ENT 600 Week 7

Succession of the CEO

CEO Succession is a new process to me.  The transition of the CEO is  intense for any business.  Having a succession plan leads to a smooth transition for the company and in turn leads to more confidence of employees, investors and business partners.  In many cases the CEO vacancy is planned, but unfortunately, some vacancies are not planned.  In some cases the board must step in to replace a CEO.  This can be met with resistance or a founder CEO might realize it is best and have control of finding a replacement. 

A few key components of a successful succession plan are that it should be written and reviewed.  The plan should be implemented appropriately one year before the CEO is replaced.  The board would implement this after a through review of qualified candidates.  Once the final candidate is chosen they will be instrumental in the transition.  The new CEO will start by learning the company, They will meet the stockholders and build relationships before the outgoing CEO leaves.  

The board is usually the one that is responsible for overseeing the CEO succession.  The costs of not getting it right will affect the company for years to come. While not an easy transition, it is important to address the situation and have plans for a smooth transition.  The life of the company might depend on it.  


The founder’s dilemmas: Anticipating and avoiding the pitfalls that can sink a startup. Princeton, N.J: Princeton University Press.

ENT 650 Entrepreneurial Finance

What do you tell your employees if you can’t make payroll?

By Tina Jones

Running a business is not easy.  Running a business without the capital to make payroll is gut wrenching.  What do you tell your employees if you do not have the money to pay them?  After all, the employees are the backbone of the business. 

Payroll is one of the biggest expenses for many small businesses.  There are many reasons that you may not be able to make payroll.  Quite simply, it boils down to the cash flow in your business is not there.  For whatever reason, there is not enough money to cut the checks. 

As the adage goes, honesty is the best policy.  As humiliating as it can be, the employer must be honest and upfront.  Many times, it will not be a shock to the employee as they have seen tension or may even know that business is slow or payments are not coming in.  The honesty may help the employee prepare for the upcoming shortage or in an unfortunate circumstance, find another job.  If you have a good relationship with the employee, they may stay by your side until you make it through the rough patch. 

Now that you have it out in the open with your employees, you figure out how to solve the problem.  After all, as an entrepreneur, that’s what you do.  Find funds.  Easier said than done.  Take the time to explore your cash flow.  Find the leak or find potential accounts receivable.  Try to see if some of your accounts payable vendors can give you financing.  Look for financing through a traditional bank or even try to get a Small Business Administration loan.  The SBA is there to support small businesses.  They have loans available for COVID-19 and Disaster relief.  Personal funds are another option.  You might even have to use a personal credit card.

As an entrepreneur, you must know that not paying your employees is not acceptable as well as a violation of the Fair Labor Standards Act.  It is the responsibility of the business owner to be aware of their financial situation and not ever get into the position of treating the most important people, your employees, unfairly.



ENT 650

Entrepreneurial Finance

Crowdfunding with Indiegogo

By Tina Jones

Indiegogo is a crowdfunding platform established in 2008, where innovative entrepreneurs meet investors.  Indiegogo is one of the leading crowdfunding platforms for tech products, but also has opportunities to connect with other innovative ideas as well.  While there are many crowdfunding platforms, many choose Indiegogo because of their support and exclusive partnerships available to help boost your campaign.  They also have tools to help you before and after crowdfunding.

The entrepreneur will take their concept and present it to the backers on the platform through a campaign.  These backers will invest in your product.  A successful crowdfunding effort will also make it possible to receive larger-scale funding from a bank or venture capital firm.

Creating a Campaign

Create Campaign Page 
 Produce Pitch and Pitch Video
 Draft Pitch with images and Graphics
 Determine your campaign length and goal
 Outline your perks
Set Up Payment Process 
 Choose a payment type
 Set up your payment
 Verify bank account setup


Indiegogo charges a 5% platform fee.  The fees are collected from the funds you raise.  In addition to the platform fee, the payment processor charges a fee for processing the payment.  The fee in the United States is a 2.9% + $.30 transaction fee. 

