entrepreneurship immigrant entrepreneurship

Entrepreneurship Challenges: Financing

For any business owner, the challenges are many – marketing, business growth, profitability and (amongst others) the ever-present challenge of financing. While financing can be a challenge to existing businesses, particularly those looking to expand, in this blog entry I’d like to examine how it impacts start-ups.

Prior to coming to OIN, I spent nearly 7 years in the financial services industry. While I focused heavily on insurance and investments, I did spend a significant amount of time with mortgages and leasing. I was in the industry during a very interesting time, the beginning of this economic shift or recession. All throughout I also managed to see how financing has changed and what it means for business owners.

It seems that these days money is free flowing for tech startups that may have weak (or no) revenue models. Quite simply, millions of dollars are being poured into products that may or not pan out. Of course, the ones that do are phenomenal successes, but these high stakes gambles lead me to ask what about everyone else?

The recent startup visa seems to be geared towards these gambles. While the start-up visa does not specify tech, it is most likely that hi-tech will be the main beneficiary of these venture capital funds. Again, while some of these multi-million dollar projects may create a few jobs, many tend to be short-lived, or absorbed by larger entities. Some may be shelved entirely with their assets stored away to pad a portfolio of patents. Long-lasting benefits to our communities, and are economies as a whole just tend not to happen as a result of these projects.

On the other side, we see small “Ma and Pa” type businesses that require long work hours, have capital needs of their own, and (the successful ones) tend to generate jobs and value for their local communities. These businesses tend to stick around over the long-term, diversify the local economy, and really form the bread and butter of our national economy – in the past 10 years, almost 60% of our new jobs were created by small companies like these. How much do these ventures require?

Many were started with less than $10,000. There succession does require significantly more financing, yet still far less then what the latest App may need, and with far less risk of failure. These are the types of businesses that we need, and unfortunately we are not finding effective ways to give them the capital that they need.

Within my work at OIN, I am constantly looking at ways that immigrants & newcomers can finance business succession opportunities. While traditional lending may work for some, it may not work for all. Sometimes an individual may not be deemed credit worthy, maybe the business is too risky, or some other factor influences. Regardless, there are likely cases where good businesses cannot start, expand or continue because of this barrier.

We are examining several different ways to counter these effects; first, by working with lenders to understand the challenges and potential rewards involved in these transactions. By using the mentorship component of our business succession program, we can reduce the risk to lenders by tapping into the tacit knowledge of experienced entrepreneurs.

Second, we are looking at exciting new finance models. Crowd funding and social impact bonds certainly top the list, although I am sure that new instruments will be created as the economy forces more of us into entrepreneurship and as traditional lending tightens. While it may sound silly, and possibly limiting today, the days of raising equity through a website $10 at a time are likely not far off. And, if our legislation catches up to that of the U.K., we may see Social Impact Bonds becoming a feasible instrument for transitioning businesses.

I hope this will not be taken as an attack on banks; I deal with them in personal and professional life, and without them economic growth would be at a standstill. However, I do feel that we need to look at new models if the old models cannot sold old problems. Please feel free to leave your comments and thoughts on any of these points.


So, what is Digital Napkin?

Digital Napkin

Digital Napkin is a web site set up to encourage up-and-coming entrepreneurs in Sarnia Lambton to share their ideas, strategies and wisdom with others who might be thinking about going into business for themselves. The site offers a wealth of knowledge and pointers from people who have actually experienced the pitfalls of self-employment as well as motivational strategies to keep others on course.

Many find the resources on the site useful, including grant and funding programs and contact information about the municipal, provincial and Federal agencies plus other on-line sites that can assist entrepreneurs.

The name of the site stems from the popular notion that some of the best ideas are scribbled down on serviettes in restaurants and pubs so that they are not lost!

You can view more at!Digital Napkin - Sarnia-Lambton's Entrepreneur Community

entrepreneurship ideas

Business Library: Driven (Kobo)

Driven Robert Herjavec Kobo

Business Library: Driven Kobo Review – Robert Herjavec

I highly recommend this for aspiring entrepreneurs.

Source: Kobo

Price Paid: $11.99

Bottom Line:

A great read for any immigrant entrepreneur, and especially anyone who is a fan of Dragon’s Den. Some great advice, and not what I expected. Herjavec has a nice guy image, and after reading this its clear to him that friends and business are two very separate things. Definitely some good advice tidbits in here!

Detailed Review Below:

In both my personal and professional life, I am fascinated with entrepreneurship, and read quite a bit on the subject. Despite this, I’ve never really taken the time to blog about my business reads. This inspired me to start this series of blog entries, to reflect and share on some of the better business reads that I stumble across. I have quite a few business books in my library (both electronic and in print) so I figured I would start with one that I recently finished – Driven, by Robert Herjavec.

While Dragon’s Den fans will certainly know the name, this is a great read for any aspiring entrepreneur. As founder and CEO of the Herjavec group, the author talks about his humble roots as an immigrant, and how he amassed a fortune between focus, dedication and hard work. This book is full of great stories, as well as some good lessons on business and life in general.

As a Dragon’s Den fan, I always had this image that Herjavec was a nice guy, almost too nice for business. After reading his book two things became clear: 1) Dragon’s Den isn’t really about business and 2) Herjavec makes a clear distinction between business and personal life.

It is clear that Herjavec, in contrast to entrepreneurs such as Tim Ferris, places a high value on hard work and dedication, and demands the same from those around him. This means sacrificing time with family. Herjavec is quick to let aspiring entrepreneurs know that in many cases business will come before family. Herjavec doesn’t sugar coat anything: he makes it clear that many will mortgage themselves to the hilt, work hard, and even then still fail. He identifies common pitfalls, and what he feels truly sets the successful apart from the wantrapreneurs.

Overall, I really enjoyed this book, and found some good, common sense and accessible advice. Also, I found this book to be very well written and probably one of the best formatted e-books I’ve ever read. More than once, I have had a good read ruined by poor presentation.

I recommend this to both seasoned and aspiring entrepreneurs, and particularly those that are interested in seeing what an immigrant entrepreneur can achieve. Herjavec’s family arrived from Croatia with $20 in their pockets; later he would go on to sell his first company for $100 million. This is what immigrant entrepreneurs can achieve.

Article Keywords: driven kobo review