6% return on investments and are interested in alternative investment opportunities while helping others, please feel free to contact and mention this article. I am also able to consult with my clients on the importance of using good, safe cash flow methods in order to make their company flourish.

If you’d like more information, please feel to contact me directly at or go to my academic web site for more white papers and research at 


Does Education Help Entrepreneurs Succeed?

The other night, I was having dinner with some friends when someone asked me a typical American question: “What do you do for a living?”
“I’m a professor at a local university and teach entrepreneurship,” I replied, knowing the usual follow-up question that would come next: “Hasn’t Bill Gates (Microsoft), Steve Jobs (Apple), Mark Zuckerberg (Facebook), and Larry Page and Sergey Brin (Google), shown that you do not need to go to college to be a successful entrepreneur?”
There is a growing misconception that higher education is not needed for entrepreneurial success, but that is just not true. A Kauffman Foundation study revealed that over 90% of American tech company founders hold a bachelor’s degree, and those with MBA’s are able to start and build their companies faster.
For the passionate entrepreneur, educational programs (especially those using the case study method) offer a great place to start learning practical skills that can reduce the learning curve for running a company. Let’s look at four ways entrepreneurship education can help the aspiring entrepreneur:
1. Innovation Labs (i-lab) and Accelerators:
There’s certainly overlap between incubators and accelerators, but the big difference is in the stage of the start-up. An incubator is a place where pre-revenue start-ups go to learn about their business model and how to build a company. The accelerator in most cases is post-revenue, has a specific amount of time in the accelerator, and receives a certain amount of funding for equity in the company. They are more interested in creating growth with the assistance of investors and connections.
There are 243 i-labs and accelerators located within universities around America. The University I teach at is creating an i-lab, which is slated to open April 11, 2019, for students, faculty, and local start-ups. These i-labs and accelerator programs connect young entrepreneurs to real start-up resources such as business mentors, lawyers, marketing personnel, classes, accountants, access to investors, and much more. This type of immersive education in entrepreneurship is harder to come by when you are starting out on your own.
2. Experiential Leaning
It is imperative that when studying entrepreneurship, you choose a university or set of courses that are taught by professors with real experience in the start-up world. It is just as important that the class be an experiential learning class (which emphasizes “doing” by applying learned skills, instead of just learning from the textbook). While some believe that entrepreneurship is not an innate talent that people are born with (which is a debatable claim), and you can therefore study to be an entrepreneur, entrepreneurship is—above all else— a skill that can be cultivated through learning, studying, and creating businesses. I agree when people say, “You can’t learn to be an entrepreneur from a book,” because books alone will not teach you all you need to know. That is why experiential learning must be part of the entrepreneurial development process. It is absolutely critical.
Entrepreneurs are much better off learning by “doing” and meeting mentors who have been down the start-up path and experienced most things themselves. These mentors are invaluable when it comes to learning and making the fewest mistakes as possible. They can give you advice from the journey they forged before you. Learning from the mistakes they made is one of, if not the, greatest opportunities to grow as an entrepreneur.
3. Learning Leadership Skills:
It’s often said that more than half of new businesses fail during the first year. According to the Small Business Association (SBA), this isn’t necessarily true. The SBA states that only 30% of new businesses fail during the first two years of being open, 50% during the first five years, and 66% during the first 10.
The good news? Business majors with a track in entrepreneurship are required to take courses in leadership, problem solving, entrepreneurship creation, and introductory management skills, which heighten their chances of defying those statistics.
Entrepreneurship courses like the one I teach, “Presentation Strategies for Entrepreneurs,” will help you determine whether your business model will be feasible before you put any money into your new venture.
When I truly understood that I was never going to be the smartest person in the room just because I was CEO, I started trusting my expert employees to do what they do best: create and execute. I learned that I was only a teacher that gave them the vision they needed, and then I would turn over the reins. The secret then is to measure and double measure my metrics to help guide my employees. This type of leadership worked well for me. Leading is knowing where you are going and communicating that clearly to those working with you.
4. LOVE what you do:
As I tell my students at the beginning of class and the closing of the semester, “You have to do what you love, because you will spend one third of your life doing it.”
Entrepreneurship is very lonely at the top. It consists of ungodly amounts of worrying, anxiety, time, effort, and much more. If you don’t like being on the edge—living life one day at a time—then entrepreneurship is not for you.
I was an airline pilot for 20 years and hated it! When I created my first company in 1992, built it, and sold it to a larger firm, I knew I was going to be an entrepreneur for the rest of my life. The 25+ years since then as an entrepreneur have been the most exhilarating, educational, and fun years that I’ve had in my entire life.
Teaching entrepreneurship at universities is also filled with a great deal of excitement. Being able to give back what was so freely given to me is the joy of my existence these days.
You must do what you love, or you will be miserable for a long time.
Happy entrepreneuring!😊