How long will the process take until the money arrives and can be used?

A disbursement to your bank account will be made 15 business days after your campaign ends.  Indiegogo has two funding structures: fixed and flexible.  With either of these structures, your funding will be sent 15 days after your campaign ends.  If you raise more than $1,000 in currency, Indiegogo will automatically hold 5% of your funds to use for refunds or chargebacks. 

What is allowed on Indiegogo?

  • For-profit campaigns
  • Campaigns benefitting nonprofit organizations or nonprofit beneficiaries
  • Campaigns for products
  • Anything within “Community Projects” that is not a personal cause
  • Educational campaigns in the Tech and Innovation category

 Are there any restrictions?  

No funds can be released or accepted to any entity or person that is subject to blocking by the US Government.  For example, the Office of Foreign Asset Control restricts sending money or doing business with Iran. 

Reporting Requirements

A W-9 is a form that US based owners will fill out.  This will be used to provide information for the 1099-K form.  Funding is reported on a 1099- K form.  This form will report the gross amount of your funding.    The amount does not consider the credits, cash equivalents, discount or refund amounts.  If your campaign did not reach $20,000 and 200 contributions, Indiegogo will not provide tax documentation. 


How may we help you? (n.d.). Retrieved September 14, 2020, from https://support.indiegogo.com/hc/en-us

(PDF) Crowdfunding: An Innovative Approach to Start Up … (n.d.). Retrieved September 14, 2020, from https://www.researchgate.net/publication/311994951_Crowdfunding_An_Innovative_Approach_to_Start_Up_with_Entrepreneurship

(PDF) Crowdfunding: An Innovative Approach to Start Up … (n.d.). Retrieved September 14, 2020, from https://www.researchgate.net/publication/311994951_Crowdfunding_An_Innovative_Approach_to_Start_Up_with_Entrepreneurship

(PDF) Crowdfunding: An Innovative Approach to Start Up … (n.d.). Retrieved September 14, 2020, from https://www.researchgate.net/publication/311994951_Crowdfunding_An_Innovative_Approach_to_Start_Up_with_Entrepreneurship

ENT 650

Inheriting the Family Business

By Tina Jones

Whether you are planning to retire, sell, or close your business in the future, you should have a written exit plan.  Succession is a fact of life; it is better to prepare for it rather than ignore it.  Because for many, the business is their most valuable asset.  It only makes sense to have a plan. This is usually completed with the help of an attorney or financial advisor.   The exit plan outlines your business and a contingency plan to execute in the event of illness, divorce, and death.

It is important to plan for the transition as many businesses do not survive the transition from one generation to the next.  Family businesses are advised to follow a process in planning for succession.

  • Initiation Stage – Successors are introduced to the business and guided through a variety of work experiences.
  • Selection Stage – A successor is chosen, and a schedule is developed for the transition.
  • Education Stage – The business owner gradually hands over the reigns as the successor learns the required skills for running the business.
  • Transition Phase – The business changes hands.

Estate planning for the inheritance of a business is not for the faint of heart.  The financial and tax aspects transferring ownership can be a burden.  Heirs can be taxed at a high rate when the ownership is transferred.  Hiring an estate planner is highly recommended due to the complexity of estate and tax laws. 

Family Exit Plan is a plan you create if you are leaving your business to more than one heir.  If one family member wants to leave the company, the value of their share has been predetermined.  This will keep the heirs from having to sell the company to have to pay the heir that wants to sell. 

If you are the one that is inheriting the family company or business, here are several steps you would want to take.  Gather all the information that you can on the current state of the company.  You will want to know about the corporate paperwork, business licenses, and account information including accounts receivable and payable.  It would be ideal to have a current balance sheet, profit and loss statement, and cash flow statement.  Treat it as a due diligence period.  Know what you are getting into.  If you are lucky enough to have a succession plan and business plan from the previous owner, this will provide guidance in training, confidential information, and insight on your customers and competitors. 

