L. A. SECTION ENTERPRISE CHAPTER

Representatives of small technology firms gathered at a meeting of the L. A. Section Enterprise Chapter held November 30, 2004 at the L. A. Section Offices to hear Mark Lieberman, Administrator of the Business Technology Center (BTC), an organization owned by Los Angeles County. He briefed the group on the BTC mission: to help start-up and early stage technology firms to grow and prosper - describing the services provided and the techniques used by BTC to perform this mission.

BTC, a business incubator that has existed for about six years, has achieved a high success rate. Over 85% of the firms that have graduated from the incubator are still in business. One important key to this success rate is the screening process preceding acceptance by BTC. Thanks in large part to the talents of Mr. Lieberman, a man familiar with venture capital firms and investment banking, in possession of an MBA degree and currently pursuing a doctorate in business while teaching business at USC and other colleges, the screening process provides the key distinction between the entrepreneur with a good idea and one with the capacity to execute.

In screening a candidate Mark conducts two interviews focused mainly on the marketing and financial aspects of the business plan, and also ensures that the candidate has sufficient capital to cover rental of the BTC facility. He leans toward products rather than services and looks for a good fit with the BTC facility and BTC capabilities. If the entrepreneur passes this screen, he must next present his plan to a steering committee consisting of marketing and legal experts plus venture capital representatives and PhD scientists.

The BTC facility is located in an Enterprise Zone, thereby enabling the start-up to enjoy certain advantages provided by law: hiring credits, tax credits, allowances for certain expenses, and certain favorable loan conditions. It is 40,000 square feet in size. Rental rates are low, private offices are spacious, parking facilities and kitchen facilities are good. Being in the Pasadena area, it is close to high-powered technology resources like JPL and Caltech. Information technology and communication facilities are state-of-the-art. Mark is also seeking access to laboratory facilities near by.

BTC provides access to various resources of value to the entrepreneur. First among these is the access to venture capital. Venture capitalists use BTC to help choose which start-ups to back. The typical venture capitalist is looking for a growth to $100 million in sales within five years and up to $200 million thereafter. To be persuasive, the start-up needs a good business plan. Two key elements of a good business plan are 1) an idea that is well thought out and 2) milestones and realistic probabilities for meeting them. Mr. Lieberman seeks out interested venture capitalists to assist the start-up.

BTC also seeks out favorable equipment leasing arrangements for equipment needed by the start-up.

BTC also provides coaching and mentoring on leadership and management issues, focusing on helping rather than running the enterprise. Educational programs include workshops and seminars covering subjects not familiar to most engineering graduates, such as: presentation skills, marketing, sales, branding, compensation, human relations, problem solving, and legal issues. Opportunities to network with the local technology community, introduction to strategic relations, brown bag lunches, leadership talks by eminently successful leaders, and CEO roundtables are also featured.

The BTC also provides access and referrals to service providers and access to human capital in the form of technical, business and information technology consultants and interns available at ten local colleges and universities.

Most of the start-ups with BTC have been companies selling commercial products. The maximum time allotted to the firm by BTC to achieve self-support is about five years. Most of the companies have left before reaching that time limit and, as noted above, have remained viable.

The slides presented by Mark Lieberman may be viewed on the AIAA Los Angeles Section Enterprise Network web site, www.aiaaenterprise.org, by clicking on Archive of Speaker Presentations at Chapter Meetings and then clicking on the Download Slides package next to his name.

Richard Denison

Guido Frassinelli