Entrepreneurship Across Different Cultures

As I get ready to start my Doctorial studies in Business Administration at Felician University, I’m already thinking about my dissertation that is due five years from now. In my thesis, I’d like to explore how different cultures other than our firmly established American culture of entrepreneurship view entrepreneurship, and what makes the American entrepreneur so resilient and plentiful?
Entrepreneurship is often thought of as an “American thing” and reminds us of “the American dream,” “bigger is better,” “of course I can do that,” and a whole list of other sayings (I myself have said many of these statements). We also think of the unlimited upward social mobility, and the belief that if you have a good idea and a good work ethic, you can start your own company and make plenty of money (which is sometimes true, but most of the time, not).
We also tend to celebrate the American garage heroes, such as Mark Zuckerberg, who started Facebook and the whole social media craze; Larry Page and Sergey Brin, who started Google and data analytics; and the renegade Elon Musk, who constantly pushed the envelope of ideas (and still does), even when most people didn’t believe his ideas would work.
Let’s look at some highlights of American entrepreneurial culture, as well as some different entrepreneurial cultures, such as those of Germany, Sweden, and China. These are but a few examples, but even with a brief look at how some of these cultures view entrepreneurship, we can begin to understand how Americans and other countries can further develop their entrepreneurial drive and methods by incorporating the tactics, attitudes, and experiences of different cultures.
Americans are the young kids on the block with the “can do” attitude and the “don’t tell me what to do” belief system. Personally, growing up in a solid lower middle-class family with an entrepreneurial father, who quit his job one day and started a busing company without a busing license, set me on my own entrepreneurial path. At the time, my father had three little children and a stay-at-home wife. This is the typical American dream: working hard and making something of yourself. Despite the many years of lean times, and dying at the young age of 54, my father’s dream and hard work turned out well. After all, this high school dropout ended up employing many people and created a successful bussing company.
In America, there is the mythological figure of the entrepreneurial billionaire who gets incredibly rich, incredibly fast. However, alongside that figure sits a very different reality. This different reality defines “entrepreneurial culture” in the United States as being inconsistent with the “notion of America.” This may seem counterintuitive, since the American dream was built on hard work, innovation, and the hunt for success, but if we take a look at some American trends, it will explain why entrepreneurship no longer fits into the way of America in the same way it used to when it was framed as the American dream.
According to the Kauffman Foundation, the American education system is still weighted toward placing graduating students into existing big companies, rather than equipping them with the skills necessary to start their own businesses. Some high schools are now offering a few entrepreneurship classes taught by non-entrepreneurs, but higher education is still primarily geared toward providing students with the necessary skills to climb the corporate ladder.
It is worth considering, however, that the culture of entrepreneurship is still relatively new. The Kauffman Foundation suggests that the prestige of entrepreneurship came as a response to recession-era layoffs in the 1970s and 1980s, leaving entrepreneurship as the only option for advancement. As the culture continues to grow, we can notice a growing interest in entrepreneurship, as collegiate courses on design thinking, innovation, and entrepreneurship spring up across the country.
Expanding one’s perspective on entrepreneurship is important if one wants to become a more successful business leader. The newer courses offered in entrepreneurship are a step in the right direction, but it takes more than that. While your personal history, culture, and values are all important, they shouldn’t blind you to other perspectives from around the world, because they, too, have plenty to offer. We now live in a globalized world, so, Americans can and should learn more by broadening their approach. This will help people find more creative solutions, build a stronger business, and possibly even find more fulfillment in their work and role as a business leader.
According to the U.S. News & World Report’s annual “Best Countries” rankings, Germany is, for the third year in a row, considered the world’s best country to be an entrepreneur.
Germans have a culture built around work ethic and are a notoriously driven people. However, despite its having been ranked as the best country for starting a business, doing so is much more difficult in Germany than it is in other countries. In fact, the World Bank ranks it 113th in the world in terms of ease of starting a business. Part of the reason for such difficulty is because Germany prioritizes jobs in the government and in large, established firms. The most talented and hardest working people gravitate toward established jobs, mostly for prestige and advancement. This leaves entrepreneurial opportunities less explored and less celebrated, at least by German standards.
Yet, the country still sees decent rates of entrepreneurship, thanks to an immigrant population that brings more entrepreneurial values into the country. How Germany manages to be one of the best countries for entrepreneurship, despite its difficulty to start a business, is a question worth exploring, because we can learn a lot about entrepreneurial strategy.
The World Bank has ranked Sweden in the top ten countries for entrepreneurship. The article continues to rate Sweden, along with entrepreneurship, as the most business-friendly country, most culturally influential, most modern, offering high quality of life, the ability to retire comfortably, transparency, and gender equality. It is also considered the best country to headquarter a corporation, raise kids, live green, and get a great education, and it is among the best countries overall. But this is a Socialist country, so how can all of that be? Interestingly, Sweden has a 90% privately owned business community. Although the ease of starting a business in Sweden is rated high, staying in business may be tough due to the very favorable labor laws, and the tax burden placed on business owners. Looking at how those who managed to both start and stay in business should offer us huge insights into innovation and entrepreneurial tactics.
For the past few decades, China has been the manufacturing hub of the world, but Chinese culture is shifting to focus on the merits of entrepreneurship, as China attempts to reposition itself as a growing tech innovator. They are making this shift through education, governmental assistance, and culture.
Statistics show that the number of Chinese students studying abroad at higher education institutions in the United States during the 2016-2017 academic year was almost 351,000 students. The Chinese government has also taken multiple initiatives to foster increased rates of entrepreneurship, including a $338 billion investment into government-backed, tech-centric, venture capital firms. The increased availability of cash for entrepreneurial ventures is fueling a renewed interest in innovation.
Chinese citizens are hungrier for success and are willing to make great sacrifices for the chances of success; accordingly, Chinese start-ups tend to grow more rapidly than their American counterparts. If Americans can understand how entrepreneurs in China do business and grow so quickly, they can apply it to their own American businesses.
Of course, there are similarities in each entrepreneurial culture. Some of the tactics and values offered by different cultures can be reflected in American culture, but the differences in other entrepreneurial cultures offer Americans the chance to learn significantly. The attitudes, strategies, and entrepreneurial mindsets of our peers across the world can provide us with great, applicable knowledge. Taking the time to understand the similarities and differences between American entrepreneurial culture and the different entrepreneurial cultures around the world can create beneficial change in the way we do business and think about innovation.
If you’d like more information, please feel to contact me directly at or go to my academic web site for more white papers and research at


