Monthly Archives: November 2016
The overall vibe of a workplace, from the office layout and break-room setup to co-worker dynamics and company culture, has a huge impact on your team’s performance and happiness. “Positive workplaces tend to exhibit a common set of traits that foster excellence, productivity and camaraderie,” Linnda Durré, wrote for Monster.com. The reverse is also true: If people are physically, mentally or emotionally uncomfortable in the office, they’re unlikely to be successful or satisfied with their jobs. Here are four ways you can improve your work environment and, in turn, employee engagement.
Smart businesses know that a good work environment starts with hiring the right people. “Make sure you’re hiring people who are professional, can work in a team and can contribute to a positive work environment,” said Jazmin Truesdale, a serial entrepreneur and CEO of Mino Enterprises. “One bad apple can spoil the bunch.” The same idea translates to those who are already in the office. When employees are working alongside a high density of toxic workers, there is a 47 percent chance that they, too, will become toxic, Dylan Minor, an assistant professor of managerial economics and decision sciences at Northwestern University’s Kellogg School of Management, told Business News Daily in 2015. Minor called the situation “ethical spillover,” reinforcing that toxicity is, in fact, contagious. “It’s amazing to watch one bad attitude affect everyone’s daily performance,” added Claire Marshall Crowell, chief operating officer of A. Marshall Family Foods/Puckett’s Grocery & Restaurant. “I can’t tell you how many times I have been thanked after letting poisonous employees go. Though it’s a hard thing to do, it ultimately impacts the working environment, which can be felt by not only our employees, but also by our [customers].”
It’s been a four full months since the Title III equity crowdfunding provision of the Jumpstart Our Businesses (JOBS) Act went into effect, allowing small businesses and startups to raise up to $1 million annually in crowdfunded securities investments from both accredited and nonaccredited investors. As of Sept. 15, businesses had raised more than $7 million in capital investments using Title III.
Although Title III is a particularly young section of the JOBS Act, it’s been hailed as a potential game changer for small-scale financing. Whether a company’s projected growth is too flat to interest venture capitalists or an owner simply doesn’t want to end up beholden to one highly powerful investor, Title III is seen as a way to raise growth capital without sacrificing independence. Moreover, campaigns can be targeted at locals within a business’s community, helping to build a loyal customer base that maintains a stake in the company’s success.
WeFunder has tracked the growth of the equity crowdfunding industry so far, and the early statistics appear promising. More than 9,000 investors have contributed $7.14 million so far, helping to fund 29 successful offerings, three of which raised the full allotted amount of $1 million in capital. In just the past seven days, investors from the crowd have contributed $112,068 to small businesses.
For companies like stock-photography gallery Snapwire, which crowdsources made-to-order photos from over 300,000 photographers worldwide, leveraging the power of an already-engaged community led the company to immense success in its Title III equity crowdfunding campaign. In 72 hours, Snapwire had eclipsed its fundraising goal. Now, the company holds about 280 percent of its goal in investments.
“The very truthful reason we got into equity crowdfunding is that we struggled to raise capital from traditional [venture capitalists],” Chad Newell, CEO of Snapwire, told Business News Daily. “We were such a leader in doing this — nobody had run a successful campaign yet at the time. I had little expectations other than a fair degree of confidence that we’d be successful.”
For Newell, the key to success is about the market response to an idea, and Snapwire was lucky enough to have that 300,000-strong community of photographers who wanted to see the company succeed, he said.
“The crowd collectively makes the decision as to whether this is a good investment or not,” Newell said. “We’re 273 percent funded now, and we’re going for the full” legally permitted amount of $1 million.
Vincent Bradley, CEO of equity crowdfunding platform FlashFunders, said he is convinced Title III holds the potential to revolutionize finance for truly small businesses. While Bradley acknowledged that the provision is still in its infancy and there’s “work to be done,” he said equity crowdfunding holds special promise for brick-and-mortar businesses and those in highly regulated industries, such as alcohol or health care.
Many aspiring entrepreneurs have an idea for their business but lack the capital to actually start it. Brand-new businesses are often turned down for bank loans, and even if your business is established, funds can still be tough to secure. Loans funded by the Small Business Administration are usually more accessible, but they are becoming increasingly competitive.
So what options are left for someone aspiring to be a small business owner? Here are six options beyond bank loans for financing your startup.
Online lenders have become a popular alternative to traditional business loans. These platforms have the advantage of speed, as an application takes only about an hour to complete, and the decision and accompanying funds can be issued within days. Because of the ease and quickness of online lending, economist and former U.S. Treasury Secretary Larry Summers said at the 2015 Lend It conference that he expects online lenders to eventually reach more than 70 percent of small businesses.
Like all startups, young tech businesses need to find adequate sources of financing to ensure they can get off the ground. But how can you tell which source of financing best positions your new enterprise for success? Recently published research from the University at Buffalo School of Management suggest that tech entrepreneurs might be better off partnering with venture capitalists than angel investors. While researchers note that both angels and VCs are important, they found that VC-backed companies enjoyed several advantages. Tech startups backed by VCs were more likely to issue stocks sooner and often found buyers sooner than those backed by angels, according to the research published in the Journal. The difference, researchers posit, is that venture capital comes along with a larger network, giving them a greater reach when looking for additional investors. “Angels and venture capitalists are both critical to innovation in business,” said study co-author Supradeep Dutta, assistant professor of operations management and strategy in the UB School of Management. “But it’s not enough to just get a patent. You need a strong network to shape the impact of the innovation, and venture capitalists have that network.”
Dutta attributes the influence of VCs largely to the difference in how money is invested; angels are investing their own capital, he said, whereas VCs are managing a fund capitalized with other investors’ money, meaning tighter controls, stricter contracts, and harder deadlines. Because angels are more flexible, they often put less pressure on startups to quickly innovate and grow. Of course, sometimes an angel’s flexibility can be an advantage, Dutta added. While their limited influence means angels can only guide innovation so much, it also helps keep founders happy and willing to experiment, which can sometimes lead to breakthroughs. “While the stringent control rights that venture capitalists have can move startups toward success, it can also create conflict with founders,” Dutta said. “Angels, who are investing their own money, tend to be more flexible and less focused on immediate financial returns, allowing longer-term experimentation.”