GVSU Center for Entrepreneurship & Innovation Seidman College of Business

Cultivating the Entrepreneurial Soul

Vol. 4 Spring 2012

SPRING 20122|

As its name implies, NEU (German

for “new”) is all about what’s

new–and what’s happening–in

West Michigan’s entrepreneurial

community. It’s designed to support

the efforts of people within our

community by recognizing the ideas,

strategies, and accomplishments

of local entrepreneurs and

partner organizations, and also

by providing information on

educational opportunities and

community resources and events.

NEU is published by Grand Valley

State University’s Center for

Entrepreneurship & Innovation

(CEI) within the Seidman

College of Business.

The latest CEI and West Michigan updates can be viewed online at www.neugrandrapids.com

The word “culture” can be traced back to the Roman philosopher Marcus Tullius Cicero who used the term cultura animi–the cultivation of the soul–as an agricultural metaphor for spiritual development and enrichment. Although “culture” now has many meanings, Cicero’s original use still resonates with us at the Center for Entrepreneurship & Innovation.

We see an entrepreneurial spirit and culture in West Michigan that’s growing and thriving. It’s a positive culture where new ideas are the seeds of innovation, and where entrepreneurs are turning those ideas into viable business opportunities. It’s a healthy culture that grows entrepreneurial thinking and adapts to change. It’s an enlightened culture that understands the importance of diversity in business and all walks of life.

It’s our mission at CEI to be part of this culture–to embrace, support, and promote it. Taking a cue from Cicero, we see ourselves cultivating the soul of entrepreneurship in West Michigan. The content in this issue of NEU is an example of how we’re doing this. We hope you enjoy it.

Sincerely,

J. Kevin McCurren

Executive DirectorCenter for Entrepreneurship & Innovation

FEATURED ON THE COVER

CAN YOU FIND THE CEI STAFF? Find out who’s who on page 27.

3SPRING 2012 |

22 | Ryan Vaughn

College is the perfect time to start a business.

18 | MoDiv

The goal is to open the store, react to the demand, and adjust.

23 | Miles Smith

GVSU has an exceptionally strong pool of business mentors and resources.

24 | Jason Mascari

I didn’t really take a traditional educational route in regards to starting a business.

25 | Sam Hogg

Industry is worth well over 100 billion dollars, but even in such a big sector, it’s a pretty small world.

6 | Developing the Soul of Entrepreneurship

Sparking a revolution through an entrepreneurial culture.

16 | Tree Huggers

We are a community, where people can come in and get information or provide information.

14 | The Key to Successful Investing

The Invest Locally, Invest Profitably education conference offers an opportunity for investors to learn about a range of private capital investments.

20 | Start your Corporate Engines Pillar Organizations Spinouts Stages of Entrepreneurship

22 | The ESPN for High School Sports Ryan Vaughn | Early-Stage

23 | Baiting the Hook Miles Smith | Early-Stage

24 | Navigating the Gridlock Jason Mascari | Early-Stage

25 | Impact Engineer Thania Panopoulos | Venture Stage 25 | Finding Space in the Big Leagues Sam Hogg | Exit Stage Featured Entrepreneurs

26 | Breaking Barriers Amy Engelsman | Proos Manufacturing

26 | Million Dollar Dreams Noël Cuellar | Primera Plastics

28 | NEU Events

CEI Update 2 | CEI Letter 4 | CEI Accountability Report

Featured Articles 6 | Developing the Soul of Entrepreneurship Regional Culture as a Competitive Advantage

10 | The New Wave of Entrepreneurs Diversifying the Entrepreneurial Club

13 | Question & Answer West Michigan’s Risk Aversion

14 | Invest Locally, Invest Profitably The Key to Successful Investing in WM

Advisory Resources

16 | More than a Store, It’s a Community Tree Huggers

18 | No Division on Division MoDiv

Accountability ReportCommercialization Support

Entrepreneurial Culture

CEI provides continued support for events that advance the entrepreneurial resource base in Michigan. Notable events from last fall and winter included the Annual Grand Angels Meeting (Oct 6), AimWest Fishbowl Seminar (Nov 16), Invest Locally, Invest Profitably Conference (Dec 15), West Michigan Startup Weekend (Jan 13-15), Annual Collaboration for Entrepreneurship Conference (Jan 31) and Momentum’s Startup Communities event with Brad Feld (Mar 1).

Raising Capital from the State of Michigan

CEI welcomed Eli Thomssen of Armune Bioscience, Rich Cook of the West Michigan Science and Technology Initiative, and Dale Grogan with the Michigan Accelerator Fund-1 to a how-to seminar about developing a business plan and winning the state funded competition. In 2010, Eli was the $500,000 winner at the Accelerate Michigan Innovation Competition.

Technology Transfer

CEI Executive Director, J. Kevin McCurren, coordinates with the GVSU Innovation Committee to assess students’ and faculty technologies that may have commercialization potential. Ideas are reviewed by the committee with the help of the School of Engineering and the West Michigan Science and Technology Initiative. Six applications were reviewed in 2011.

Community Programs

West Michigan Venture Vetting meetings have brought investors together to form a community that can support up-and-coming entrepreneurs; increase deal flow; share stories of success and failure; identify resources that will benefit the entrepreneurial ecosystem; and establish networks with new investors. CEI has also connected entrepreneurs with local resources after identifying each business’ needs during one-on-one meetings.

Talent Development

Entrepreneurship Curriculum

Grand Valley State University’s Seidman College of Business offered three entrepreneurship classes during the Fall 2011 semester. Freshmen and sophomores studied the world of free enterprise in Introduction to Entrepreneurship. Juniors and seniors furthered their entrepreneurial knowledge in Designing New Ventures and Enterprise Management. The Seidman College of Business will be adding courses to the entrepreneurship curriculum in the upcoming academic year.

Idea Pitch Competition

The GVSU Collegiate Entrepreneurs’ Organization (C.E.O.), in partnership with CEI, hosted the 5th Annual Idea Pitch Competition in October. The competition featured students’ innovative ideas on subjects ranging from GPS technologies to charitable fashion lines. The panel of local judges chose Miles Smith’s BAHRS “breakaway coupling” concept as the most viable idea; Sam Rasmussen’s “designer vents” concept earned a close second place. C.E.O. provided $750 in award money.

West Michigan Collegiate Fund

With proceeds from December’s Invest Locally, Invest Profitably Conference, Grand Valley has made the first contribution to the newly proposed West Michigan Collegiate Fund. The student-run investing fund will provide startup capital to student ventures. Schools that invest in the fund will have the opportunity to appoint student fund managers who will be mentored by experienced professionals.

Startup Internships

Three GVSU students were matched with startup companies for hands-on internships last year. CEI connects qualified students with up-and-coming community organizations to provide mutually beneficial learning opportunities.

One of those students, Elizabeth Arnold, was a fall 2011 intern at The Factory, a business incubator and co-work space in

Grand Rapids. “I’ve learned so much in just the few weeks that I’ve worked at The Factory,” she says. “Not only am I getting plugged into the technology and design community, I’m also learning more about how to run a business, the best ways to network, and how to go about finding new clientele while keeping up with current clients.”