Overcoming Obstacles Is Key for a Successful Entrepreneur

Overcoming Obstacles Is Key for a Successful Entrepreneur

Entrepreneurship is not a sprint, it’s a marathon. Successful entrepreneurs don’t have the expectation of “finishing,” but they understand that it is all about overcoming the next obstacle that presents itself. If you do have the expectation of “finishing,” you won’t continue to push yourself to step outside of your comfort zone enough to grow. Entrepreneurship is like an escalator going down, and you are standing still, observing all the way, as opposed to sprinting right to the bottom. As an entrepreneur, you must keep seeking out the things that truly help your business achieve explosive results, and discovering all those things requires you to stretch yourself beyond your comfort zone.
Becoming a successful entrepreneur means understanding that hard times are when you need to push forward the most. You will have times of unbelievable joy, as well as more than a few setbacks. During the times of joy, you may feel like you can take over the world. It can give you the strength and motivation to continue to put in the long hours that are required to grow your business. During the hard times, negative feelings and emotions can easily take over, and before you know it, you’re feeling sorry for yourself, and things start getting dark very rapidly. This kind of funk is something you must snap out of quickly, or it will take you down. As an entrepreneur, you are at the top, so there are few people to turn to except other entrepreneurs and mentors. Even though it can be extremely difficult to pull through the hard times, it is possible. I want to share with you a few things that I’ve done to help myself during the down times.

