David Barbash on the Key Factors for a Successful Start-Up
With many cities around the world trying to replicate the success of Silicon Valley, I've spoken with David Barbash, an expert on start-ups, on his experiences of how Boston has done things, and the crucial things needed for a successful start-up.
David is a Partner and Co-Chair of the Corporate Department at Posternak Blankstein & Lund, LLP. His diverse practice includes representing public and private companies in mergers and acquisitions, public and private financings, loan transactions, and licensing and strategic alliances, as well as representing early stage companies.
A lot of cities are trying to replicate Silicon Valley, not least my own city of London. What do you think are the keys for cities to lure or encourage start-ups to them?
A key for any city to attract entrepreneurs is first to be the home of colleges and universities. This is where the initial research behind so many companies begins. Upon graduation, these entrepreneurial individuals will look to settle in a city where they can grow and develop their companies based on the research they began in the classroom. They’ll also look for a city that provides governmental support in the form of grants and the like, as well as access to well-seasoned entrepreneurs and professionals to provide the guidance and support necessary to maneuver the challenging road towards success.
With the web making communication virtual, are clusters as common as they once were?
I think business clusters, meaning organizations that house and support young companies and business plan competitions and provide a forum for these companies to hone their presentation skills and pitches for potential investors, continue to play a major role in company development. Participating entrepreneurs not only meet mentors, professionals and potential funding sources, but they also develop camaraderie with other entrepreneurs at the same stage of development to whom they can look for guidance and support.
What are the growth areas at the moment?
Life science and renewable energy continue to be major growth areas. In addition, we have witnessed growth recently in robotics, big data and mobile data security.
At what stage do you think outside investment should be explored?
The decision for an early stage company to seek funding is an entirely individual decision based on a number of factors that differ for each company. I believe, however, that in most instances an early stage company will have only one opportunity to go before a potential investor to pitch its business plan, and as such, must make the most of that opportunity. To do so, the company’s leadership must understand that an investor will only seriously consider a company with a well-developed business plan that can demonstrate acceptance in the market place and which is managed by a solid management team. Until a company can “check the box” on these items, I encourage early stage clients to focus on growing the business themselves before looking for outside financing.Continued on the next page