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The Entrepreneurs’ Chronicle

Issue One | Monday, March 3, 2003

Editor: Ryan P. Allis

Entrepreneurs are simply those who understand that there is little difference between obstacle and opportunity and are able to turn both to their advantage. – Niccolo Machiavelli, 15th century Italian Statesman


1. Message from the Editor: On Entrepreneurship and This Newsletter
2. Understanding Money Sources
3. Sync Your Business Goals with Your Personal Goals
4. Excerpts from the Entrepreneur Interview Series
5. Book Review: Entrepreneurship: A Contemporary Approach

This newsletter may be read online at

Section One
Message from the Editor

Welcome to the first issue of The Entrepreneurs’ Chronicle. This newsletter will contain articles on topics related to entrepreneurship, interviews with entrepreneurs, and reviews of books appropriate for the entrepreneur. It will be published on the first weekday of each month.

This month’s issue begins with an excerpt from an article from the Business 101 series at entitled, "Understanding Money Sources." Following this is an article by myself on syncing your personal and business goals and the differences between a high-potential and lifestyle venture. The newsletter concludes with selected excerpts from the Entrepreneur Interview Series and a book review on the text Entrepreneurship by Donald F. Kuratko and Richard M. Hodgetts.

As a quick background, I am a business owner and first-year undergraduate student at the University of North Carolina at Chapel Hill. Though I first became an entrepreneur at age eleven, providing computer help to persons in my community, I first seriously caught the entrepreneurial bug during my senior year of high school working very closely in the marketing realm with the owner of a company in the nutraceuticals industry that went from $0 to $1M in sales in about a year.

This year at UNC, I have incorporated my business, Virante, Inc., have become the Vice President of the Carolina Entrepreneurship Club, and have become a research assistant at the Center for Entrepreneurship & Technology Venturing at UNC’s Kenan-Flagler Business School. I am also a syndicated columnist on the topics of young entrepreneurship and web marketing, the founder of the Entrepreneurs’ Coalition, a non-profit organization dedicated to building an international network of entrepreneurs, and am in the process of writing a book entitled Zero to One Million, which will be a guide for entrepreneurs wanting to build their first million dollar company.

In July of 2002, I began and with the help of a team of young entrepreneurs have built it to be an extensive resource for entrepreneurs and business owners. This newsletter will hopefully serve as a great extension of the site and come to be an informational publication that provides added-value to you each month.

The word ‘entrepreneurship’ is something that I hold dear. I believe it is an essential component of a prosperous world society and global economy, is a core driver of innovation, technological development, and leads to a more efficient allocation of scarce resources, and improves the standard of living for all. It opens up new possibilities, opportunities, and worlds for many.

On the topic, three time Pulitzer Prize winner, New York Times journalist and author Thomas Friedman said last week in a presentation here at UNC;

The second largest Muslim country in the world is India, but there are no Indian members of Al Qaeda. There are three reasons for this. One, women have rights, two, they have freedom, and three, entrepreneurship is possible. The ability to have an idea and add hard work and earn money is extraordinarily enriching and adds meaning and possibility to their lives. You give the terrorists this possibility, you add freedom of speech and the rule of law, and they won’t want to blow up the world. As former secretary of state Larry Sommers says, ‘In the history of the world, no one has ever washed a rented car.’ Give these guys something that is theirs, the possibility to gain from their hard work, the possibility to be an entrepreneur.

No matter what level you are at or where in this world you are, I encourage you to seek the best from yourself, to give back to your world, and be cognizant of all who hurt and who do not have the opportunities you have. I wish you the best on your entrepreneurial journey and encourage you to challenge your limits, have great persistence, and make large ripples in the water.

If you have any comments, suggestions, or would like to contribute content to be published in the newsletter or online, I encourage you to contact me at Please do feel free to forward this newsletter on to your colleagues and associates. On behalf of the team I thank you for being a subscriber.

Yours entrepreneurially,
Ryan P. Allis, founder
Business & Entrepreneurship Resource

Section Two
Understanding Money Sources
Contributed by

Never enough money. How many times have you said that? You need capital to get sales, buy inventory, pay your employees, purchase assets, and pay taxes. Your need for capital is a continuing one. To just stay in business or to expand, the business owner needs capital, but where do you get it?

In order to secure the capital they need, business owners must understand the various sources of money that are available to them such as the following:

·         Capital generated internally.

·         Capital available from trade creditors.

·         Borrowed money.

·         Sale of an ownership interest in the business to equity investors.

Each of these capital sources has unique characteristics. These characteristics must be fully understood by the small business owner so that he or she will know what sources are available and which source is best suited to the needs of the business.

This article has been designed to help the business owner in the following ways:

·      Recognize those situations that create a need for additional capital.

·      Identify the capital sources that are available to the small business owner.