1. Overcoming Problems – The only way to get through obstacles is to start by acknowledging that they exist. Your thoughts act as the gateway to your feelings and emotions. There is a very wise Buddhist notion about how what you think about and focus on is what you’ll attract more of into your life. If you believe you are failing, then you will, and it’s over. When you’re dealing with obstacles, your thoughts focus on what you can’t control and why that situation is happening to you. Instead of falling into that negative, cyclical thought process, give yourself a few minutes and take control of your thoughts. Focus on what brings you joy and what you’re grateful for in your life. It’s hard to be down when you’re expressing gratitude. It will amaze you how the right solutions come into fruition when you focus your mind on positive and creative solutions.

2. Embrace Change – Growing a business is not easy, or the world would consist of more than just 3% of entrepreneurs. Life is messy, and change can be uncomfortable, yet change is absolutely essential for entrepreneurs. There are always going to be things you can’t, and shouldn’t, try to control. There are, however, things that pop up that you can do something about, and situations that you can exercise some control over. For example, if your marketing plan no longer works, adjust it, and if sales are down, go back to what worked and make small adjustments. Or, if an employee is causing more trouble than he/she is worth, remove them immediately before they influence the others. Create a plan that will help you get on the path to recovery. There are things you can fix in your business no matter what is happening. First, identify what the problem is, then, do something about it. Focus on results.

3. Get a Mentor – Some obstacles feel like they are more than you can handle. Seeking counsel and support can be the difference between getting through crises or failing. Don’t try to be the super hero—seek help! One of the best things you can do is make decisions that help you recover, and seeking help is one of those decisions. Talking and planning with someone who understands your situation and has experience making it through a crisis is indispensable.

4. Make an Action Plan – Make decisions that are action-based. If you are contemplating a decision that will push you toward an action to help your business, make the decision! I’ve found that one of the best ways to recover from difficult situations is to take massive, laser-like action. Taking action regarding the things you can control will give you progress, confidence, and results. As you consistently take action, you’ll be closer to your goal before you know it.
I’ve found that obstacles always become my most productive learning moments, and they don’t have to be business breakers. I have learned from each failure, and have used them to make myself a stronger and wiser entrepreneur. I’ve seen how the most successful entrepreneurs understand that it’s not the crisis or failure, but the response to that crisis or failure, that determines how successful you’ll be. Stay strong, process your thoughts, create a plan, and then take action. It will get you through a crisis every time!


Business Mistakes Transformed into Knowledge

As I ponder what I’ve learned over the years as an entrepreneur, I can confidently say that my biggest insights have come from my mistakes. I would like to share these educational pitfalls with all new entrepreneurs who are starting new businesses. The number of mistakes I made as a new entrepreneur was painfully high, but I would not change those learning experiences for anything. However, to assist the new entrepreneur who may read this article, I wanted to write about what I should have done differently in business. I would like to invite all seasoned entrepreneurs to add your experiences to this list.


I really don’t believe in failure. I believe that what looks like failure is actually a learning experience with the opportunity to move you in a different direction. Every time I start a new company, it is an opportunity not to repeat the past, but to learn from my past mistakes. After many years as an entrepreneur, I finally have the experience to identify how not to follow the same path of mistakes over and over again. I would like to share some of these insights with you, so you can avoid some of these mistakes, too.


My biggest learning experience in business was when I had almost lost it all. I did the typical entrepreneurial financing for the first restaurant I opened: I maxed out 10 credit cards, leveraged my kid’s college funds (they were five and six at the time), put my home up as collateral, borrowed as much money from family, friends, and fools as I could, and personally signed for everything. The following are a few pitfalls that I learned from this experience, which I would change if I had to do it over now.


