KIT Entrepreneurship Talks – 21.5.2014: The Value Proposition in Business Consulting mit Dr. Edward G. Verlander

For about one year, the KIT founders forge respectively the Institute for Entrepreneurship, Innovation and Technology Management organizes the “KIT Entrepreneurship Talks” (E-Talks) as part of a lecture series for students and interested public. In the 45-minute lecture series KIT Entrepreneurship Talks, inspiring founders and entrepreneurs from the economic sector discuss their startup experiences in different branches. In future, we want to record the E-Talksfor all interested people who can not participate the dates. Stay tuned for the guest speakers in the upcoming winter semester 2014/2015.

Today we start with the first video “Value Proposition in Business Consulting” from 21 May, 2014. The guest speaker, Dr. Edward G. Verlander, is the Managing Director of EG Verlander & Associates. He worked at Lex Electronics and Goldman Sach and has more than 20 years experience as a management consultant. In his talk he will explain the value proposition of business consulting and share how the work as business consultant inspires him.

Basic knowledge for founders in the sciences

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Martin Bäuml

The research results of the scientific institutions and institutes at KIT represent a large potential for scientific and technical spin-offs. In order to support employees interested in technology transfer, the KIT Founders Forge offers the further training “professional patent operation” for scientific workers and high-tech founders at KIT. Martin Bäuml, an academic employee at KIT who is interested in startups, participated in the course. In an interview, we asked him about his experiences in the course.

Mr. Bäuml, where and in what subject area do you work at KIT?

I am doing my PhD at the Institute for Anthropomantics at the Faculty of Computer Science. My doctorate deals with face and person recognition, in particular in TV series and movies.

What motivated you to participate in the seminar?

The topic of patents is always involved when working with new technologies. On the one hand, you constantly read about patent litigations in the media. On the other hand, there are also attempts in our group to patent certain technologies. Personally, I didn’t have any real experience of what, for instance, the legal framework conditions consist of. Therefore, I saw the seminar as a good opportunity to make a first step into the subject area.

What significance does the operation of technologies take in your everyday life as an academic?

We work with a relatively practical orientation, so the application of our technologies is a continuing theme. Nonetheless, our primary goal is publication rather than commercial operation. But, of course, we do develop a feeling for which technologies have potential for further operation when talking to users, for example during BMBF projects.

Had you already dealt with the topic of founding before?

Yes. And at that time, I found the offered seminar through the informational web pages for KIT regarding startups.

Would a KIT spin-off be an option for you?

Definitely. I am thrilled by the support that KIT offers in all kinds of forms for potential founders. The founder scene here is very active and so far it is fun to get a taste of it.

What were you able to draw from the course?

Since I hadn’t really dealt with the subject area before, I was especially interested in the information regarding the foundations of patent rights. Additionally, it became very clear to me how important patents are for KIT and how much support there truly is from KIT in all matters regarding commercial operation.

Would you recommend the course to colleagues?

Of course. I think that anyone dealing with new technology, which is basically all of us here, can profit from having a basic understanding of the framework conditions for commercial operation.

The basics of financing

Sooner or later, every startup project faces the question of financing. Financial means are necessary in order to put the idea into practice and develop products and services out of a concept that are ready for the market. But what options for financing actually exist for founders building up a business? We have compiled a list of the most important financial sources.

Equity

When founders let their own savings, material assets, and personal contributions flow into the business startup, we call this equity. One’s own starting capital can additionally be increased through financial support from a familiar environment (family, friends & fools).

Funds

In Germany, there is a number of funding programs for startup projects and the development of a business. Through these, founders receive supporting financial means from public institutions for a start to independence. Usually, the funding program decides on the purpose for which the funds may be used, such as for equipment and staff. You can search for suitable funds in the state’s funding database.

