Some entrepreneurs who got their start during or shortly after college shared lessons learned this morning at a panel for New York Entrepreneur Week at NYU’s Stern School. My biggest takeaway from the talk: young entrepreneurs need to surround themselves with the right people to succeed. That means co-founders or top employees who complement your strengths and weaknesses, experienced advisors who know the industry and have started companies before, and investors who bring expertise and can guide your company in the right direction.
Despite the mythology of the dorm-room startup founded with your best friend, that may not be the smartest way to build a successful venture as a young, first-time entrepreneur. Your friends are often not the best business partners, in part because they may be too similar to you, says Sergio Fernandez de Cordova, co-founder of Fuel Outdoor Advertising, one of the panelists. “Be careful when you’re doing this with friends,” he says. “70% to 80% of the time, they end up being failed opportunities, and then friendships tend to fall apart.”
But college-age founders should look for people who are as passionate about the venture as they are. One reason, says panelist Allan Young, an entrepreneur who helped launch the student-managed University Venture Fund as an undergraduate at Brigham Young University. “Find people who have a similar risk profile, who have nearly as much passion as you do,” Young told the audience, which was roughly split between MBA students and entrepreneurs. That’s partly because people who are passionate about your idea will likely get on board for little if any money, which is something Young also said students should be prepared for. Young says venture capital is overrated, since most businesses in the U.S. don’t get venture funding. And, Young says, most of them don’t need it. “If cost is the issue” preventing you from starting up, he says, “then I think really it’s just fear.”
However, if you do seek outside funding, whether from VCs or angels, Cordova says to make sure that your investors will actually help the venture. “There’s smart money and there’s dumb money. Anybody can find the dumb money,” he says. “It’s very important to find smart money that will add value to your business.”