·      Manage the business judiciously to take full advantage of the capital that can be generated internally.

·      Establish a plan to permit the client to take full advantage of trade capital without jeopardizing credit status.

·       Identify various specific sources of debt and equity capital.

·       Identify collateral that can be used to secure loans.

·       Identify potential compensation to equity investors such as opportunities for dividends, capital gains, or a future public offering that could attract equity capital.

To read the full article and learn about the causes of additional capital need, internal financing sources, trade credit, debt capital, and equity capital, visit:

Section Three
Sync Your Personal Goals with Your Business Goals
by Ryan P. Allis

Before you can set goals for a business you must articulate your personal goals. Do you want to attain a certain lifestyle, gain respect, create an innovative product, build an organization that will outlive you, contribute to your community, have an outlet for your talent, or be free from your job? What are the reasons that you wish to start your business?

An entrepreneur’s personal and business goals are inextricably linked. Unlike the manager of a public company who has a fiduciary responsibility to maximize value for shareholders, as the founder of a company (at least until you accept outside capital in exchange for equity) you have the ability to build your business to fulfill personal goals. If you are unsure of these goals, take out a pen and paper and write down every reason you have for starting a business and what your personal goals are.

The first step is to decide is whether your goal is to build a lifestyle company or a high potential company. Lifestyle companies include small consulting companies, local restaurants, laundromats, barber shops, hardware stores, or any kind of franchise. Generally, lifestyle businesses are local businesses that will likely never have yearly sales greater than $1,000,000 in a year. The entity structure of these companies are usually sole proprietorships, LLCs, or S corporations.

The advantages of starting a lifestyle company include being able to control the company, being able to continue to do what you love without having too much risk, having a positive cash flow from the early going, only having to report to yourself, having a relatively constant cash flow, and being able to take time off whenever you want. Disadvantages include not being able to hire top talent (as talented people usually avoid companies that offer no stock options and only limited opportunities for personal growth) and not having the chance for huge gains.

High potential companies, on the other hand, generally are either developing a product (that they will sell internationally), are based on a technological breakthrough or change in regulatory environment, or are raising venture capital to explore a lucrative opportunity. These companies are usually C corporations, and if they succeed, have the possibility of getting at least to the $50,000,000 in sales per year level within five years.

Advantages of starting a high potential company include the possibility for large returns on your investment, the ability to attract outside investment, and the ability to build a great team who will work to make your company succeed. Disadvantages include the usual necessity for the company to take on large amounts of debt or lose significant amounts of equity, a loss of control as investors and employees dilute the founder’s equity, and the long wait to reach positive cash flow. Finally, you must have the right plan and right skill set to effectively build a high potential business. Few people can do it.

On the topic of lifestyle versus high-potential ventures, Harvard Business School researcher Amar Bhide, in his article “Questions Every Entrepreneur Must Answer” writes:

The company of a lifestyle entrepreneur does not need to grow very large. A business that becomes too big might prevent the founder from enjoying life or remaining personally involved in the work. In contrast, entrepreneurs seeking capital gains must build companies large enough to support an infrastructure that will not require their day-to-day intervention.

There is surely no right or wrong choice here. You just have to make sure the choice you make syncs with your goals. If you are able to take a huge risk and are shooting at a five year payout of $10,000,000 then you will need to start a business that fits within the high-potential category. However, if you are unable or do not wish to take a large risk, or are content making a few hundred thousand dollars per year, a lifestyle business may be for you.

On the topic of aligning personal and business goals, Amar Bhide continues in his article to say:

If entrepreneurs find that their businesses, even if very successful, won’t satisfy them personally, or if they discover that achieving their personal goals requires them to take more risks and make more sacrifices than they are willing to, they need to reset their goals.

If you have yet to do so, I encourage you to commit your personal goals to writing. Analyze the reasons you wish to start a business. Then take a look at the amount of risk you wish to take at this point in your life and the return you hope to achieve and go from there. Align your goals and then proceed to give everything you can to accomplish them.

Section Four
Excerpts from the Entrepreneur Interview Series

In collaboration with the Center for Entrepreneurship & Technology Venturing (CETV) at UNC’s Kenan-Flagler Business School, the team will be beginning the Distinguished Entrepreneur Interview Series this month. To be fit the selection criteria one must currently be or have been a founder, co-founder, or start-up CEO in a company that has done more than $5M in yearly sales. Excerpts from these interviews will be published in this newsletter in the coming months in this section.

Below, are excerpts from interviews done with Steven Kiely, CEO of Stratus Technologies, a provider of fault tolerant and mission critical servers, and Jud Bowman of Pinpoint Networks, a leading provider of software and services for the management and delivery of mobile data services based in Research Triangle Park, North Carolina.