Business Angels

Wealthy private individuals who contribute to a business idea or a business through active support (know-how, business contacts) and/or with capital are called business angels. Usually, they support young startup projects during the buildup and beginning stage. In return, the business angel generally receives shares in the business. You can establish contact with business angels, for instance, in the business angel network of the CyberForum e.V.

Venture Capitalists

Risk financers who invest in a business during or after the startup stage are known as venture capitalists (VC). Through equity financing, the founders receive borrowed capital and, in return, the financer receives shares and possibly rights in the business. Often, this form of financing is organized through investment companies or venture capital companies. For example, the KIZOO Technology Ventures is located directly in Karlsruhe.

Crowdfunding /Crowdinvesting

In crowdfunding/crowdinvesting, projects and business startups present themselves on online platforms in order to gather outside capital from a crowd. The necessary capital is thus made available through a multitude of smaller investors. A difference is made between “reward-based crowdfunding” through donations, benefits, and counterperformances by the projects and “crowdinvesting” through participation models in businesses. Among the well-known German platforms are Startnext and Seedmatch.

Family Offices

Family offices refer to societies or special departments of banks, where the assets of mostly wealthy families are bundled and used for financing projects and shares. In addition to financial support, family offices can usually also use their business contacts to the advantage of a company.

Bank Loan

Through bank loans, business founders can request a loan or funding credit from banks in particular for their startup plans. The banks decide whether to grant a loan according to their own criteria. The duration and amount of the loan is appropriated in relation to necessity. For example, the L-Bank (Baden-Württemberg) and the KfW (Germany) are active in the area of founder financing.

Are you asking yourself what financing option is the best!? There is no stock response to this question. The choice of financing means depends on many factors and should be looked at in detail and individually for every startup project. The founder consultants of the KIT Founders Forge help you in searching for the financial means that are suitable for your startup project.

Dr. Albrecht Ricken at upCAT

On March 31st, the second round of upCAT (Startup Catalyst) will begin at KIT. During the 12-week intensive program, people interested in founding are guided and coached in their startup plans. They are prepared theoretically and practically for founding a startup or spin-off. KIT professors, as well as experienced senior experts, convey the essential contents regarding the topic of entrepreneurship and provide feedback for the individual startup ideas of participants.For the second time, Dr. Albrecht Ricken is a speaker for B2B and sales at upCAT. He is the business developer of the SAP AG. In a short interview, he discusses his work background, motivation, and expectations for upCAT.

What motivated you to participate as a speaker at the accelerator upCAT?
It fits well to my task at SAP. There, it is my job to accompany innovations from the first idea up until market adoption. Furthermore, I have also already founded a startup.

What is your field of expertise? What will prospective founders learn from you during the Focus Week?
My field of expertise is business development for new products in the B2B area. I am less acquainted with consumer goods business. I can teach founders how to commercialize innovations and about the path to market adoption.

What expectations do you have for the participants and for upCAT?
Curiosity. I am happy if the participants bring concrete questions about commercialization and the market entry of their product.

Were you already active in the field of business startups before?
Yes, I was responsible for commercialization in the “Global Business Incubator” at SAP. Before that, I had my own startup from 2002 to 2006.

Where do you see challenges on the way to becoming a successful business?
It often takes a pretty long time to get to the first paying customers. In order to pass this hard time, you need a concept.

What advice can you give to the young startup teams?   

  1. Founders should take the B2B area into account. In my experience, chances for success are higher there. Consumer goods business is often a winner-takes- all deal and there can only be very few winners.
  2. Gather experience in the branch first and build up a network. You can do this, for instance, by working in a different business for two or three years after your studies.

Do you have a plan?

At the beginning of each founding of a company you need a plan to implement your business idea into reality – commonly known as the business plan.

A business plan can be used for various purposes, e. g., to obtain new financing, to convince a cooperation or capital partners, or to prepare investment decisions on the fly, and to plan the associated measures. The addressees of the business plan can be very different. Therefore, a business plan has to be adapted to the purpose or the addressee. The business plan often serves as a basis for future business success!

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