What makes funding in an entrepreneurial environment a reality? It may not be the nearest Venture Capital funding source or a high profile venture center. Realizing the dream of starting the next great company is happening with amazing results through the entrepreneurship programs at Colorado universities. The University of Colorado–Denver Business School and the Bard Center for Entrepreneurship (with MBA level programs) are paving the way in the entrepreneurial community for prospective new ventures and giving fledgling companies a fighting chance through access to investors, prominent business leaders, advisor resources and business advocates.

Alexander (“Sandy”) Bracken, the executive director of the Bard Center, believes the key role of the center is to prepare the young entrepreneurs for the actual practice of entrepreneurship and to provide a direct link from the classroom to the start-up and development of companies. A primary benefit to the students, according to Bracken, is the Annual Business Plan Competition held each summer.

Each year, the competition has drawn an amazing number of credible students who prepare plans subject to rigorous requirements. The results? The winners may surprise you! It’s not about the best plan or the best presentation, or if a company looks like it can be positioned to get funding. It’s about the combination of all three.

The Bard Center is hosting this year’s competition at the Marriott City Center on June 15th. Mayor John Hickenlooper is scheduled to deliver the keynote. The competition has attracted hundreds of applicants, with only six finalists who will present business plans.

In the last two years, two very different companies secured the much sought after accreditation. Much to the credit of the Bard Center’s ongoing resources and involvement in these start-ups, they are each on their way to amazing things.

RevoPower, Inc.
Winner 2003

RevoPower is in the process of developing and commercializing a revolutionary motorized wheel for bicycles. The company was founded in 2003 by Steve Katsaros and John Richards. With fully operational prototypes, patents pending in 26 countries and imminent commercialization, the company appears to have spent the last two years in “progress mode.”

Like many start-ups, development lasts many years.The RevoPower product was conceived early on (in 1999). Now, Katsaros and Richards are focusing on the invention itself, with the last two years a serious full-time effort.

Fundraising efforts have proven fruitful. Beginning with the eminent self-funded opportunity for the first year, RevoPower was followed by one successful fundraising effort. “We are currently working on refinements to the product, which will make it compliant with regulatory agencies around the world, decrease the cost of production and bring the product to market in the next 12 months to two years,” says Katsaros. “We have been meeting our milestones and have successfully engaged with licensees.”

Although all good plans have hurdles, Katsaros says the last two years have seen a succession of engineering challenges, some of them quite considerable (proverbial “showstoppers”), but all have been overcome. According to Katsaros, these efforts have resulted in the production of several working prototypes, the latest of which is quite elegant. “Patience and persistence have been the main ingredients to bringing this incredible product to this stage of development,” says Katsaros.

The main objective of the Business Plan Competition is to encourage entrepreneurship. With RevoPower, the first competition (2002), may be accredited with fostering the entrepreneurial endeavor. Katsaros prepared and submitted a plan for the 2002 competition.Although the plan didn’t make the final cut, it was successful in providing the product concept with exposure. In mid 2002, Katsaros submitted the design to a competition in Design News Magazine and was awarded an Excellence in Engineering Award. This achievement was published and additionally posted on Slashdot.org. Hundreds of people emailed Katsaros, asking about availability of product, manufacturing rights, distribution rights, etc. One individual who contacted Katsaros was John Richards, who had just sold his company. Upon further reflection, Katsaros and Richards wouldn’t be working together on this if it weren’t for the very first business plan competition.

The creation of RevoPower occurred after many hours of telephone discussions and mutual due diligence. RevoPower was incorporated in on May 16, 2003.

So what is it? According to Katsaros, the key to the value in RevoPower’s technology is the “miniaturization” of the engine and gear train so that it fits within the narrow boundaries of the forks of a bicycle. “Prior to the RevoPower invention, all internal combustion engines on bicycles have involved some part of the motor or drive train extending outside the profile of the bike. In many instances, this has resulted in bulky, heavy, and very inelegant solutions. The RevoPower Wheel, on the other hand, is light, easy to install and can be retrofitted to almost any bicycle.”

