(I’m republishing this post because of an error in the first posting where I attributed a quote to the wrong person and made an error in a second quote. I apologize for the mistakes!)
"Don’t be an Entrepreneur unless you have too" (because it’s very hard) was one of the pieces of advice last Friday to the 14 participants in the OEN "Off the Record with a CEO" event (formerly the CEO Bus Tour). The tour visited Mike Wright, CEO of WellPartner, and Irving Levin, CEO of Genesis Financial Solutions. Irving is also one of the most active angel investors in the Portland area.
Off the Record is a great event – a chance to spend 90 minutes with two different CEOs and hear some fascinating stories and advice. The tour on Friday was no exception.
Mike Wright’s advice: be completely transparent, especially with employees. Although WellPartner is doing exceptionally well today, the early years were tough times, and yet employee turnover has been very low. Mike attributes that to the fact that all employees own a piece of the company, and to the fact that he has always been open with the employees about the status of the company.
He commented "if you want to find out how loyal your employees are, stop paying them." There were times that WellPartner could not make payroll. When a customer payment did come in, Mike would make the rounds and find out which employees absolutely needed some money to pay the rent or meet some other critical need. With a policy of complete transparency, and treating people with respect. the company lost very few people.
The message from Irving Levin at Genesis Financial Solutions was similar. Irving stressed the importance of integrity – in dealing with employees, customers, and partners. In talking about finding the right market opportunity, Irving’s comment was "I hate having competition". He prefers to find a market nobody else wants, and find a way to be successful in that market. As an example, one of Genesis’ businesses involves purchasing unsecured consumer debt that has "issues" and turning those loans around. That’s not easy work, but it’s also an opportunity that the big banks are not interested in pursuing, so there’s not a great deal of competition.
From an angel investor’s perspective, Irving’s advice to entrepreneurs is that because of the difficulties in the financial world, angel investors are nervous, and angel investment will be tougher to get — there will be "more head wind". So, "if you think you need $6 million, find a way to get it done with $3 million". Figure out how to succeed with less money, and expect fund raising to take even longer than it has in the past. You’ll need an attractive opportunity, a more polished pitch, a good team, and, of course, integrity.