MCED Blog

MCED helps innovators fill in the gaps between their deep industry expertise and the strategic business skills critical to launching a scalable, sustainable venture. Maine's unique economic and geographic challenges demand more that a traditional business incubator. They demand a catalyst.

5 Minutes with Rachel Green
Rachel Green is an attorney at Preti Flaherty who practices with the firm's Business Law Group in its Portland office. She is passionate about helping locally owned businesses of all sizes succeed. Through Preti’s Launch Pad program, Rachel helps startups and early stage companies with some of the key legal acts of business formation and provides Launch Pad participants with expertise across a diverse spectrum of legal matters, including general corporate law, mergers and acquisitions, real estate and other transactions. 
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5 Minutes with Kenneth Greenleaf

Before joining MaineStream Finance, Ken was a sales and marketing manager where he worked with businesses ranging from the small operations to large chains. He has also managed an Internet development firm creating enterprise web sites for a wide variety of clients. He started and ran a small, high-end renovation company in New York City. Besides his background in sales and business, his work experience includes building musical instruments and commercial fishing.  Greenleaf is also an artist and writer, and has written regular columns in the past for MaineBiz magazine, the Portland Newspapers and the Portland Phoenix. One of his clients called him the Swiss Army knife of small business

1. What is the MaineStream Finance's mission? Where does their funding come from?

MaineStream Finance is a CDFI, a Community Development Financial Institution, or non-profit bank. It was formed to support local economic growth by providing financial and consultation services to those who might otherwise not have access to them. MaineStream is a wholly-owned subsidiary of Penquis CAP, a large community action program based in Bangor. My office is in Rockland.  MaineStream is largely funded through grants from federal agencies and private foundations. We have loan pools that are supported by banks, and have a relatively small but growing loan portfolio.

2. I understand MaineStream Finance is a source for small business loans. What kinds of businesses apply for and successfully receive those loans? What kind of assistance do you offer these businesses in applying for those loans?

We generally do microenterprise loans, starting from around $10,000 and up to $50,000 or so. We are an SBA and FAME lender, and often work in partnerships with commercial banks to help create a much larger package the will meet, for example, SBA requirements.

Much of my own work is developing business plans with entrepreneurs, helping them get ready for bank or other financing. I get referrals, for instance, from banks who have been approached by someone with a business idea, to help assemble a plan. This work, by the way, is always free to the client.

Our loan acceptability window is somewhat larger than a commercial bank. We can sometimes find ways to make a loan that regular banks cannot, perhaps because of credit or background issues. We help articulate the plan narrative and the profit and loss and cash flow projections that are necessary not only for a loan, but for good business management.

3. What kinds of educational programs does MaineStream Finance provide for entrepreneurs? How would an entrepreneur get involved with those programs?

Is there a fee involved?

We offer a number of programs for the entrepreneur. An example in the Midcoast is the Hatchery series, a seven-class seminar which address the issues an entrepreneur faces while starting a business. We also offer the Incubator Without Walls program that specifically addresses how to create a business plan, and the Business 101, a single class for beginners to get a taste of what it is like to start a business.

Our classes, schedules and other services, including home ownership, family development accounts and foreclosure abatement, are listed on the website, www.mainestreamfinance.org. These classes are free. At least one Hatchery member has gone on to Top Gun. They are complimentary programs.

4. Is there a specific geographic area Maine Stream Finance covers in Maine or are you a state wide organization? 

Historically MaineStream has concentrated its business development activities in Piscataquis, Penobscot, Knox, and Waldo counties, with more occasional work in Lincoln and Hancock. That said, we have state-wide lending authority, and of late have been considering development projects in Cumberland county and down east, as well. Our goal is also to work more with the new farming businesses, which may take us to Somerset and Aroostook.

5. What do you wish more people understood about doing business in the Midcoast?

That it’s a great place to live, and draws people from all over the world who come here just because of that. The population is small, which is a makes it a great place to be, but it can be difficult if you expect to make your living marketing to the local area. But if your market is the planet, as it can be for many business now, the Midcoast has everything you need. Growing bandwidth, relatively low real estate prices, plenty of financial and business assistance resources and a lot of smart, interesting people. And you get to enjoy every commute, looking at stuff that people spend a lot of money to come here and see. The quality of life is very high.

