Recently, I was a judge at a pitch presentation of 14 companies that had gone through a 90-day, 12-session training program developed by Founders First Community Development Corporation. The program’s goal is to small businesses owned and operated by diverse founders.
The companies presenting that evening had revenue from $250,000 to $1 million. They were not startups, and none expected to raise venture capital. This was a cross-section of what America calls small mom/pop businesses that are the backbone of entrepreneurship at a very local level.
Most of them serve a small geography, and they are very clear on what problem they solve. Their dilemma, however, is classic — how can they scale up to a few million in revenue and add employees?
Nine million businesses in America have less than 20 employees. Four million have 1 to 4 employees. It was wonderful to listen to the presentations because sometimes it is really easy to get blinded by the billions sloshing around in Silicon Valley. This cohort was the grit of the game — the desire to own your own destiny.
I am very ive of this segment of our society. I believe in chasing the dream. Let me share a few of the companies.
Growler, Jorge Ruiz: The premise is simple. They have trucks that bring the rental equipment back to the yard or out to the customer. Their problem — a lot of demand, so they need financing to buy another truck.
Harden Enterprise Services, Clyde Harden Jr.: The company is in Texas, and they do disaster recovery and restoration. Texas is a good place for that, and recently San Diego might qualify. Same problem — they need financing to grow.
Authentic Muay Thai Supply, Chelsea Pureza: They make authentic equipment for the fighters in this sport. I do not follow MMA, but they have loyal customers. I love when I learn about something new.
IREP, Kelly Johnson: They remove the junk from commercial and residential apartment properties. They recycle of course, but what I love is that they are doing a tough job (what to do with the old couch) that most folks do not want to do themselves.
Pure Health Alliance, Sophia Chang: Her company blends traditional Far East wisdom with modern medicine to prioritize well-being.
Center For Creating Change, Ebony Butler: She makes therapy cards to promote insight and healing.
ESCO Aerospace Mfg. Yvonne Escobedo: She makes complicated airplane parts using C&C machinery. She qualifies for contracts as a minority contractor. She is definitely financeable, but she needs help figuring out the defense system.
Let’s pause a moment. What I saw from these cohorts, and what I often see in the various early-stage companies that come to me for investment or mentorship is a lack of financial understanding.
Balance sheets are a bit of a black hole for many entrepreneurs, and the nuances of debt, lines of credit, revenue-based financing are not taught as often as I think they should be.
Almost all of the presenters had “product market fit,” but getting to the next level really requires a deeper understanding of “money” – where it goes, to whom it goes, why it goes, and what expectations the investor has on getting all of it (and maybe a bit more) back.
Crease Beast, Matt Jones: The product is a small foam insert that fits in a sneaker to keep the crease from forming in the front. I was astounded. Is this really a problem? Well, Senturia, once again you have proven your limitations. The company has $500,000 in revenue with backorders. Huh. Turns out this crease thing is a big deal to sneakerheads.
JCiCreatives. Jaren Collins: This guy is the epitome of charisma and personality. His business is making top-notch videos. I don’t care if they are in focus or not, just hanging with this guy would be a treat.
All in all, a great evening. Small business is the backbone of America. Believe in the dream.
Rule No. 807: “It’s a small world (after all)” — The Sherman brothers, Disney songwriters
Senturia is a serial entrepreneur who invests in startups. Please email ideas to [email protected].