The rewards of inheriting the family business far outweighs the challenges.  Being prepared to carry on the tradition of business ownership can be achieved through communication and planning.  It is never too early to begin the process.



ENT 650

Does Your Business Need an Angel?

By Tina Jones

If you are starting a business or have a grand idea, it is important to know about angel investments.   Unlike many of the conventional methods of getting start-up capital, angel investments have the potential for more than money. 

You may wonder who angel investors are?   Angel investors are people with money available to invest in your business.  Some have been successful entrepreneurs, and many are just people looking for a great return on a good investment.   Many Angel investors want to be on the frontline or ground floor of the next great idea.  An angel understands they may lose their investments in some companies and reap huge profits on others.  The angels focus on finding small businesses with high success rates or growth potential.  Angel investors are risk-takers. 

Angel investors are more flexible than banks allowing them to invest their money in whatever they choose at the dollar amount they desire.  Obtaining the capital from an angel investor is only one of the advantages.  The experience and knowledge that you have access to with your angel are more valuable than the capital.  As mentioned, many angels are former entrepreneurs bringing years of experience to the table.  The angel investor will want an equity share in your business. They have a stake in your success, and they will help you achieve it. 

Obtaining an angel starts with the pitch.  Making a successful pitch is the key to letting the investor know that you have a plan.  The pitch highlights the entrepreneur and the business opportunity expressing its value not only to the investors but also to the customers.  A clear picture of the forecast for growth and profit should be prepared into a presentation.  The presentation should be practiced and also reveal your passion for your idea or business. 

Research has shown that businesses funded by angel investors are more likely to survive and grow faster.  Using an angel investor does come with a cost.  The investor expects to see a return on their investment within a three-five year time period.  This is usually achieved by selling the business, offering shares through an initial public offering, or selling to a venture capital fund, which concludes with a grim fact that the entrepreneur will lose some or all control of the business.  The entrepreneur must make the decision whether or not to trade control for the necessary capital to get the business rolling. 




Retaining Your GREAT Employees

Week 6

Business owners know that every once in a while, you hire a great one.  Whether they were great straight out of the gate or they grew to be great while working for you, you don’t want to lose them.  According to How to Hire A-Players written by Eric Herrenkohl, there are some ways to keep those A-Players.

People want to work where they have a strong leader that lets them know when they are successful and important to the company.  It is important for the company to have some kind of recognition for these key employees.  Many times we get so caught up in running the company that we forget the people that are helping us become successful.   Employees need to know where they stand with the company.  Sketch out a quick organizational chart to let them know where they stand in the company and the role or roles that they hold.  Spend time with your A-Players teaching them how to fit into their role.  This time will be well spent as you are developing the players that will make your job easier and your company prosper. 

Know who the A-Players are with your company, but more importantly let them know that they are important.  Take the time to let them know what they mean to the business.   Let these key players know that they have a future and can grow with your company.  While you can’t make an employee stay, you can make them WANT to stay. 

Herrenkohl, E. (2010). How to hire A-players: Finding the top people for your team–even if you don’t have a recruiting department. Hoboken, NJ: Wiley.

Role Dilemmas ENT 600

Reflection from The Founder’s Dilemmas by Noah Wasserman

Week 5

Being the founder of a company is not easy.  Being a co-founder of a company is harder.  One would think that working with a partner would make things easier.  In addition to the division of the work, you also must decide who gets which title.  Quite simply put, who is the CEO?

Sometimes deciding who does what comes naturally.  You will have two founders that have totally different skill sets.  You may have a founder that is a natural born leader with the charisma, confidence and passion for your company.  They may be accepted as the CEO.  When you have multiple founders that do not name a CEO, they may adapt to an egalitarian approach.  They will work together as a team and make decisions together.  Some founders end up working together as joint chief executives.  This tends to work if they use complimentary skills to get the job done.  Some of the disadvantages to the egalitarian approach are lack of accountability and time-consuming decision making.  Using the hierarchical approach can speed up the decision-making process and offer clear accountability. 

