When entrepreneur Ken Kay started his first business, he didn’t have a proven product. He didn’t have any customers. But he did have an undeniable passion, which he shared in a May 8 panel discussion at Princeton.
“I felt excited,” said Kay, who ultimately sold the business to Microsoft Great Plains and now chairs the Jumpstart New Jersey Angel Network of private investors. “I had control over my own destiny. If you’re considering being an entrepreneur, you have to have a similar passion. For you, there’s no other choice – you have to do this.”
Kay shared his story and offered advice to audience members at the event, “From Founders to Funders: Nurturing the Next Generation of Entrepreneurs,” which was sponsored by Princeton’s Center for Innovation in Engineering Education and Jumpstart. He was joined on the panel by fellow Jumpstart members Bill Martin, the co-founder of the Raging Bull online finance community, and Mario Casabona, who developed anti-jamming technology for GPS systems that was bought by Honeywell in 2004.
Engineering professor and serial entrepreneur Ed Zschau ’61, who has taught the University’s popular “High-Tech Entrepreneurship” course for 19 semesters, moderated the conversation. In his introduction, he emphasized that many things must be “right” – including the situation, the people, the plan, the community and the resources -- if a start-up business is to be a success.
Through comic anecdotes (Casabona initially intended to develop jamming technology for GPS, until he learned it was illegal – hence his subsequent anti-jam product) and tales of taken and missed opportunities, the panelists confirmed Zschau’s point. But their varied approaches to vastly different markets demonstrated that there are many right ways to launch a winning business.
Despite their diverse backgrounds, the panelists’ careers paths do share some parallels. All of them worked at large corporations before venturing out on their own – Kay at Squibb Corporation (now Bristol-Myers Squibb), Casabona at the Raytheon Company and Martin at Goldman Sachs – which gave them business experience and taught them what works and what doesn’t. And, after selling their businesses, all became angel investors to provide capital to early-stage companies.
Angel investing is a new and growing method to finance start-ups, which, in contrast to the more firmly established venture capital funding, often takes a more flexible approach to setting targets for financial returns. The panelists cautioned that most -- but not all -- angel investors lose money.
“There are a million things that can go wrong” when investing in unproven ideas and products, Martin said. In an attempt to avoid many of these pitfalls, he advised would-be investors to stick to industries and markets that they know well when deciding which companies to fund.
When Zschau opened the discussion to the audience, the panelists were met by a barrage of questions from students, alumni and members of the local business community. The inquiries ranged from a request for the best book to read about entrepreneurship (there isn’t one, the panelists concurred) to a query about the merits of pursuing venture capital funding versus “bootstrapping it.”
While Kay, Casabona and Martin couldn’t offer the audience members a sure-fire way to start a venture that captures the attention of angel investors and takes the economy by storm, they encouraged attendees to follow their dreams as early as possible. Though it may be easier to make the necessary sacrifices to start a company while relatively young, it’s never too late to launch a great idea, Kay added.