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Mentor Highlight - Sam Bishop

Sam Bishop

We are so pleased to feature Top Gun and Maine Mentor Network Mentor,  Sam Bishop. Sam has over 35 years assisting small and medium sized companies grow and prosper. Associated with Pace Consulting Group since 1978, he  assumed the position of Managing Principal in 1999. A professional in management consulting for over 25 years, Sam has served as interim CEO or COO of eight companies in the turnaround, start up, or growth mode. In addition, he has extensive consulting experience ranging from diagnostic evaluations to strategic planning, to financial restructuring. 

His extensive, hands-on experience with a diverse range of small and medium sized companies enable him to quickly evaluate situations and develop practical solutions. 

Earlier in his career Sam spent 17 years with a major Fortune 200 Corporation, advancing through production, product development, marketing and business planning to general management of an $80 million multinational division. He received his education at Harvard and currently lives on a yacht.
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MCED Featured Mentor - Terry Johnson

Terry Johnson

Always ready to help when and where he can, Terry Johnson has quickly become a part of the MCED community. Johnson came to us with a broad background in project management and work-flow improvement activities. He specializes in project management, and is ready to mentor MCED clients in collaboration and process improvement across the organization to help them ensure new and enhanced business opportunities and value-added improvements for new levels of profitability.

Johnson is a Product and Technology Development professional with experience in all aspects of the development process who uses knowledge of processes and systems to drive improved product selection, execution, and introduction - leading to increased business opportunities and customer satisfaction.

 

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Advisory Board vs. Board of Directors

Here's a great blog by Steve Blank about the critical difference between a board of directors and a board of advisors:

Don't Give Away Your Board Seats

We work with companies to think through the progression, which is generally:

1) work with coaches

2) work with mentors

3) form a board of advisors

4) form an outside board of directors 

Step 4 is only necessary with "significant" outside financing.

Probably a big difference between Silicon Valley (where Steve Blank is) and Maine is that here, a "significant" financing is probably between $300K and $500K, whereas it's probably 3X that amount in the Valley.

In other words, a decent size angel round or modest size VC round in Maine will lead to a requirement to develop an outside board of directors.

 

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Great article on Mentoring
Insights on Mentoring
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Is Top Gun Maine an Accelerator?

Since I arrived at MCED in October 2010, I’ve been calling Top Gun Maine an entrepreneurship accelerator, modeled after TechStars and other similar accelerators but adapted to Maine. And while I’m sticking to my story, last week I was reminded, twice, that we’re qualitatively different from the internationally known accelerators. 

My first reminder was doing research for an article I was writing. In spring 2010, prior to joining MCED, I attended the weeklong Babson Symposium on Entrepreneurship Education (SEE) with another 60 (would-be) entrepreneurship educators. Babson has now started an e-newsletter for SEE graduates; I had volunteered to write an article, and last week was my deadline. I wrote about the evolution of Top Gun since I’ve been here – pretty dramatic – but I checked out Wikipedia (of course!) for background on “seed accelerators” and found this: 

“Seed accelerators are a modern, for-profit type of startup incubator, with an open application process, taking in classes of startups consisting of small teams, supporting them with funding, mentoring, training and events for a definite period (usually three months), in exchange for equity. While traditional business incubators are often government-funded, generally take no equity, and focus on biotech, medical technology, clean tech or product-centric companies, accelerators are privately-funded and focused on mobile/Internet startups.”

The lack of funding for Top Gun Maine companies is one big difference versus Techstars and Y Combinator. At this juncture, in Maine, I think that funding in return for equity would not be appropriate for all Top Gun companies. Why? It propels companies down the high-risk equity investment path, which is not the right path for many promising companies. Of the 40 or so Top Gun graduates to date, probably less than 25% would find that high-risk equity is a good fit for their long term plans.