  1. Admit you’re in trouble – The ego has killed more businesses than I can count. When the proverbial you-know-what is hitting the fan, most people, including myself, stick their heads in the sand. This was the worst thing I could have done when my restaurant venture was failing. These are the times you have to ask for help and look the problem straight in the eye. When I finally asked for help, it was amazing how many people came to my rescue—landlord, vendors, the bank, and other experts. It’s such a liberating experience when you learn exactly what’s going wrong, and the solution to fix it. For me, the problem was that my partners were stealing from the company (due to a lack of financial understanding). This was an easy fix, and then I moved on.


  1. Partners – This should be the most researched area when starting a company, and yet, is the least respected. A partnership dissolution is worse than a divorce. When it comes to money, everyone changes. I recommend a serious background check, a credential check of past employers, and a review of tax returns and personal financials. If your partners are unwilling to comply, move on. When I started the restaurant, I hired the first person who told me he had a great deal of restaurant experience, which I later found out was false. Writing a very clear job description for each partner helps during the times when the lines start getting blurred due to growth. Each partner has their strengths and weaknesses, so make sure they are outlined in detail.


  1. Operating agreement – This saved me from a partner I had in a consulting firm based out of New York City. After expanding the company 5X, he thought creating a mirror company and taking the clients was legitimate. (A little side note: beware of the attorneys who use boiler-plate operating agreements. There is no boiler-plate anything when it comes to partnerships and entrepreneurship. Every company and partnership is different, so you need to treat them with regard to their highly individualized needs. Example questions you should be asking are: what happens if one of the partners dies? Who gets the stock? Does it go to the spouse? If so, should they receive the same pay for doing no work? What happens if one of the partners leaves within a year? Do they get to cash out for only one year of service? What if a partner is caught stealing? The questions could go on forever, but make sure you ask the tough questions in the beginning—it will save you hundreds of thousands of dollars in the long run.)


  1. Financials – The number one reason businesses fail is a lack of understanding when it comes to financial statements. This was the biggest learning experience of my career, and it proved to be a game changer when I took control of it! When I started my first restaurant, I hired a business broker who built business plans and developed all of my financials, without explaining any of it to me. What I learned from this mistake was that whoever knows the numbers is in control. There are three financial statements you should know as well as your children:


      1. Cash Flow Statement. This is the lifeblood of the company, yet it is one of the least understood aspects. When there is no more cash, the lights go out. You must hoard cash in the beginning, middle, and end.


      1.  Profit and Loss Statement. What we learn from this document is how much revenue comes in and how many expenses go out. The problem here is that your mortgage, accounts payables, etc. are not taken out of the bottom-line number called your net profit. So, it is possible to have a large net profit and still be bouncing checks—which is exactly what happened to me!


      1. Balance Sheet. The balance sheet is even less understood than the cash flow statement. The balance sheet helps you understand certain types of ratios. For example, I do an inventory ratio (how long my inventory is staying on my shelves), and a current ratio (how much short-term cash I have compared to short-term debt), so I know the health of the company.


  1. Know your market – Until I discovered the Customer Development process in conjunction with the Business Model Canvas methodology, I was a poke-and-hope type of guy. I believed the innovative idea I had would work because I said so. The idea that someone would try to start a company, without asking at least 100 people, companies, or potential customers what they think of their idea, just makes no sense. By taking time and doing the Customer Development process, along with a detailed Business Model Canvas, you develop a clear understanding of who your customer is, and what business model is best to deliver your product or service. This process has saved me a great deal of time, effort, and money. Below you can view an outline of the Business Development Model.



                       Business Development Model



If you are a new entrepreneur just starting out, try to remember that mistakes are a crucial part of your entrepreneurial journey, and more importantly, your success. You will make them time and time again, and while it may seem like the end of your business (or the world) at the time, remember to seek out the learning opportunities your mistakes have offered. But, also remember that you are not the first entrepreneur making mistakes out there. Many have done so before you, much like myself, and you can learn from us. If you’re going to make mistakes, make them original. Otherwise, why waste your time, money, and effort? Instead, ask questions from your mentors, and carefully study how to avoid common mistakes.






In April of 2017, I decided to leave academia and my Private Equity Firm to retire in New Jersey and be close to my family. (I know, who retires to New Jersey?) As an entrepreneur, that retirement lasted for about a month. A thought began to plague me: “Wouldn’t it be nice to work full time for another company?” I had never done this before, but I thought I could take my entrepreneurial skills from Main Street to Wall Street. I was going to be an “intrapreneur.”

