I'm looking for venture-capital firms that invest specifically in companies relocating to their region. What's available, on either a state or a local level? How do I get in touch?
Boca Raton Medical Wellness Center
Boca Raton, Fla.
Venture capitalists do specialize in industries, hoping to gain a competitive advantage when scouting for new investment opportunities. But focusing on relocating companies isn't a popular niche. Such businesses tend to be somewhat mature, so they're already beyond the early high-risk/high-reward stage that appeals to most of the VC crowd, says Bill Wetzel, director of the Center for Venture Research at the University of New Hampshire, in Durham.
Recently, however, some venture capitalists have begun focusing on regional start-ups, preferring those within a few hours' drive. For example, Tom Smith's Edison Venture Fund, in Lawrenceville, N.J., zeros in on investments in the Mid-Atlantic region. Smith likes local companies because investors can spend more time with them. And Edison's area contacts keep it abreast of new investment opportunities. The Woodlands Venture Partners, in the Woodlands, Tex., and Primus Venture Partners, in Cleveland, invest locally. For names of other regional venture-capital networks, see "Matchmaking by Computer," Banking & Capital, October 1991, [Article link].
After three years of exploring financing options and eventually securing funds through government grants, venture-capital groups, and a public offering, Paul Frison, CEO of LifeCell, a Houston biotechnology company, concludes that local venture funding is generally the easiest to get. "They can come by and kick the tires," he says.
For an overview of the entire U.S. venture-capital community, study Pratt's Guide to Venture Capital Sources (SDC Publishing, available in libraries). You'll find some 800 firms listed by state; each entry includes contact names, affiliated funds, investment preferences, and endowment. The book also contains financing guidelines and tips on choosing and approaching fund managers. Pratt's and other venture-capital listings are available on diskette, so see "Venture Directories on Diskette," Banking & Capital, January 1992, [Article link], for three more sources.
Carded in Canada
We're frustrated because we can't cater to our Canadian customers, so we hope that setting up a merchant credit account will make it easier for them to buy our products. Can you set up such an account directly with a Canadian bank? Is that a wise move?
American Sports Marketing
Answer number one: Sure you can. The best way to locate branches convenient to your Canadian business associates is to call the Canadian Imperial Bank of Commerce at 416-784-7288.
Answer number two: Maybe. If you go that route, you'll have to open a new account with a Canadian bank, and finding one with the right mix of services will take some effort. Assuming you find a decent match, you'll still be dealing with bankers who aren't familiar with your company's track record and its changing fiscal needs. That's why Dale Kicker, CEO of Bending Branches, a Minneapolis hockey-stick maker, decided that setting up an account with a Canadian bank wasn't a wise move.
As a U.S. company owner seeking a merchant account with a Canadian bank, Kicker was told he'd first have to sign over power of attorney to a Canadian citizen (defined as someone who spends at least 51% of the time in Canada and pays taxes there). "We researched the idea, but it seemed more complex than it needed to be, so we bailed out," he recalls, adding that offering discounts to Canadian buyers has drawn plenty of new business.
If you're bent on applying for merchant status, you must first consult your own banker, advises business-resource publisher John Cali of Cody, Wyo. Granted, many banks don't provide the merchant-account service, and those that do grill start-up applicants. But if you don't ask your bank before approaching others, warns Cali, "you could tick off your banker and risk toppling the relationship." His booklet Strategies for Getting Charge Card Merchant Status at Your Bank (Great Western, 800-392-9445, $24.95) contains a gritty 15-point plan for companies battling for such an account. See "Taking Credit," Network, June 1992, [Article link], for ways in which other start-ups have succeeded at this issue.
If your banker can't help, says Cali, seek out smaller, even rural, banks. Often they're eager for new business and quick to support smart clients. Scan our July 1992 feature "The Best Small-Business Banks in America," [Article link], for what to look for in your next banking partnership. Then launch your search with Veribank's Blue Ribbon Bank Re port (800-442-2657, $35), which ranks the 40 fittest banks in your region. Order a single report (12 pages, $25 each) for a vivid financial snapshot of any domestic banks you like.
Some trade gurus say Americans often forget that Canadian buyers ordinarily pay more for U.S.-made goods, so catering to them may be tricky until trading rules are relaxed. Plus, if you view merchant credit status as an extension of your customer service, you may have your hands full in the States alone. "Not only is the Canadian population smaller," notes Kicker, "but Americans tend to be much more arrogant, demanding consumers."
I'm an independent consultant trying to decide if advising my clients through a 900 number is the best of the alternatives. I know the 900-number business has a lousy reputation, but is it getting any better? What do I need to think about before applying for a 900 number?