The Interview Series may be viewed online at If you are a business owner and/or entrepreneur we encourage you to fill out the questionnaire and add your own interview to the collection.

Interview Excerpts: Steve Kiely

But what really sold the business plan was the quality of management team, because we had experienced people who had all done this before, so there was low-risk in terms of the management – usually not the case in a technology startup. – Steve Kiely, CEO of Stratus Technologies

When you look at investor dynamics, probably the most important thing is the valuation the investor has to pay. Their ability to get return is a function of being able to get a multiple on the investment, so if you have a high valuation to start, it is very hard to get a return. If an investor can get in cheap it makes it quite attractive. And because the assets we were purchasing had virtually no value at all to the seller, we were able to get the assets at a fraction of what one would reasonably expect to pay for them. What really made us successful in the first couple of years was the fact that we bought cheap. – Steve Kiely, CEO of Stratus Technologies

You can find people that have the prior two categories (market familiarity and strong management skills) who do not have integrity that are more of a liability than an asset. You have to be able to trust people when you are putting something as important as your company’s future in their hands. You’ve got to be able to rely on people to tell the truth and to deal with integrity in good times and bad. That’s usually something you’ll get from references, from personal experience, or from the experience of people you trust. Steve Kiely, CEO of Stratus Technologies

Different people have different strengths. The most important thing in my mind is to know where your limitations are. And frankly, a lot of people don’t get to see where their limitations are without experience. There is some minimum experience needed to accurately gauge whether you are going have the skills required. People can do the traditional course of experiences at different speeds, but some variety of this experience and curriculum is needed in the vast majority of cases. There are some cases in which people are able to abstract the experience out of other people’s experience by hiring more experienced people, but this is rare. Steve Kiely, CEO of Stratus Technologies

Interview Excerpts: Jud Bowman

Research Triangle Park has also been great for recruiting talented employees. One of the first things any successful entrepreneur has to do is to admit what you don’t know, and surround yourself with advisors and employees who can help scale and execute the business. I began building our management team and bringing in experience directors immediately after we raised our first venture capital. – Jud Bowman, CEO, Pinpoint Networks

Focus, Focus, Focus; plan out your strategy; create a culture which hits targets and produces results, but yet fosters creativity and can adapt to change; don’t let ego get in the way of success or tough decisions; prepare yourself and your team for a marathon, since starting a company is not a get-rich-quick scheme or a race to an IPO; be incredibly passionate about whatever idea/business you’re endeavoring to create – think, will this idea still excite me at 2am on a Sunday morning, or on a weekend in the office 4 years from now? – Jud Bowman, CEO, Pinpoint Networks

Section Five: Book Review
Review by Ryan P. Allis

In this first issue I’d like to review a textbook which has been very helpful to me. I first found Entrepreneurship: A Contemporary Approach by Donald F. Kuratko and Richard M. Hodgetts in early February of this year in the bookshelves of the Center for Entrepreneurship and Technology Venturing here at UNC. I checked out the book, and within a week had finished all 716 pages. Chapters such as ‘The Entrepreneurial Perspective,’ ‘Growth and Development of Entrepreneurial Ventures,’ and ‘Cotemporary Challenges in Entrepreneurship’ were especially helpful. The text takes the reader from idea creation, to planning, to raising funding, to building the team, to executing the plan, to expanding into new markets, to reaching a liquidity event. It is an all-encompassing guide and comes highly recommended.

Check your local city or university library first, as it does retail for around US$110. Even at this price, however, it is a sound investment for the aspiring entrepreneur.

Title: Entrepreneurship: A Contemporary Approach
Kuratko, David; Hodgetts,
Richard M.
South-Western College Publishing; 5 th edition


This concludes issue one of The Entrepreneurs’ Chronicle. We’ll see you in April. Next month we will be covering the topics of forming a board, raising venture capital, and how to properly distribute non-qualified stock options or restricted stock to employees and vendors. April’s newsletter will also contain selections from the Distinguished Entrepreneur Interview Series and will review The Mystery of Capital by Peruvian economist Hernando De Soto.

If you would like to contribute content, become involved with the team, make suggestions, or provide feedback please feel free to contact us at

This newsletter is published by with support from the Entrepreneurs’ Coalition.

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“The successful person makes a habit of doing what the failing person doesn’t do.” Thomas Edison, inventor and scientist




This Entrepreneurs Chronicle article was written by Ryan P Allis on 2/28/2005

Ryan P. Allis, 20, is the author of Zero to One Million, a guide to building a company to $1 million in sales, and the founder of Ryan is also the CEO of Broadwick Corp., a provider of the permission-based email marketing software and CEO of Virante, Inc., a web marketing and search engine optimization firm. Ryan is an economics major at the University of North Carolina at Chapel Hill, where he is a Blanchard Scholar. [learn more.