Katsaros believes the selling point of the RevoPower Wheel lies in its advantage over and above other forms of motorized transportation, especially electric and gaspowered bicycles. “The RevoPower Wheel is light (12 pounds vs. an extra 50 pounds for electric); it can be recharged instantly, giving it a limitless range (vs. 4 hours charging for a 20-mile range); the RevoPowered bicycle can be ridden like a normal bicycle (others are too heavy, and seldom resemble a real bike underneath); its operation is completely natural and intuitive (vs. clunky rollers and chains with various pulleys and controls to operate); and best of all, it’s really cool (vs. looking like a nerd on your weird machine).” Getting the idea from concept to product seemed a more difficult task. “The first order of business was to refine the business plan,” says Katsaros. “It fit naturally with submitting it to the Bard Center for the 2003 Competition.Winning First Prize provided additional momentum through the generous donations and contacts. Most of the in-kind sponsors have been extremely helpful, and several individuals at the Bard Center have been very generous with their time and contacts.”

Companies that filter through the Bard Center range in all sizes and types. RevoPower proved to be an interesting and sizeable player in its market. “It is difficult to put an exact number on the size of our industry because we are creating a new market category by filling a void between two existing markets (bicycles and small motorcycles),” says Katsaros. “We know that 1.4 billion bicycles exist in the world; 5 million small motorcycles are in service in Italy alone, and a whole host of other statistics. We estimate that there is untapped demand for several million units of this product when delivered.”

According to Katsaros, growth is eminent. “Revo- Power has grown to three full-time men, assisted by two dogs (the machine shop mascots) and a whole host of outside organizations and consultants (as many as nine if you count them all).”

With growth comes more capital.“We have successfully raised money during a small round that closed mid 2004 – call it family and friends,” says Katsaros. “We have invested roughly $1M in the product to date.We are currently back in the market for a more substantial sum, approximately $5M, to get the product to market.”

The business plan competition did come with a monetary reward for First Place, but the bigger asset is the business connections, and access to investors and advisors that has proven extremely valuable. According to the Bard Center, its not about winning the competition that starts a company, its about the resources and longterm partnerships that the Bard Center structures for its students. Long term assistance is critical for any new company to succeed.

RevoPower expects to have a signed a licensing agreement with at least one confidential party on the manufacturing side before June. The future? Extremely bright.With the rising prices of gasoline and the continued urban congestion, RevoPower’s product solves problems. “We believe we have almost cracked the code for mobilizing developing countries,” says Katsaros. “With at least 200 MPG, our product is timely considering the current state of the world.”

Two years ago, RevoPower went from a company with a crude prototype, no money, and a vision for a product.Today it is a fully constituted corporation, with patents pending (imminent issue on the first), elegant prototypes, engineering advancements, a host of consultants and companies familiar with the product and committed to its completion. In addition, the feasibility of building the product has been verified by world class manufacturers, and the demand for the product has been validated through contact with the market. Overall, the progress has been impressive, but the journey is only half over.

MetroBoom
Winner 2004

MetroBoom, founded by Jung Park, is notably a premier style salon for men, providing a wide range of services and products in haircare, grooming and fashion. “Our customers can expect the latest hairstyle to complement their personality and lifestyle,” says Park. Lifestyle being the operative word. MetroBoom opened its first flagship salon on May 1st and timely for Denver’s growing progressive male market.

According to Park, what really differentiates MetroBoom from the competition, is its services and products in fashion. “We offer personal shoppers and fashion consultation services, as well as apparel and accessory products,” says Park. “Our customers can purchase clothes, jewelry, belts, caps and any other accessories to complete their look.”

“The idea for MetroBoom came from my own experience,” recalls Park. “When I moved to Denver from New York City in 2000, it was difficult for me to find a place to get a quality hair cut. I was looking for a place where I could get great service in a comfortable atmosphere and of course, at a reasonable price. As a consultant, helping companies build their brand image, it was important for me to maintain a certain professional appearance and up-to-date look. I eventually let my hair grow out so I wouldn’t have to worry about getting it cut.” Many a great idea is sparked out of necessity. “I had written the idea for MetroBoom in my notebook for ideas, where I record new ideas or interesting concepts I come across.

“I had written the business plan for MetroBoom in Dr. John Ruhnka’s business planning class at the Bard Center,” says Park, who had begun writing a business plan for a Customer Relationship Management system but had to switch gear in the middle of the semester when his partner fell through. “It took me about two months to research and write the plan for MetroBoom. It was a lot of work at a crazy pace.”