The Federal Communications Commission hopes stricter regulations this summer will spur a shakeout in the $600-million pay-per-call industry, thus reducing its "sleaze factor." But being approved for a 900 number will become even more challenging for start-ups, since major carriers AT&T, MCI, and Sprint are shying away from newcomers in favor of established companies.
On the plus side, you're offering a service, which is preferable to any product-fulfillment role (which calls for goods to be mailed) that 900 lines can play. And you're smart to consider other ways to deliver your advice, says Greg Speicher, CEO of Worthington Voice Services, a provider of 900 services in Worthington, Ohio. "You're doomed if you think of the number as a business in itself. It's like a newsletter -- just another way to express your message."
First, says Speicher, hit the Baby Bells and third-party service bureaus for free initial consultations. They'll tell you if another consultant in your field has already set up a similar 900 line. And they'll gauge the viability of your concept and financial projections. "The big bureaus have seen every 900 flop imaginable, so if they say no, listen to them," says Robert Mastin, author of 900 Know-How (Aegis, 401-849-4200, 1992, $19.95), a resource-filled paperback covering bureau basics and much more. Mastin says to begin with big bureaus like Lo-Ad (800-255-5623) and West Interactive (402-573-1000); some smaller bureaus, desperate for your business, will promise you the sky.
If your plan passes muster, compare the cost of going it alone with the cost of using a bureau to run your 900 operation. Soloists say the necessary start-up equipment is surprisingly cheap -- about $1,000 -- but you'll need another $3,000 for your initial ad campaign. Either way, expect to pay a carrier about 30¢ per minute (bureaus typically charge an extra 2¢ to 10¢ per minute) plus 10% of the retail price of the call.
Beware: the costs of marketing your 900 number can add up. When Jeff Miller, CEO of U.S. Consensus, in Ketchum, Idaho, found the cost of advertising his 900 line multiplying, he decided to reach his audience by publishing his own newsletter, which now contains ads for his caller-paid service. For other clever marketing ideas and a free list of ways to advertise on the cheap, contact telemedia consultant Peter Silver at 305-595-0063.
For more insight, Miller recommends that you subscribe to the industry monthly InfoText (Advanstar, 714-493-2434, $40) and attend the annual convention of the National Association for Information Services (202-833-2545). Also, The Power of 900 (Advanstar, 1991, $95), the best how-to on starting up and staying alive in the 900 world, includes a complete directory of caller-paid services.
I've just published my first book, and my initial marketing efforts have been marginally successful. What steps should I take to promote my book so I can eventually get it into bookstores nationwide?
Since some 50,000 new books are published yearly, promotion is brutal. "But if you network along the way," advises Dick Weigen, president of Corporate Book Resources, in Rutherford, N.J., "you'll understand the process and gain the recognition you need." One way to network is by joining the Publishers' Marketing Association (310-372-2732; $80 for an annual membership) or the International Association of Independent Publishers (415-922-9490; $60 for an annual membership). Their newsletters and marketing programs are aces, says Weigen.
If your book is highly targeted, direct mail can get you to your readers. Another tactic: publisher Tom Horn of Charter Oak Press, in Lancaster, Pa., suggests sending a one-page news release stating your book's purpose to the top trade journals and associations in your field. Horn keeps Dan Poynter's Self-Publishing Manual (Para Publishing, 800-727-2782, 1993, $19.95) on his desktop and thinks you should, too.
If your book is a general-interest title, lots of public media coverage will increase demand. Contact newspaper, magazine, and book-review editors to publicize your book, and join the American Booksellers Association (212-463-8450, $125 to join) to find contacts at specialized bookstores. "Then, send 200 copies of your book to bookstores with a sales letter," explains Weigen. Insiders say they'll buy if they like what they read.
Take advantage of free publicity on talk shows, says Tom Klein, CEO of NorthWord Press, in Minocqua, Wis. Tout your availability for interviews in Radio-TV Interview Report (Bradley, 800-989-1400, $325 per half-page ad), a biweekly read by some 4,700 radio- and talk-show producers nationwide. Or try Bradley's Publicity Blitz, a directory-on-diskette of 11,000-plus media contacts ($295 for a single copy of the database). Klein has one more must for your bookshelf: John Kremer's 1,001 Ways to Market Your Book (Open Horizons, 515-472-6130, 1992, $19.95).
For high volume sales, consider working through a distributor. You'll still need to self-promote, but if your book has strong market potential, major distributors like Publishers Group West (510-658-3453), National Book Network (212-727-0190), and Talman (212-431-7175) can get it into stores, assemble vendor relationships, and manage your accounts receivable. Expect to pay distributors about 25% of total book sales. n
-- Reported by Karen E. Carney, Vera Gibbons, and Phaedra Hise.