I was blessed to work with a broker/dealer that had the best reputation on Wall Street, and two of the finest owners a person could ever work for. Although the learning curve was massive, I quickly found out that the same business processes, tactics, and procedures that made me successful as an entrepreneur could be used in my role as an intrapreneur for my new Wall Street firm.

I have researched, taught, and written about big companies that typically struggle with innovation. The research shows that once companies reach a certain size, their investors become more conservative, their leaders less entrepreneurial, and their decisions are managed by consensus. Meanwhile, in an effort to protect their jobs, their employees become less willing to take risks with new and innovative ideas. However, without innovation, companies can get too comfortable with their past successes, just before they find themselves going out of business (e.g., Sears, Blockbuster, Eastern, Pan Am, and many companies on the floor of the NYSE). They lack the innovation needed for continued success.

The intrapreneur’s role, then, is to find new and disruptive ways of doing business, deliver innovative products and services to the market, and foster a culture of innovation to maintain market leadership. Interestingly, intrapreneurs often don’t have job descriptions, and if they do, most of their actual work is done outside what’s written down in the corporation’s policy and procedure guide.

Companies that are not familiar with the intrapreneurial process need to watch out for these four possible pit-falls:

  1. Lack of intrapreneurial learning and validation. Companies and employees unable to do the basics of Customer Discovery for new products and services will be doomed, and will likely fail. It is imperative for your company to bring in an adviser at this point. With the new GIG economy, there are plenty of people like me that would be more than happy to set your company up for intrapreneurial success.


  1. KPI’s not befitting a start-up. Let’s be perfectly clear, a start-up company is not a smaller version of your large company. Metrics must be designed for the start-up, and iterated as information and experience comes in.


  1. Enforcing the corporate structure in your start-up. Enforcing existing management systems is a common mistake when putting intrapreneurial initiatives into motion within a mid to large size company. This will only stifle the intrapreneurial spirit and crush innovation. There are certain systems and processes that only work for start-ups, and not for larger companies.


  1. Strict adherence to company strategy. Making no adjustments to strategy is the life killer of a start-up within a company. The waterfall-type process just does not work. You must be agile, and ready to iterate or pivot on the dime. Again, there are processes for start-ups that work only for start-ups within a company or organization.

You can avoid these four pit-falls if you familiarize yourself with the intrapreneurial process, and if you acquire help from an adviser.

If you are a mid to large company looking for innovation, create a culture of intrapreneurship inside your organizations. Let your employees know that it is okay to spend part of their day jobs tinkering around with new ideas. That it is okay to make mistakes, and that failure will not result in punishment if things do not go as planned. Hire people that have entrepreneurship wired into their DNA; leaders who are not afraid to take risks and make decisions on their own. The company that hired me managed this by first allowing me to teach the owners about the intrapreneurial process and culture. Then, I was able to teach the business unit managers, and finally, the employees, while monitoring, measuring, and iterating all along the way.

As I said before, intrapreneurs don’t typically have job descriptions. Instead, they break the confines of the norm and hunt down opportunities for growth. The innovation that an intrapreneurial culture fosters is indispensable for start-up success within a company. Don’t think you and your company can’t attain such a culture of innovation—you can, and with the right help, you will.

I have researched and written much on this subject and would be honored to share more with you. If I may be of assistance to your company, please let me know.



Can Entrepreneurship be Taught?

I have been asked many times, “Can you learn entrepreneurship in a classroom, or only through real-world experience?” Similarly, I’m asked if entrepreneurs are made or born. I answer these questions with a story. I was a pretty good wrestler in New Jersey and was taught by one of the best wrestlers in the world, Mean Gene Mills. Gene was a sight to see on the mat. It was an art when he wrestled. Gene just had it. I, on the other hand, did not have the “it” and few people do. Nonetheless, I still did very well, because I perfected the necessary skills as taught to me by Gene. The same idea applies to the great entrepreneurs of our time; some people are born with the entrepreneurial drive, mindset, and skills, while others must learn them.