Community Catalyst

What began as a Grand Angels initiative spearheaded by organization President, Jody Vanderwel, has blossomed into an educational movement that nurtures entrepreneurial ideas. The West Michigan Colleges and Universities Group (WMCUG) was organized to encourage collaboration between the business schools of seven founding institutions: Aquinas College, Calvin College, Cornerstone University, Davenport University, Grand Rapids Community College, Grand Valley State University, and Hope College.

Although the member schools did not originally intend to host “idea-pitch” competitions, these public events have become a keystone of WMCUG’s programming. Hundreds of students participate in the preliminary tournament rounds of a competition that has taken West Michigan by storm.

In November 2011, WMCUG hosted the 3rd Annual Regional Idea Pitch Competition at Davenport University. Two students from each of the partner schools participated. Amanda Chocko of Momentum, Fred Keller of Cascade Engineering, and Joe Ponstein of Ernst & Young LLP, served as judges of the 14 student ventures. Calvin College student Kim VandenAkker took the top prize. Miles Smith and Sam Rasmussen from Grand Valley placed second and fourth, respectively.

On April 10, 2012, WMCUG also hosted the 3rd Annual Regional Business Plan Competition at Calvin College. The competition’s 2011 winner, Kelly LeCoy, opened her kitchen incubator this March in the Eastown district of Grand Rapids.

SPRING 20124|

2012 winner, Miles Smith, has already received a MEDC loan for his patent pending fishing lure component. In the last three years, WMCUG and its generous sponsors have provided over $20,000 in funding for student businesses.

Community organizations provide different venues where students and community members can showcase their new ideas. Pomegranate Studio’s 5x5 Night has created entrepreneurial buzz and serious cash for local thinkers; E-Merge West Michigan played a role in Baker College’s inaugural elevator pitch competition in November; and Momentum’s Pitch Night draws serial innovators to business incubator The Factory.

WMCUG will continue its efforts to foster entrepreneurship in schools and encourage students to commercialize their ideas.

Regional Business Plan Competition

20121st Miles Smith, Grand Valley | $3,0002nd Scott Brandonsio, Hope College | $1,5003rd Jonathan Borak & Josiah Gamroth, Calvin College | $1,000People’s Choice Miles Smith Grand Valley | $250

20111st Kelly LeCoy, Calvin College | $3,0002nd Luke Richard, Grand Valley | $1,5003rd Tom Olson & Chris Skurka, Aquinas College | $1,000

Regional Idea Pitch Competition

20111st Kim VandenAkker, Calvin College | $1,5002nd Miles Smith, Grand Valley | $1,0003rd Chad Oullette, Davenport University | $5004th Sam Rasmussen, Grand Valley | $500

20101st Jeramiah Cornell, Grand Valley, $1,5002nd Frank Leonard, Grand Valley | $1,0003rd Melanie Creager, Cornerstone University | $5004th Nicholas Rocha, Aquinas College | $500

Kelly LeCoy and her father celebrate the success of Uptown

Kitchen at the 2011 Regional Business Plan Competition

WMCUG has attracted hundreds of ambitious student entrepreneurs to participate in the annual

regional idea pitch competitions.5SPRING 2012 |

REGIONAL CULTURE AS A COMPETITIVE ADVANTAGE

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DEVELOPING THE SOUL

OF ENTREPRENEURSHIP

Globally, geographical regions have begun to distinguish themselves based on their ecosystems. According to the Startup Genome Project, whose vision is to work with city leaders around the world to create the most up-to-date startup ecosystem database, Silicon Valley, Singapore, Tel Aviv, Sao Paulo and Mumbai lead the world as startup hubs and as entrepreneurial breeding grounds. Bridging from this project, it is evident that no one system fits all. Therefore, it is important to adjust to factors such as infrastructure, government and social challenges. Together, such factors stem and help feed into a regional culture. With time, this unique blend creates a regional entrepreneurial soul that, if harnessed, can lead to a viable competitive edge on a global scale.

Borrowing from chemistry, no entrepreneurial revolution, metaphorically, can be ignited by individual ingredients: it must be catalyzed. For a spark to ignite, regions where the following characteristics are evident tend to have an increased level of entrepreneurial activity, which results in a strong, dynamic and sustained entrepreneurial ecosystem:

• Government supports but does not create new ventures

• Society encourages risk and accepts failures • Capital flows easily, but with care

• Communities require diverse entrepreneurs & ideas

Professor Daniel Isenberg, renowned scholar on global entrepreneurship, writes “stop emulating Silicon Valley... [While] Silicon Valley has it all: technology, money, talent, a critical mass of ventures, and a culture that encourages collaborative innovation and tolerates failure,” it is not wise to truly imitate a business region. A community must use what is feasibly available, what they are good at and what can sustain long-term growth to ignite

the sparks of a healthy entrepreneurial system. Simply, a community must find its unique competitive advantage and harness its own entrepreneurial lifestyle. If a community focuses on amplifying its cultural strengths, as opposed to duplicating entrepreneurial hubs, it will begin to flourish and sustain economic growth.

Taking a closer look at entrepreneurial activity in the United States (Figure 8.1), one can clearly see the geographical patterns associated with entrepreneurship, with activity being highest in the Western and Southern states, while the Midwest and Northeast regions showing slower patterns. While this association is due to a plethora of factors, it is interesting to note that these regions tend to revolve around entrepreneurial powerhouses, which continuously invigorate regions through entrepreneurship. From the geographical associations, one can infer the importance of regional culture in how entrepreneurship spreads and develops.

Reducing Bureaucratic Obstacles

According to the World Bank’s Economy Rankings, the United States trails New Zealand and Rwanda (ranked 1st and 8th, respectively), in the feasibility of starting a new business, with a ranking of 13th in the world. This index incorporates the challenges of attaining credit, investor protection, paying taxes, contract enforcement and resolving insolvency, amongst other factors. While it is not a holistic representation, it does offer valuable insights to which governments excel in supporting entrepreneurial development.

Governments that are truly invested in the continual growth of their regional economies must demonstrate a willingness to help and promote initiatives that help start, improve and innovate companies. Increased regulation and government red tape will only hinder ideas and complicates the process of entrepreneurship.

Earth has become an interconnected environment bridged by nature and by a human desire to connect. Being unique in a seemingly saturated system becomes a difficult quest, as nuances in every industry, ideology and even ecology make individual uniqueness a rare trait. With this in mind, how does an entrepreneurial ecosystem harness a competitive advantage in an increasingly flat world?

7SPRING 2012 |

DEVELOPING THE SOUL

OF ENTREPRENEURSHIP

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Investor Engagement

Engaging investors to discover the next promising startup is a pivotal component to nurture a healthy entrepreneurial culture. Additionally, investing time, knowledge and non-capital resources in the development of the businesses is an integral component to maximize revenue potential of the ventures investors decide to fund.

Given the state of the economy, it is ever more important to take an active role in one’s investments. Savvy investors understand that capital is only one component of a successful venture. Leveraging networks and working knowledge are vital to the short and long term success of a business. Failure as a Learning Curve

Raised in rural central Pennsylvania, with no formal education, Milton S. Hershey was nearly bankrupt by the time he

was 30. That did little to damper his success, as he went on to become one of America’s wealthiest entrepreneurs, whose products are known the world over, Hershey’s Chocolate. It is understood that fear of failure destroys success, and communities that do not embrace the possibility of failure, risk missing significant opportunities for growth.

