By Maggie Gordon
The Stamford Advocate, Conn.
Jill Zhang, CEO of Stamford-based construction technology company Sysdyne, spends a lot of her time switching between focusing on short-term tasks needed to keep her business afloat and long-term goals to help it grow.
“I find myself sometimes, my head can’t do it because the day-to-day is so much,” she said Friday morning as she stood in a conference room at the Sheraton hotel in Stamford. “It can be overwhelming … like turning a faucet on and off to think about the short-term and the long-term goals, and sometimes your head just doesn’t work that way.”
It’s enough to make anyone need a little help, which is why Zhang was waiting to hear a panel, led by local entrepreneurs, who would provide advice on ways to increase funding opportunities from non-bank lenders for small businesses like Sysdyne.
The panel was sponsored by the Business Council of Fairfield County and the Federal Reserve Bank of New York, and panelists included Peyman Zemani, founder and CEO of Shelton-based Logicbroker; Bret Bader, CEO of Norwalk-based Owlstone; and Oji Odezue, founder and CEO of Wilton-based Mingl.
“What we’re good at is building our product. We know that inside and out, and we know our customers. But what we’re not really good at is reaching out to people who have the resources to promote our business and look for investments,” Zhang said. “And things like this are important to help us step up and really grow our business, and I think that’s so important.”
Small businesses are typically looking for loans of less than $100,000 with a fast turnaround, said Claire Kramer, an assistant vice president at the Federal Reserve Bank of New York. But small-business loans are down these days, in large part due to the difficulty many businesses can have securing funding from traditional lenders, where it can take an average of about 30 hours to complete the application for a loan.
Finding new revenue streams can be a puzzle from the beginning, when young companies are forced to tackle valuation.
“Valuation is a tricky question,” said Bader of Owlstone, who said the best advice he could offer small businesses struggling with how much of their equity to offer up to investors early on was to “give away whatever is necessary to properly fund” their businesses.
“The value of a business is so subjective, especially before you’re generating a profit or even revenue,” he said. “It’s really about what you believe the potential of the business to be.”
In the early stages, he told the several dozen businesspeople in the audience that he prefers to work with individual investors, rather than traditional venture capital firms.
“What we’re selling is the long-term potential of the business, and we’re looking for investors who want to be involved in an interesting, compelling business for the long term,” he said.
For Odezue, finding capital from external sources is an important part of growing a business, but he said it’s something that shouldn’t be put on the table until other options have been exhausted.
“First of all, try to build as much value as you can by yourself before you take any money,” he said. “If you can do that, the farther you can take it, then the more equity you can hold onto.”