According to Park, raising the funds to start MetroBoom was the most difficult part of the entire process. “The start-up capital required and return on investment were too small for the venture capitalists and angel investors,” he says. “I had to turn to private investors, friends and family.”

MetroBoom is currently being funded by investments from a few private parties and Park’s own personal loans. “The challenge of funding has put me through emotional rollercoaster on daily basis,” says Park. “I thought of quitting and taking a corporate job often. However, the thought of passing up an opportunity of a lifetime, not to mention regretting it for the rest of my life, would put me right back on track. I guess if the journey was easy, the harvest at the end wouldn’t be as sweet.

“I have met so many great people in the last year since the business competition,” says Park. “The press I received from winning the competition and various networking events have been great sources for me to expand my network. I have met numerous vendors, partners, and customers. There were also many people who were willing to go above and beyond to lend a helping hand. They were more than generous in offering their service, expertise and advice at no charge. The support and enthusiasm I experienced were just incredible. Although there were few skeptics, the majority of entrepreneurs I have met were encouraging and supportive.

“On the first day of my management class, I remember my professor, Sarah Kovoor-Misra, telling the class that at the end of the day, ‘business is relationships.’ That’s has been the most rewarding part of this experience.”

According to Park, the competition opened many doors and introduced him to valuable resources. “I have found that the competition has an excellent reputation and credibility in the Denver business community. The in-kind sponsors offered generous amounts of complimentary service and advice. My in-kind sponsors, iSherpa and Kendall,Koenig and Oelsner PC, are still providing me with their expertise.”

Park’s industry is also sizeable.The hair care industry is estimated at $60 billion and the hair cutting industry was expected to top $40 billion last year.The male grooming industry is also steadily rising at $8 billion per year. Locally, there are more than 2,000 hair salons and barbershops operating in Metro Denver in 2004. According to Park, “It is for the most part a recession proof industry, as getting a haircut is a must-have and not a nice-tohave for most people.”

That said Park is planning to hire six full-time and three part-time stylists for the first year.According to his plan (and filling his niche), there will also be four to six massage therapists on staff. Park expects to manage the salon for the first year of operation, and by year two, he will hire a full-time manager to replace himself in an effort to focus his efforts on opening the second location and building the franchise model.

Park is a little more prepared than most start-up companies. Park has enough funding for the start-up costs and a few months of operating expenses. His plans are to raise additional funding as necessary. “The biggest challenge thus far has been funding,” says Park. Since MetroBoom’s start-up capital and return on investment were considered to be too small for the venture capitalists and angel investors, Park says it was difficult to raise funding. “Even SBA loans were tough to qualify due to lack of my personal assets. It truly is challenging to start a new business when all you have is an idea and enthusiasm.”

Of course, with all good ideas and an abundance of enthusiasm, there are surely mistakes to follow and lessons learned. “The only big mistake I have made thus far is not reserving the domain name for MetroBoom,” says Park. “In the midst of creating the plan and participating in the competition, registering the domain name completely escaped my mind. As I was trying to register the name the very next day after winning the competition, I found that someone had registered the domain name for MetroBoom only a few hours after the competition. Eventually, I was able to get the name transferred to me.” Park notes the Bard Center was instrumental in resolving the situation. “Never again will I let legal matters slip through my fingers.”

Park has big plans and a lot of advocates for his concept. In the next three to five years, Park plans to open the second and third MetroBoom locations. He anticipates the second location will be in Denver but the third will be out of state. Once all three locations are operating efficiently, Park plans to register MetroBoom with UFOC and offer a full franchise license.

Park firmly believes relationships are the key driver of all businesses.“It is especially true in this industry.Wordof- mouth is the most effective and widely practiced method of marketing in the hair industry. MetroBoom’s most valuable asset will be the relationship we create and nurture with our customers.Through quality, friendly and attentive service, combined with unique product offerings, we will strive to convert every customer into a lifetime MetroBoomer.”

The market advantage: the unique experience MetroBoom offers. “Currently, there isn’t any place where a man can go to get a quality haircut and purchase the latest in grooming, haircare, and fashion products. The in-salon experience will also differentiate MetroBoom.The MetroBoomers can expect to be pampered through attentive and friendly service, time after time,” says Park.