According to Johnathan Orthmans, President of the Public Forum Institute in Washington D.C., “venture capitalists often see failure as an asset and not a liability in an entrepreneur’s record.” He goes on to say that failure suggests a tolerance for risk, “a perseverance to succeed, [and] a passion to push the envelope.”

Volatility in the economy has caused drastic changes in venture capital investments. According to

Figure 8.1 Index of

Entrepreneurial Activity by State

The Kauffman Index of Entrepreneurial Activity measures the rate of business creation at the individual owner level. Presenting the percentage of the adult, non-business-owner population that starts a business each month. The index captures all new business owners, including those who own incorporated or unincorporated businesses and those who are employers or non-employers.

Michigan ranks low

with only 220 per 100,000

adults creating businesses

each month, 42nd in the

nation.

PricewaterhouseCoopers, venture capital investors have progressively limited the number of deals they undertake. As Figure 9.1 shows, in 2007, 4,124 deals were made, totaling $30.8 billion. In 2011, investment deals dropped by 11 percent, while the total investment amount by only 8 percent. Investors are allocating larger amounts on fewer deals, in effect, focusing on fewer investments to lower risk of failure. Noting these changes, it is plausible that investors are rethinking their strategy based on historical records of failed investments, which adds to the idea that failure is central to develop as a knowledgeable investor and entrepreneur.

Diversifying Entrepreneurship

Communities must adjust for current changes in demographics across the nation and global markets. Representation of minorities and women

Entrepreneurship Rates

.33% to .52% .24% to .33% .015% to .24%

9SPRING 2012 |

in business is necessary to meet the needs of consumers. Business owners and teams must adjust to these demographic changes, as failure to do so could lead companies in unsuccessful revenue growth. As CEI Director, Kevin McCurren, mentions in Diversifying the Entrepreneurial Club, by “expanding the reach of entrepreneur programs…the potential of undiscovered ideas,” is greatly enhanced.

Noting the lack of diversity in many of the events entrepreneurs frequent, it is important to actively engage the community to participate in learning and networking events. Beyond that, mentorship and incubators directed towards a diverse membership will provide more access points for individuals underrepresented in

entrepreneurial ecosystems. More importantly, these types of initiatives help to bring new business ideas, which augment the competitiveness of a region in the global market place. Fundamentally important, a diverse and vibrant business community that cooperates to ignite new ventures and share business lessons will continuously challenge its members in hopes of maintaining its competitive edge.

Holistically, alchemy is not an option for communities wishing to maintain a competitive edge in a volatile business climate. It is therefore important that West Michigan balances the essentials of successful entrepreneurial ecosystems. Through these actions, a community has the potential to develop the culture

Figure 9.1 Total U.S.

Investments 2007-2011

4.124 4.111 3.065 3.526 3.673 30.8 30.5 19.7 23.3 28.4

2007 2008 2009 2010 2011

Michigan ranked 21st in the U.S. with 82 deals, and 25th in amount of VC investment ($83 million) in 2011.

Deals

Amount Invested in Billions USD

PricewaterhouseCoopers National Venture Capital Association MoneyTree Report, Data: Thomson Reuters

of a region, which can become a competitive advantage on a global and interconnected market place. A focus on the entrepreneurial soul of a region will aid communities as they embark on a new era of entrepreneurship.

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Diversifying the Entrepreneurial Club As it seeks to diversify its entrepreneurial community, West Michigan would do well to listen to the time-honored ideas of Peter Drucker.On November 11, 2005, a few days short of his 96th birthday, Drucker–author, professor, lecturer, consultant–passed away after a 70-year career that profoundly changed the world of business management and established him as one of history’s most influential business minds. Political and business leaders throughout the world sought his counsel.

In Japan and East Asia, Drucker achieved a kind of rock-star status and was honored with the likes of W. Edwards Deming, founder of the modern Japanese manufacturing system. His innovative ideas about decentralization

Student business plan competitions foster an array of diverse ideas from innovators with diverse backgrounds and experiences. Grand Valley’s 2012 competition featured ventures such as an on-demand bike locker rental system (top), water purification invention (middle) and personalized air vent manufacturer (bottom).

11SPRING 2012 |

and strategic goal-setting were the basis of huge changes at General Electric. A variety of other organizations, including the Salvation Army, the Girls Scouts and Rick Warren’s modern mega-church movement, were deeply influenced by Drucker’s teachings. As his career progressed, he focused less on large corporate organizations and more on the role of entrepreneurship and innovation in a changing and evolving world economy.

He continuously expanded his field of knowledge, diving deeply into such subjects as Eastern philosophy and early medieval Paris. He did this because he understood that new experiences, intellectual endeavors, and an appreciation for diversity are key to nurturing ideas and creating new ventures. Entrepreneurs who are exposed to an array of experiences, he reasoned, are better equipped to make those ventures successful. Such openness to change is also vital for investors looking

Drucker, the author of over 35 books and numerous publications,

received the Presidential Medal of Freedom in 2002 for his lifelong

dedication to management.

to discover enterprises that will cater to the changing needs of an increasingly diverse world of consumers. Similarly, angel groups and early-stage investment vehicles need to proactively seek diverse membership to aid in their understanding of these dramatic changes.

Instilling New Experiences and Diversity in the World of Entrepreneurship Communities benefit from actively encouraging women, ethnic minorities, and people from different disciplines to participate in entrepreneur development programs. For example, business plan competitions, which typically attract white male participants, need to reach out and attract members of underrepresented groups. Similarly, expanding the reach of entrepreneur programs to academic disciplines outside of business schools expands the potential for uncovering fresh new ideas.

Source: Estimates calculated by Robert W. Fairlie, University of California, Santa Cruz, using the Current Population Survey. The entrepreneurship index is the percent of individuals (ages twenty to sixty-four) who do not own a business in the first survey month that start a business in the following month with 15 or more hours worked.

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2011 Index of New Entrepreneurs

By Gender By Age By Race

Men and women experienced slightly declining rates of entrepreneurial activity in 2011. Average rate of activity for men over the 16-year period was 0.37 percent. Average rate for women was lower at 0.23 percent. Gender Breakdown: Male: 62%, Female 38%

White Black Latino Asian Other 20-34 35-44 45-54 55-64Male Female

An aging population and increasing rate of entrepreneurship among older adults led to a rising share of new entrepreneurs in the 55 to 64 age group. In 1996, this group represented 14.3 percent of new entrepreneurs. In 2011, it represented 20.9 percent of new entrepreneurs.Age Breakdown: 20-34: 29%, 35-44: 22%, 45-54: 28%, 55-64: 21%

The entrepreneurial activity rate among Latinos decreased from 0.56 percent in 2010 to 0.52 percent in 2011, but remained relatively high.Race Breakdown: White: 60%, Black: 9%, Latino: 23%, Asian: 5%, Other: 3%

Represents 1% of total new entrepreneurship activity in the U.S.