Take one of our prominent successes: Liquid Wireless. At MCED’s mentor-only networking event last week, veteran mentor (and venture capitalist) Kip Moore told the story of how, at his first meeting with Liquid Wireless founder Jason Cianchette at the beginning of Top Gun Maine 2009, Jason said that funding was his top priority. Kip gently suggested that maybe talking to customers ought to come first, to make sure there was demand. A few weeks later when they met again, Jason said something like “I don’t need funding – I talked to some customers, they want to buy the product now!” That was a better path for Jason – he owned the whole company when he sold it in January of 2012 - even though his “lead generation from cell phone users” business could probably have raised angel investment.

My other reminder was during a visit the following day to the New England Angel Capital Association quarterly syndication meeting. I was there to act as the lead investor supporting Newfield Design, which was one of four companies chosen to pitch to the meeting of about 60 angels from more than a dozen different angel investor groups.  Newfield is a “spotlight company” for the Blackstone Accelerates Growth initiative, and a team of us had worked with Jim Colony on his pitch the day before. It was the winner of the 2011 Juice Pitch Competition, which is how I became an investor.

Before the pitches there was a panel discussion on the topic of how angels should interact with accelerators, and the accelerators represented included TechStars Boston and MassChallenge. One of the panelists described the type of entrepreneurs they accept as follows:  there must be a coalesced team, they must have executed “something” already (such as a prototype) but they do not yet have substantial market proof of demand for the concept.

The Top Gun class is far more diverse. Sometimes we take solo entrepreneurs looking for key team members (although that’s a very big risk for startups). To date we haven’t required execution of “something” (although the hurdle for getting into Top Gun gets higher every year). And we do include some companies that have already achieved some level of market traction – some Top Gun companies have annual revenue up to $1 million.

So we’re not a seed accelerator – Top Gun Maine is an entrepreneurship accelerator. A lot of other elements are similar to seed accelerators, but adapted to Maine. Isn’t this the way it should be?

The Top Gun Maine class of 2013 will be announced December 14.

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5 Minutes with Attorney Karin Gregory

Partner: Furman, Gregory Deptula, LLC

Practice Areas: Corporate: Entity Formation, Intellectual Property, Corporate Management, Commercial Transactions Finance, Private Equity: Private Financings and Private Investment Funds, Alternative Investment Representation, Merger & Acquisitions and Other Liquidation Events

Ms. Gregory's career spans over 25 years in the healthcare field, as a basic scientist, healthcare administrator, lawyer and venture capitalist.

1. When should an entrepreneur file for a patent and/or trademark?

I recommend that an inventor file for a provisional patent before any public disclosure is made. For a trademark, either to secure the mark before it has been used in commerce, or soon after you can demonstrate that it is being used in commerce.

2. Do I need an attorney to file my trademark and/ or patent application?

In either case, the USPTO can assist in the initial filing, but the inventor should do some preliminary searching to see about prior art in the cases of patents and trademark applications or registrations already on file . Subsequent to the first filing of a patent, the invention should seek a patent attorney to ensure that the claims are well prepared. In the case of a trademark, once an office action is received, it is very useful to get some guidance and advice on how to reply. In either case, using an experienced IP lawyer will make the process go more smoothly.

3. How can an entrepreneur compete with, or "design around," a patent?

That's a very hard and complex question that requires a review of existing art, and even if there is an opportunity to avoid infringement, it is likely depending upon the industry, to be concerned about another company bringing suit for infringement. You need to have an enforcement and a mitigation strategy in place if the technology might have such risks. Trademarks, on the other hand, afford a company an opportunity to use the same mark in a different industry or for a different purpose so as to argue the ability to use a very similar mark that will not confuse the public if both are used in commerce.

4. If my patent is pending, is the information in it available for public consumption?

In the US, a provisional is only good at the present time for 12 months, and then a full application must be filed for the work to remain able to claim the priority date of the provisional filing. The application currently becomes public after 18 months, with some exceptions. Outside of the US, the patent applications are public almost immediately.

5. Am I violating a patent when the patent is written so vaguely that the patent covers a wide range of products?

If the patent is written vague, those claims will not likely be issued. Generally you should have an opinion about a possible infringement, so that there are no facts to support a later claim of willful infringement.

6. Should you trademark your brand name?

Trademarks are good for products, and positioning a company's name/logo, in order to have the public identify it the product with the company's name..such as the red bullseye for Target. A tag line or service type company would also do the same-Nike-"Just do it". Technically, that is a servicemark.

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