To avoid the conflicts associated when assigning the title, the choice could and should be made in the initial planning for the company.  Do this well before the ball is rolling.  Choosing the right leader for the company is the key to establishing confidence in your brand and company.

Wasserman, Noam. The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup. Princeton, N.J.: Princeton University Press, 2012.

ENT 600 Hiring an A-Team

ENT 600 Week 4

If you are trying to build a successful business, hire people that can help you build it.  Hiring A-Players not only helps you build your company, it also allows you to have a life. If you hire people that can run the company without you, the value of your company even goes up.  Everyone should look for A-Players, not just the human resources department.  To build a great team, you don’t just hire any employee.   Recruiting great team players is your competitive advantage.

As you begin to hire your A-Team, you must find employees that mesh with the culture of your business.  If you do hire an employee that does not fit, it is important to the business to resolve issues with the employee quickly.  Having an employee that disrupts your team can destroy a good work environment, company reputation, and the success of your company.  Many times a small company will try to only hire people that they know; also known as hiring from your inner circle.  As an entrepreneur, you should look outside your inner circle to hire the most qualified, skilled employees that you can find.  Building a great team can make or break your business.  Find an A-Team, your business is counting on it.

Herrenkohl, E. (2010). How to hire A-players: Finding the top people for your team–even if you don’t have a recruiting department. Hoboken, NJ: Wiley.

Wasserman, N. (2013). The founder’s dilemmas: Anticipating and avoiding the pitfalls that can sink a startup. Princeton, NJ: Princeton University Press.

ENT 650 Week 3 Importance of Financial Statements

The importance of financial statements to entrepreneurs.

As I embark on reading Entrepreneurial Finance by Steven Rogers,  I realize the importance of financial statements to an entrepreneur.  Financial statements are a picture of the company in its present state of financial health that can be used to project the future of the business.  

Each statement will give a different snapshot.  The Income statement is sometimes referred to as the profit and loss statement.  It shows the reader if the company has the ability to earn a profit.  It is an organized summary of the company income (sales) and expenses.  The income statement can also be used to analyze sales trends over time.  The income statement is also used to calculate a company’s cash flow(Rogers, 2020).  After all, we all want to know if we are making money. 

Balance sheets show a great representation of a company’s assets, liabilities, and stockholders equity at a specific time.  These sheets are used by lenders to determine a company’s creditworthiness.  The assets and liabilities can be separated into long-term and short-term categories.  Short-term assets can be converted into cash within one year.  Long-term assets can be depreciated over time.  Liabilities are the debt that a company owes.  Short-term debt will be repaid in one year.  Stockholders equity is the difference between what the company owns (Assets) and what the company owes (liabilities).  

While it is not necessary as an entrepreneur to be able to create these, it is necessary to understand them.  After all, behind every successful business is a great accountant.


Rogers, S. (2020). Entrepreneurial finance: Finance and business strategies for the serious entrepreneur. Place of publication not identified: Mcgraw-Hill Education.



ENT 600 Week 3 Building Social and Financial Capital

As a founder of a company, I can certainly appreciate the importance of social and human capital.  While my company was a small endeavor, the social capital that I had built was invaluable as we needed a loan.  Imagine a young couple with a drive for doing business but very little money.  Luckily, the young couple had a prior relationship with the lending institution and a good reputation.  This allowed them to receive a loan on a business plan and an idea for a business.  The connections do not stop there.  It is necessary to have human capital as well.  Whether you need a builder quickly, an attorney on the fly, or an accountant to keep your numbers straight, you need connections!  As the book, The Founder’s Dilemmas, emphasizes age could be in your favor.  Having been around a while, I have established relationships with many professionals in my industry that can answer questions, offer suggestions, or even lend me money.  Luckily, I am an extrovert and do not meet a stranger.  I will keep making friends and acquaintances because who knows what the future holds. 

Wasserman, Noam. The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup. Princeton, N.J.: Princeton University Press, 2012.