JOHN KERSCHEN

Diversifying Entry Points to the Entrepreneurial Ecosystem

It is also essential to have various ways for individuals to enter the entrepreneurial ecosystem. If the traditional path is through the club-like nature of existing angel groups, entrepreneurial competitions, and startup programs, the system will continue to get individuals who are already familiar and comfortable with the process. To its credit, West Michigan does seek to promote diversity within the ecosystem through such organizations as the Hispanic Chamber of Commerce, the Grand Rapids Inventors Club, Grand Rapids Opportunities for Women, and the 5x5 competition. While

these and other organizations have provided support and guidance to many new entrepreneurs, much more needs to be done to enable further sustainable changes in the entrepreneurial ecosystem.

Modifying the Financial Institution

Financially successful community members also need to step up their entrepreneurial support by investing their money in promising ventures and their time in mentorship or other related programs. When entrepreneurs receive support from their communities, success follows. Ted Zoller, PhD and entrepreneur researcher at University of

North Carolina’s Kenan-Flagler School of Business, has shown that the strength of an entrepreneurial community is greatly affected by the presence of its deal-makers — individuals whose time, money, and support bring investors and entrepreneurs together.

In all these endeavors, we have much to learn from Peter Drucker and his systematic approach to seeking out new thoughts and perspectives. If we in West Michigan apply that same discipline in creating a more diverse and powerful entrepreneurial community, everyone–whatever race, creed, heritage, or background–will reap the benefits.

Q&A

WEST MICHIGAN’S RISK AVERSION

JOHN KERSCHEN How has this attitude affected

economic growth in West Michigan? Conservatism has held back some industries and economic growth. The tendency to avoid first-mover opportunities means our area waits for evidence of progress from outside communities and industries. Can you compare and contrast Grand Rapids to another city, and would it be beneficial to adopt some of their attitudes towards risk?

Relative to Ann Arbor, GR is much more conservative and focused on its own opportunities (or with a close circle of friends) rather than encouraging an open review/sharing of new ventures. Embracing the value of learning via trying and failing, versus never trying, would be a benefit to our community.

Are entrepreneurs at a disadvantage or an advantage living in West Michigan, and why? For now, I would say they are at a disadvantage, as the infrastructure and culture are not yet well developed. The cost of living and beginning a startup is lower in West Michigan, so in that respect, it is better than some other areas of the country. Being the managing director of Michigan Accelerator Fund-1, what words can you offer entrepreneurs who are searching for funding in West Michigan?

Search anywhere and everywhere for funding, and don’t settle for the first interested party. Pursue multiple sources and types of funding – both in West Michigan and outside the area. Keep your burn rate low, but dare to be bold with your plan. The State of Michigan has many programs to fill gaps or supplement private dollars, so take advantage.

When you speak about risk aversion what are you referring to from a financial perspective?

It refers to the desire to avoid financial loss. We put strategies in place to contain or mitigate various risks that might be present in an investment or business operation.

How does a micro-culture within a community develop its risk tolerance, or lack thereof?

Risk tolerance for a community is acquired through a reaction to collective experiences over time. The venture capital community, for example, shares its successes and failures over time to arrive at desired returns for given risks.

What is West Michigan’s attitude and approach towards risk in general? As it relates to investments?

Generally, West Michigan is a conservative community balanced with an entrepreneurial spirit. Individuals are willing to take risks within their own business but less comfortable and experienced in taking investment risk. It’s clearly a culture that views failure as bad rather than a learning experience.

West Michigan’s political, financial, and social environments are seen by many as conservative and slow moving. Shedding light on the intricacies of doing business in the region and the difficulties entrepreneurs face while navigating this business environment, John Kerschen, Managing Director of the Michigan Accelerator Fund, shared some insights on the situation. He has spent over 22 years working with early-stage investments, commercial banking, mergers and acquisitions, and investment banking.

13SPRING 2012 |

Q

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trade-off between doing good and making money,” explained Groos. “Investors can have both.” Event participants were able to sit in on panel discussions by representatives from notable Michigan investment firms on topics including angel investing, later-stage private equity, early-stage venture capital, and real estate syndication. John Kerschen, Managing Director of the Michigan Accelerator Fund-1, noted that each form of investing provides unique advantages and risks. Questions ranged from investment time frames to levels of returns expected to the role an investor plays in an investment fund. Panelists stressed the importance of knowing who the investor will be working with, whether that be a fund manager, property manager, or fellow angel investor.

The day closed with a recap of Michigan’s entrepreneurial scene. The state is becoming a hotbed for innovation and technology companies, but investors must be prepared to handle some volatility in return. “Investors should be prepared to lose money in eight of ten opportunities in a portfolio,” remarked Dr. Ramsinghani, who discussed the bittersweet nature of atypical investing. He called for strong leadership in enticing potential investors in West Michigan.

Paul Brown, vice president of the Capital Markets Group with the Michigan Economic Development Corporation, gave the day’s final presentation and

emphasized the state’s efforts to fund the programs that make quality investing possible.

The Center for Entrepreneurship & Innovation hopes this will become a recurring event to keep local investors interested in local opportunities.

In projects involving local talent, investors can get just as excited as entrepreneurs. That became evident on December 15, when the Center for Entrepreneurship & Innovation, along with partnering sponsors, brought together 170 eager investors, fund managers, and business professionals for Invest Locally, Invest Profitably, an event that highlighted the wealth of investment opportunities in West Michigan.

In his opening address on atypical investing, Michigan native Tom Groos, a partner at City Light Capital, a New York City-based venture capital firm, emphasized patience, discipline, passion, and understanding as crucial to realizing substantial long-term returns after periods of short-term volatility. Reaffirming this point in a later presentation, Dr. Mahendra Ramsinghani, Manager of Invest Detroit–First Step Fund, stated that since 2007, over $200 million has been invested in Michigan companies, and nine companies have had what experts call “successful exits” valued at $940 million. Of course, no investment comes without risk, and Groos recommended planning for the worst scenario by setting a “stop-loss” point. He also noted that atypical investing can provide diversification, supplement an investor’s financial portfolio, and produce nonfinancial rewards. For example, City Light Capital invests in energy and environmental projects whose global mission reaches far beyond financial returns. “There is no

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Four Types of Investment Opportunities were Presented at the Conference

Angel investors are SEC-accredited individuals with a net worth exceeding $1 million and annual income greater than $250,000. They often organize themselves into groups or networks to share research and pool their investment capital. Individuals are attracted to angel investing because it offers more control and responsibility in the investment process compared to other forms of investing.

Venture capital is pooled money from the state, individual investors, investment banks, and a number of other institutions. This form of capital is popular among new companies or ventures with limited operating history. Venture capitalists typically have a say in company decisions through board-appointed positions in addition to an equity stake. Fund managers actively manage the pooled resources, and certain firms invest as early as a university-lab concept is developed.

Private equity funds are raised from individual, retail, and institutional investors for the purpose of leveraging a buyout, providing growth capital, or contributing to an add-on investment. The typical client company has seen many seasons of operation and therefore has experience with economic swings. Investments are made directly into private companies or conducted buyouts of public companies that result in a de-listing of public equity.