How does one know if they are a natural born entrepreneur? There isn’t a test you can take, but there are a few signs to look out for:

1.    Hate the status quo. You hate just going through the motions, doing what you’re “supposed to do.”

2.    Easily bored. You are simply not loving what you’re doing while working for someone else.

3.    Fired from jobs. You get fired more often than you’d like to admit. Hint: telling the owner what you think when they don’t ask is not a good thing!

4.    Resist authority. Resisting authority was my favorite thing to do as a kid, but doing so got me into a lot of trouble. I would always have to ask the question “WHY?”

5.    Ready to improve everything. You are always looking for ways to streamline and improve processes, policies and procedures.

6.    Not normal. You probably feel different from those around you. Until I realized I was different from my friends, who are 9 to 5 type of people, I always felt different. Then I jumped head first into entrepreneurship, risking everything and that’s when it all changed. Turns out, I wasn’t “normal” in all the right ways.

If none of these resonate with you, but entrepreneurship is something you are passionate about, then don’t worry, the game isn’t over yet. Just as I learned how to wrestle, you can learn how to think and act like an entrepreneur. Allow me to explain my front-row view of how entrepreneurship is changing the face of education and the ever-developing business world.

As a retired entrepreneur who started ten companies and sold them all, I felt a calling to go back to school and get my MBA, so I could teach what was so freely given to me by some of the best mentors. I’ve had the honor to teach entrepreneurship at University of Virginia and, most recently, Felician University. I have learned and experienced a lot about the entrepreneur and am happy to share some of that with you in this article.

We have seen entrepreneurship take root in the curriculums of universities across the country, and its appeal has spread from business schools to disciplines as varied as art, nursing, engineering, education, and many others. Courses offered in entrepreneurship have grown approximately 20-fold. In 1985, there were about 250 courses offered in entrepreneurship at college campuses across the nation. In 2008, that number grew to 5,000, with over 2,000 schools teaching entrepreneurship and creating accelerators and incubators within the schools of business (Kauffman Foundation).

So many of the lessons that I had to learn the hard way are exactly what I teach aspiring entrepreneurs, so they can avoid repeating the same mistakes I made. I teach entrepreneurs indispensable skills and insights that change how they approach their businesses. This can be done in many environments, ranging from universities, to incubators, accelerators, and even mentoring programs. A few of the lessons I teach include how to evaluate opportunity, how the entrepreneurial selling of your company differs from the professional selling of a product or service, and how to effectively communicate about your business. I also teach about some of the pitfalls of agreeing to 50/50 equity splits that are sealed with a handshake at the outset of a new venture. Students learn to highlight tools that improve processes, procedures, and productivity. They also learn how to use data to uncover patterns in the success and failure of new ventures that highlight the consequences of decisions.

I also teach another part of entrepreneurship that is crucial to success: Customer Discovery. Applying the discipline of Customer Discovery can help entrepreneurs avoid spending time and money building a product or service that no one wants to buy. Founders will also learn the skills of negotiation with investors, presenting to clients, marketing a product or service, and even how to hire good, qualified employees.

So, in a nutshell, the answer is YES, entrepreneurship can indeed be taught. It’s the “how to” that really matters; that is, how to do certain things, perfect certain skills, and learn how to ultimately think and act in an entrepreneurial way. Below are a few concepts and processes that students need to walk away with. They must know the “how to’s” of the following:

  •  Identify– opportunities.
  •  Market Research- Evaluate ideas and assess the market.
  •  Value time, money, and work hours– Appreciate the risks and rewards of entrepreneurship.
  •  Customer Discovery– Leverage experiments to validate your idea and refine your business model.
  •  Financials– Discover the key financial decisions any entrepreneur must make in the early stages of a new venture.
  •  Investors– Understand the process of raising capital, and how to speak to investors and understand their “Term Sheets,” which outline business agreements.
  •  Mentorship– Learn from successful entrepreneurs and leading investors, as well as peers.

If you can grasp these concepts and skills, you can enter the field of entrepreneurship; a field defined by breaking the rules, boundless innovation, passion, and even fun.