Real estate investing involves the purchase, ownership, management, and rental or sale of real estate for profit. Returns can be realized immediately with this type of investment, but ideal returns can take a five or more year commitment. Real estate syndicates are investing organizations that purchase a property. Any piece of property can yield returns, but multifamily and industrial-use investments have been more secure options as of late.

Angel Investing/1 Early-Stage Venture Capital/2 Later-Stage Private Equity/3 Real Estate Syndication/4

The Invest Locally, Invest Profitably education conference offers an opportunity for investors

to learn about a range of private capital investments that can diversify

portfolios, earn attractive returns and contribute to the

success stories of West Michigan’s next

generation businesses.

15SPRING 2012 |

www.gvsu.edu/investmi

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Tree Huggers is an environmentally responsible business, dedicated to educating customers in leading environmentally sustainable lives. Owners Angela and Dan Topp, opened their first store in Holland two years ago and a second store on Wealthy Street in Grand Rapids in 2011. Tree Huggers seeks to break down what can be an intimidating process of living sustainable into more manageable steps.

... IT’S A COMMUNITYmore than a store

Tree Huggers owner Angela Topp with the Earth Day limited edition reusable bag by ChicoBag.

17SPRING 2012 |

... IT’S A COMMUNITYmore than a store

come in and get information or provide information,” Angela says.

The social value that Tree Huggers creates for its immediate customers can spread to the community as well. As an example, Angela spoke of a customer who had aspirations for renovating his home in a sustainable manner. While she was unfamiliar with green renovations, she was able to refer the customer to someone who could help-connecting her social entrepreneurship, and her customer, with another community resource.

As a social entrepreneur in West Michigan, Angela was told to expect difficulties, including a slow response to the opening of her Holland store. But she was surprised immediately by the number of customers who were interested in living sustainably, but had nowhere to shop before Tree Huggers.

Angela admitted that it may have been easier to start Tree Huggers elsewhere,

Awarded by the Grand Rapids Neighborhood Business Alliance, 2011

Tree Huggers owner Angela Topp

but West Michigan is her community and she wanted to provide services to the people she thought could benefit the most from them. She wanted to offer green consumers the opportunity to do business with someone who “does things the way that they would do them.” Tree Huggers lives by the sustainability principles it promotes by being waste-free, and an example to others who wish to be more sustainable.

Tree Huggers creates social value and adds to the overall entrepreneurial culture of Grand Rapids and West Michigan. It educates its customers on the principles of living sustainably and cultivates a community of individuals who share a passion for sustainability. The passion that Angela has for what she’s doing is fundamental to the success of social entrepreneurs like her and the impact they have on their communities.

www.thetreehuggerstore.com

The lack of accessibility to products was one of the leading factors that inspired Angela to open Tree Huggers. She noted that she found herself purchasing more products online but was frustrated with not being able to see the products or talk to anyone in person about them. Tree Huggers seeks to alleviate this frustration by providing a communication link with knowledgeable people who have used the products that customers may see online. Angela proudly declares Tree Huggers’ pride in, “creat[ing] a place where you really feel comfortable [asking questions].”

One fundamental difference between social entrepreneurs and traditional entrepreneurs is their commitment to creating social value and working towards eliminating social problems. This distinction is exemplified in Tree Huggers’ culture of functioning as a community as compared to a store. “We [sell products] so we can have the conversations with individuals about their compost bin or about their recycling…people can

SPRING 201218|

N DIVISION N DIVISION M DIV “The goal is to open

the store, react to the demand, and adjust.” -MICHAEL MRAZ

Business incubation is increasingly becoming a common practice throughout the country. While incubators are continuously popping up in major entrepreneurial hubs, they are also forming in smaller communities, where the cost of retail space is an impediment to developing businesses. By facilitating local startups, incubator spaces generate new ideas that thrive in the entrepreneurial market of West Michigan.

In Grand Rapids, a new retail incubator, MoDiv, has been established at the intersection of Monroe and Division. Financed through Rockford Construction, and inaugurated at the start of ArtPrize 2011, MoDiv aims to jump-start new retail businesses. Currently, it houses nine tenants who have leased prime retail space in the heart of the city. Michael Mraz, Vice President of Development at Rockford Construction and part owner of MoDiv, refers to this project as, “[a way] to continue the city’s goal of having and encouraging retail downtown.”

Bokay by Eastern Floral

Chai Boutique

Sofia Bella Couture

Within its open floor plan, MoDiv features glass walls that allow clear views into each shop and throughout the space. “Being with the other tenants in an open concept is a community experience,” says Kiersten Schulte, Marketing Director at Eastern Floral, which opened a new floral boutique, Bokay, at MoDiv. “And there has been a positive response from our customers.” She notes that MoDiv addresses a different market, where “merchandise will be designed and selected to meet the needs, and cater to the tastes of downtown residents, workers, shoppers, and visitors.”

Another tenant, Chai Boutique, sells an eclectic mix of vintage and contemporary clothes at affordable prices. Owner Sarah Ables also paints customers’ vintage furnishings and has worked on pieces for celebrity Rachel Ruiz. She discovered MoDiv during ArtPrize, and fell in love with the concept. “We moved from our previous shop on the northeast side of town to MoDiv within three days of discovering the building,” says her husband, Lenny Ables, “we are very happy here and we can’t wait until the summer when all the festivals begin. People are just going to wander in and see how amazing this space really is.”

“Customers are always pleasantly surprised to see all we have to offer under one roof,” Sarah adds. “It has really become a community within a building. “We originally moved here for more foot traffic. We had no idea we would also gain a family.”

Brandice Labadie’s Sofia Bella Couture, a clothing and accessory boutique inspired by the birth of her daughter, Sofia, also calls MoDiv home. The boutique sells clothes and fashionable accessories for the “posh tot.” Labadie made the decision to move into MoDiv because of the affordable and manageable space. With the amenities and short-term leases MoDiv offers, Labadie got the opportunity to make her dreams reality. “Sofia Bella Couture was a brand new venture, and our opening in MoDiv was our debut,” Brandice says proudly.

19SPRING 2012 |

Other Businesses in MoDiv:

Kitchen Sinc Wolverine Company Store Haworth Interphase 6.25 Paper Studio Vue Design C-Prime

MoDiv also houses the Wolverine Company Store, which sells an array of goods for women, men, and even dogs. The Rockford-based company has ventured out and made the space another retail outlet for its goods.

For those needing a place to bake or cook meals for sale, there’s Kitchen Sinc, an open kitchen that is available for rent to home-based catering or baking companies. Kitchen Sinc also features cooking classes and a retail store and café.

With entrepreneurial ventures like MoDiv giving downtown a new kind of shopping experience, Grand Rapids continues to expand its appeal–not only to customers but to interested entrepreneurs who see the good things that are going on there.

www.shopmodiv.com

SPRING 201220|

PILLAR ORGANIZATIONS SPINOUTS West Michigan is home to a rich array of businesses that began as family-run ventures and went on to become national and international successes. The list includes Amway, Meijer, Steelcase, Haworth, Wolverine World Wide, Bissell, and Herman Miller. All of these companies have grown and thrived on innovation.

Now, a few of them are working directly with startups to help them move forward in the entrepreneurial community. They’re doing it through GRid70, a collaborative workspace developed by Meijer, Wolverine, Amway and Steelcase. The space is home to the innovation departments of each founding member. It is an experiment in the interaction between creative people in distinct organizations, as cross-corporation teams routinely form to tackle tough challenges. In making the space available to members of the area’s startup community, GRid70 gives them access to corporate resources in a controlled setting.

GRid70 also offers The Lean Startup Circle, a monthly workshop that educates entrepreneurs on lean startup methodology, and Wakeup and Startup, where area entrepreneurs come together to discuss and solve tough challenges, collaboratively.

Rick DeVos, grandson of Amway cofounder Rich DeVos, leads Pomegranate Studios, a business incubator responsible not only for the ArtPrize competition, but also for developing resources to help the startup community.

Pomegranate Studios takes a holistic approach to creating a vibrant startup ecosystem, targeting specific programming to each stage of early entrepreneurship. 5x5 Night addresses the earliest ideas, awarding $5,000 in seed funding to the idea best described in a five-minute elevator pitch. Once an idea develops, the Momentum team helps it gain steam. Momentum is a three-month-long seed accelerator designed to give those ideas, that have demonstrated potential, the financial and intellectual resources needed to test the validity of the business model and market

assumptions, and, potentially, build a prototype.

Once a startup has been formed, it needs somewhere to set down roots. Enter Steelcase, which contributed two coworking spaces that provide office space and networking opportunities for startups. The 654 Croswell coworking space houses companies in East Grand Rapids, while The Factory offers space downtown.

Few startups are the kind of high-tech companies one might find on the cover of Inc. magazine. Many entrepreneurs create businesses as a way to support their families. For these entrepreneurs, specifically those who are either women or minorities, Eastern Floral has created the International Center for Entrepreneurial Excellence. This incubator is dedicated to providing top-tier physical and networking resources to West Michigan startups. Seven young businesses currently call the ICEE, home, working in collaboration with Eastern Floral in the GOEI Center.

West Michigan’s commitment to entrepreneurship also extends to training.

GRID 70 POMEGRANATE KELLER FUTURES CENTER THE FACTORY

645 CROSWELL INTERNATIONAL CENTERFOR ENTREPRENEURIAL EXCELLENCE

MODIV

Meijer Amway Steelcase Eastern Floral

Cascade Engineering

WolverineWorldWide

West Michigan’s corporate

leaders provide support for

the next generation of

startups.

START YOURCORPORATE ENGINES

21SPRING 2012 |

Put forth by Cascade Engineering, the Keller Futures Center, located at Grand Rapids Community College, is a unique innovation training center, offering project-based opportunities for people and organizations to learn new skills while solving community issues. The Futures Center demonstrates a West Michigan corporation’s commitment to building the region’s entrepreneurial activity through

innovation training, leveraging the region’s unique skills in human-centered design.

West Michigan startups are benefiting from their relationships with the corporations that call our region home. After all, they were once startups, too.

CORPORATE ENGINES

GRid70 enables startups to learn

from some of West Michigan’s most successful

corporations

The life of an enterprise is dynamic and unpredictable, but its growth can be characterized by specific business development stages. The conceptualization/idea generation stage is crucial to the mission, purpose and goals of the organization. The early-stage will attract private and angel investors especially for businesses identified with high growth potential. During the early-stage, customers will be identified and

the product or service will undergo field-testing and development. Venture funding is generally sought to expand the company after feasibility is established. After the business owner(s) have reached a point where it can be profitable to sell or advisable to withdraw, an exit strategy will emerge. As the mission of a company is unique like the development of its existence, so are the stories of the following companies.

The term ‘early-stage’ is broadly defined as pre-revenue business development. Often, it means a company possesses a working prototype or defined service model, and has a detailed sales and marketing plan.

Venture backed companies are categorized as businesses that have received an investment from a venture capitalist. Investments are made in startup companies with considerable risk and high growth potential.

A business exit refers to the sale of equity and transfer of corporate ownership to another entity. Exits allow stakeholders to recoup the capital initially invested in the company and hopefully turn a profit.

STAGES OF ENTREPRENEURSHIP

STAGE EARLY VENTURE EXIT

SPRING 201222|

Ryan Vaughn is the Co-Founder of Varsity News Network (VNN), an online high school sports media network, empowering high school journalists to gain relevant experience while ensuring that athletes from every sport receive the coverage they deserve. He earned his Master of Communication from Grand Valley State University in 2010.

Vaughn was accepted into the 12-week Momentum-MI seed accelerator program in 2010, providing him with $20,000 seed money to work on launching his new company and access to seasoned entrepreneurial mentors to help guide him throughout the process. While juggling his work with VNN and graduate courses, he also worked as an outreach consultant for the GVSU Center for Entrepreneurship & Innovation. In that role, he worked on promoting and marketing the CEI’s community initiatives, coaching and mentoring GVSU student entrepreneurs,

Made at GVSU Early-Stage

and fostering connections between CEI and the young entrepreneurial community in West Michigan.

All that hard work and determination paid off in just two years. Since the launch of VNN, Vaughn and his partner have secured 24 customers and generated over $70,000 in sales. In March 2012, Vaughn closed on a seed round of $500,000 from West Michigan investors and the State of Michigan to grow across the state.

Vaughn’s determination, intellect, and perseverance have played a major role in his success. At the same time, the GVSU’s commitment, through CEI, to foster, impact, and provide a foundation to help budding entrepreneurs, has been crucial in helping students like Vaughn start and succeed at their own ventures.

How has GVSU played a role in your business development? CEI gave me the opportunity to connect with people around the community and to get accepted into Momentum Michigan, which gave me seed funding to launch. The School of Communication was flexible enough to allow me to write VNN’s initial business plan as the capstone project for my master’s program.

Were there any particular classes, subjects or professors that made a positive influence along your entrepreneurial trek?

Pete Haines, an adjunct professor at GVSU in the School of Communication, was the advisor for my independent study classes that pushed my business forward with business-plan writing, feasibility analysis, and more. He still serves as an informal advisor. Do you feel that GVSU fosters entrepreneurship?

I feel that GVSU does a lot to foster entrepreneurship, but there is still a long way to go. West Michigan still feels like, to some extent, if you’re not getting a job at a big company after college, you’re somehow doing it wrong. That’s an uphill battle for CEI to fight.

What improvements could be made to help students who want to start a business?

Allowing students an opportunity to intern with startup companies in West Michigan would go a long way toward giving them the information they need to know if they really do want to start their own business.

The tough thing here is that the best students want a paycheck, but the startups with the most valuable internships most often don’t have the resources to pay interns. Establishing a program in which GVSU compensated interns for their work at local startups would be valuable.

“College is the perfect time to start a business. You have access to tons of resources, and it never gets easier to try something new.”

www.varsitynewsnetwork.com

RYAN VAUGHNCo-Founder of Varsity News Network (VNN)

23SPRING 2012 |

How has GVSU played a role in your business development?

GVSU has an exceptionally strong pool of business mentors and resources. I met with Jeanne Ferro and David Sayers with the Small Business and Technology Development Center; they helped me define my market and forecast financials to support the viability of my venture. I went to GVSU’s CEI to start putting my plan together. I met with Linda Chamberlain and she helped put my plan into a logical format that cut to the chase of what the judges and future investors would want to read.