It’s true, some people are born with an entrepreneurial mindset or skills, and will excel naturally, while others may be a fish out of water and struggle to reach the same point until they learn and perfect those skills over time. People not born with the “it” of entrepreneurship can still learn how to become entrepreneurs, but they must be willing and able to learn things extremely fast. Your success rate increases with each class you take and skill you learn. But, beware, it takes a lot more than some slick power point presentations and nice new entrepreneurial textbook to become an entrepreneur. It takes a lot of grit, risk, and tenacity. Do you have what it takes?

If you’d like more information, please feel to contact me at



6 Red Flags for Restaurant Owners


We’ve all had conversations about starting our own business, and one of the most popular dreams is running our own restaurant. I started my first restaurant in 2001, becoming the first franchise owner and proprietor of a new and exciting casual dining concept. I sold that concept and moved onto my new chain of restaurants in the fine-casual space. What I’ve learned over many years and from many restaurants is what I will be sharing with you in this article. We all love food; we like the social aspect of sharing conversation across the communal table, and it’s an industry where people choose to come through the door. So why does it often go so very wrong?

First, running a successful restaurant is one of the hardest businesses out there. We all know of places that we love to go to—and places that we don’t. It’s also tricky to recommend a restaurant, as sometimes it’s great and sometimes it’s not so great. But there are exceptions: if a place is consistently good, provides excellent food, a convivial atmosphere, and gives good value, we will go back again and again, and recommend it to anyone who will listen. But why is this so difficult to achieve?

Part of the problem is that people get caught up with the romantic notion of being the “main host” and floating from table to table shaking hands, backslapping their guests, and making it look like one big party—which is exactly how it should be as long as life in the “engine room” (or kitchen) is moving along swimmingly.

The kitchen is the heartbeat of the restaurant. If the orders don’t flow in an orderly way and the food doesn’t flow out in a timely manner, cracks will start to appear. Guests expect their lunch or dinner to appear in a certain amount of time—not too slowly and not too quickly—so the whole process has to be carefully choreographed.

That, however, is before we even start to talk about the real backbone of any business: cash flow, sales, and profit.  While all this sounds patently obvious, many people fall into the restaurant industry with no idea of how to price a plate of food, or whether they are going to make any money at the end of each sitting.

With this in mind, let’s analyze a day in the life of a typical Italian restaurant in the heart of a nice town in central Virginia. The average profit margin of a restaurant is between five and six percent, leaving very little margin for error. It’s all about people, product, and procedures. When one of these categories is missing, the whole ship goes down! The object of any business is to make money, so fixed costs must be as low as possible in order to survive the leaner months.  Fixed expenses cannot be brought in line if the gross revenues are too low, so day-to-day management is essential to constantly monitor where costs can immediately be adjusted if things start to go awry.

To this end, I’ve developed six red flags, or indicators, which explain where current problems may be hiding and where future issues are likely to emerge. Let’s go through each of them:

Develop a well-organized accounting system.

Amazingly, most restaurants don’t have any accounting system at all. When I ask my clients questions like, “What are your food, liquor, and labor costs?” I get the thousand mile stare. When I ask them for printed copies of basic financial statements (such as profit and loss, balance sheet, or cash flow), they have no idea what I’m talking about. Since you can’t manage what you can’t count, a restaurant without any of these three financial statements is set up for failure, or, at the very least, a loss of a lot of money and I would consider “flying blind.” The most common problem I see is the owner of the restaurant thinking their accountant is doing the financial statements when actually they are only doing the taxes.

What do the numbers mean?

Restaurant food, beverage, and employee expenses are the top costs. The numbers in Figure 1 show the standard industry average I use for my casual-fine dining Italian restaurants. However, those numbers will vary within the industry, but can be found on the National Restaurant Association website:  The battle begins and ends with these numbers, and not simply because they represent the largest percentage of your total expenses, but because you have the ability to control them. Costs such as utility and insurance are relatively fixed, but you can directly impact your food cost percentage with more effective purchasing, product handling, and menu pricing.  Similarly, hiring practices, scheduling, and even the layout of the kitchen and the way menu items are selected can favorably affect labor costs. That way, when a restaurant’s prime cost percentage exceeds the percentages in Figure 1, it raises a red flag.