Were there any particular classes, subjects or professors that made a positive influence along your entrepreneurial trek?

Last summer, I worked closely with Ryan Vaughn, the CEI Entrepreneur in Residence, to set challenging, realistic milestones that have helped my business progress to the next level. Meeting with Ryan has been the best investment of time I’ve made. The mentors have connected me with venture capitalists and local business leaders such as Rich and Rick DeVos who have given me valuable advice from their personal business experiences.

Do you feel that GVSU fosters entrepreneurship?

One of my marketing professors let me write a marketing plan about my business for my end-of-term project. He let me do this because he saw the educational value of a real-life experience. Professors like him make GVSU a great school for young entrepreneurs. What improvements could be made to help students who want to start a business?

More opportunities. Whenever I talk with someone about their business, I encourage them to enter the idea pitch competition and then work on a business plan for the business plan competition. Grand Valley does a good job providing opportunities for students, but there is always room for more.

MILES SMITHFounder of Break Away Hook Release System (BAHRS)

“I count the whole experience of commercializing a product as a great success, but my biggest accomplishments to-date have been placing in three different idea pitch competitions, competing in the Accelerate Michigan Innovation Competition and receiving $50,000 in pre-seed funding through Ann Arbor SPARK.”

Grand Valley junior Miles Smith might seem like a typical student wading through the International Business and Marketing curriculum at the Seidman College of Business, but getting a diploma isn’t enough to satisfy his current aspirations. Smith is already knee-deep in the commercialization process for his startup company, BAHRS, LLC. His patent-pending technology, Break Away Coupling, allows anglers to fish without fear of snagging and losing a lure, a costly and common occurrence that, over time, leaves its mark on lake and river bottoms.

As a sophomore, Smith entered two GVSU pitch competitions. Though he did not reel in the big prizes, he learned how to develop a business plan and polish a pitch. He became a regular at the Center for Entrepreneurship & Innovation and utilized West Michigan resources that helped him reach his milestones. GVSU took notice of his determination and funded his provisional patent application. “After Grand Valley saw that I was

dedicated to this and willing to work hard, their goal was to make me successful,” he says.

A year later, Smith competed in four pitch competitions including the Accelerate Michigan Innovation Competition where he was a top ten finalist out of 302 participants. He found more success and earned more capital through these events. His recognition earned him notice in the investment community, where he was able to secure a MEDC Micro Loan from the Ann Arbor Smart Zone known as SPARK. Smith is the first GVSU student to earn a Smart Zone loan while attending school.

An avid fisher, he is treading into waters where few students have traveled. In the process, he is finding a way to make money doing something he loves. He values the connections he has made with fellow competitors, investors, and business professionals. Through his resources and his own initiative, he’s finding ways to bait a hook that will attract the interest of bigger fish.

Made at GVSU Early-Stage

SPRING 201224|

Made at GVSU Early-Stage

Like so many successful entrepreneurs before him, Jason Mascari came up with his big idea while brainstorming with a friend. “We were constantly throwing ideas around for years,” says Jason of his friend and co-founder, Brian Golding. The two young entrepreneurs first thought of Moasis Global in 2008. In three years, the business has developed from idea to fully patented prototype.

Moasis Global is a web-based advertising platform that allows businesses to target specific geographic areas of interest. The company’s technology enables Moasis to outline an entire city with its patented grid technology and distinguish specific markets. Businesses can then choose to target sections of the grid more heavily with their advertising dollars or decrease spending in others. Users see where competing businesses spend their money and where the greatest market opportunity lies. “Businesses currently overspend in markets that they shouldn’t be targeting,” Mascari explains. Moasis is designed to help change that.

Moasis Global has been operating in stealth mode, developing its intellectual

property and validating the assumptions behind the new technology. “The product has morphed drastically from where we began,” Mascari says. In true lean-startup fashion, the team has bootstrapped to get where it is today and is currently seeking seed-round funding.

Mascari points to his team’s mentorship as its biggest asset. “Brian’s father is an entrepreneur himself and began by asking us the right questions, which helped frame a strategy for us,” he says. As budding entrepreneurs, Mascari and Golding have also taken advantage of discussions with venture capital fund managers, who have encouraged them to continually critique their model and product.

“There is a good energy in West Michigan,” Mascari says. “The startup community has a lot going for it, and I encourage people to jump into the network.” As Moasis Global continues to move forward, he advises entrepreneurs to go for it. “You will get the door shut in your face, but continue to seek validation and trust your vision.”

JASON MASCARI

How has GVSU played a role in your business development?

I learned the tools on how to visualize ideas–to take a concept and be able to clearly and visually communicate so others could understand and get excited about it. Were there any particular classes, subjects or professors that made a positive influence along your entrepreneurial trek? The Film and Video program was much more flexible than most other majors at GVSU. A project was assigned and there was no clear path on how it should be done. It allowed the opportunity to explore many options, and if the resources weren’t available, you had to get creative in how you could accomplish bringing your vision to life. Memorable professors, Dianna Morse and Kim Roberts, provided the environment for creative development and encouraged you to pursue your ideas.

Do you feel that GVSU fosters entrepreneurship? It’s exciting to see the new programs allowing students to learn more about being an entrepreneur. These types of programs are on the forefront of education. It’s nice to be in this new wave, where entrepreneurship is fostered, rather than focusing on the more traditional employment route.

What improvements could be made to help students who want to start a business? The biggest improvement is furthering the startup community outside the campus. The more that like-minded people in the area can connect and establish a hub for ideas, talent, and investors, the more opportunity will be available to us all, including access to the resources needed to start and maintain a business. It’s a problem when people think they have to be in Silicon Valley, New York, or even Chicago if they want to start something big.

Co-Founder of Moasis Global

“I didn’t really take a traditional educational route in regards to starting a business.”

www.moasisglobal.com

25SPRING 2012 |

Impact Engineer Venture Stage

Finding Space in the Big Leagues Exit

Social entrepreneurship has recently made its way into the venture capital community through a unique startup accelerator, Impact Engine. Founder Thania Panopolous, a West Michigan native, venture capitalist, and philanthropist, has her unique fingerprint on the new accelerator.

“I believe very much in the intersection between commerce and philanthropy,” she says. “We have to find a sustainable way to solve our world’s issues, without relying on the government.”

Based in Chicago, Impact Engine is the first startup accelerator focused exclusively on investing in social entrepreneurs, a practice Panopolous calls Impact Investing. Launching in September of 2012, the accelerator will provide $20,000 in seed capital to eight to twelve for-profit companies founded to solve a social cause. Impact Engine will provide hands-on mentorship to participating companies throughout a

12-week program, as well as access to industry leaders in one of the Midwest’s hottest startup hubs.

Panopolous brings a strong background of entrepreneurship to the operations of Impact Engine, having started her own integrated marketing services business, and then beginning a career in investing in startup companies. But more than just business, Panopolous is focused on social entrepreneurship.

Impact Engine is the latest in a string of

socially focused ventures Panopolous has started. In a volunteer role at a home for abandoned children in Guatemala, she worked with locals to start businesses in woodworking, talapia farming, and tile sales.

Amazing things can happen when social entrepreneurship meets philanthropy. At the nexus of this intersection, Thania Panopolous continues the task of building social enterprises in the Midwest.

In 2008, while sending each other holiday gift cards via email, Sam Hogg and his cousin had a kind of revelation. A year and 200 retailers later, Hogg’s business, GiftZip, charged into the gift card market. The buying and selling of gift cards–the debit cards that stores, restaurants, and other retailers offer–had traditionally been an in-store process. With the breadth and scope of the Internet, however, Hogg realized that he could save consumers time and retailers energy by providing a way to purchase and send gift cards via email, thus GiftZip was born.

“We began working closely with major industry players,” he says. One of them, SVM, took a particular interest in GiftZip and its growing customer base. “We were essentially first-to-market in 2008, which made us a good acquisition target for larger companies.”

In the early stages of the business, Sam maintained an open communication system with SVM and other industry leaders. In 2011, GiftZip was sold to

SVM. Ultimately, it was Hogg’s networking and communication channels that led to the talks between GiftZip and SVM that resulted in the sale. “Chances for exits come in windows,” he says. “Early on those windows are more frequent and they decrease in frequency as you mature in the industry. I evaluated each option that presented itself and kept this in mind as I made the decision.” For entrepreneurs hoping to one day sell their business, the Michigan State alum

Thania Panopoulos

Sam Hogg

stresses the importance of maintaining a cordial relationship with everyone within one’s network. “If I said my connections from Albion and MSU didn’t help, I’d be kidding myself.” After GiftZip was purchased, SVM retained Hogg to further develop the business. His future as an entrepreneur includes a needed break. “I want to savor the hard work I’ve put in,” he says.

Impact Engine

GiftZip

www.theimpactengine.com

SPRING 201226|

Breaking Barriers

As Amy Engelsman transitioned into her role as CEO of Proos Manufacturing, she faced significant challenges: securing company financials, obtaining funding for purchase of the business, proving her leadership capacity to the lender, and earning the trust and respect of employees despite having worked for Proos for more than 20 years.

As a female entrepreneur and business owner, Engelsman now experiences the challenges of running a business while also dealing with the traditional challenges that women face in the workplace, including those in executive positions. She believes her biggest achievement has been gaining the acceptance and acknowledgement of her peers in a traditionally male-dominated industry. She has done this by believing in the power of relationships and networking while retaining her individual approach to being the CEO of Proos. This has been made easier, she says, by a management team that

understood and believed her vision and commitment to the community.

Engelsman offers this advice to female entrepreneurs and new business owners: “Have confidence in yourself. Network

with a variety of people, including other business owners both male and female. Find your passion, grow with it, and never be intimated or afraid to ask for help.”

Amy EngelsmanProos Manufacturing

Million Dollar Dreams

The story of a $20 million business–started by a man who had labored as a migrant worker and been placed in a special education program because of language difficulties–is testimony to the tenacity, vision, and passion of entrepreneur Noël Cuellar, President and CEO of Primera Plastics, a plastic injection-modeling supplier based in Zeeland. Cuellar’s success is especially notable in a business environment where Hispanic entrepreneurs are in a definite minority. In 2007, the U.S. Census reported that only 1.1 percent of the 817,000 firms in Michigan were Hispanic-owned (about 4.4 percent of Michigan residents are Hispanic, according to the 2010 census). During his company’s startup in 1994, Cuellar had difficulty getting a loan. “Many banks and investors seemed to doubt my ability to succeed,” he recalls, even though he had a letter of intent to do

business with a large firm. “Being certified as a minority-owned business means that you have to prove yourself to the business community.”

Cuellar’s story is more about over performing than overcoming. He sees the work ethic of the Hispanic community as its strongest asset. “West Michigan business leaders need to understand the passion that Hispanic entrepreneurs have,” he says. “We simply don’t know how to quit. Given opportunities, we won’t disappoint.”

In addition to a strong work ethic, Cuellar says that entrepreneurs, whether minority owned or not, need to develop their understanding of the financial realities of business. “In 18 years of business, I’ve learned you must continuously seek knowledge, whether for personal or business growth,” he says. As Primera Plastics navigates the waters of West Michigan’s business community, Cuellar and his team are showing other minority-owned businesses the keys to entrepreneurial success in the area.

Noël CuellarPrimera Plastics Inc.

27SPRING 2012 |

J. Kevin McCurrenExecutive DirectorMaster of Public Health & Health Services Management@JKMccurren Shorouq Al-MallahOperations ManagerMaster of Information Science@ShorouqAlmallah

Adam IngrahamGraduate AssistantMaster of Business Administration @AdamIngraham Austin DeanGraduate AssistantMaster of Business Administration@ADean88

Chelsea GodmerCreative Director BFA, Graphic Design@ChelseaGodmer

Kayla JonesStudent AssistantBA Public & Nonprofit Administration @ItsJustKJ

Felip BallesterosEditor in ChiefBBA, International Business Marketing @BalleFel Paul D SappCreative AssociateMPA, Nonprofit Management & Leadership@PaulDavidSapp

Ryan VaughnOutreach ManagerMaster of Communication@RyanHVaughn Ulandra ReynoldsProgram CoordinatorBA, Nonprofit Management @Ulandra

Photo CreditValerie Waldbauer (cover, pg 2, 3, 7, 9, 16, 17, 18, 19, 24, 25) David Chandler (pg 5, 10, 13, 14, 15, 20, 21, 22, 23) Brenda Kuzyk (pg. 26, Engelsman)

John DeRuiter (pg. 26, Cuellar)

SPRING 201228|

2012EVENTS

Center for

Entrepreneurship

& Innovation

401 Fulton Street West

272 C. DeVos Center

Grand Rapids, MI 49504

www.gvsu.edu/cei

VIEW A COMPLETE LIST OF EVENTS AT GVSU.EDU/CEI MAY 3Michigan Celebrates Small Business Awards Ceremony Small business owners

and community members

from across the state will

show support for small

business champions

and Michigan’s growing

companies. LOCATION The Lansing

Center michigan celebrates.biz

MAY 10 TEDxGrandRapids An independently

organized TED event,

will feature 12 individuals

with ideas that can

change the world.

LOCATION Civic Theatre

tedxgrandrapids.org

MAY 15-16Michigan Growth Capital SymposiumMGCS is the Midwest’s

leading event for attracting

the best investors from

across the U.S. and

showcasing high-quality

investable companies.

LOCATION Marriott

Resort at Eagle Crest michigangcs.com

MAY 17 Michigan Lean Startup ConferenceJoin the revolution and

learn more efficient

business development

processes by attending

this local springboard

event. LOCATION GVSU Eberhard Center

leanstartupmi. eventbrite.com

JUNE 18-22 & JUNE 25-29 Teen Entrepreneur Summer AcademyAn interactive camp for

West Michigan high school

students teaches the

business startup process

through interactive

workshops and creative

problem-solving tasks.

LOCATION June 18-22

Pew Grand Rapids

Campus & June 25-29

GVSU Holland Meijer

Campus gvsu.edu/cei