In a paradox of needing money to make money, some turn to a venture capital company for that financial jump-start.

Located in the Dundee neighborhood in Omaha, Neb., Dundee Venture Capital (Dundee VC) works to invest in e-commerce and web service start-ups across the country. Mark Hasebroock started the company in 2011, and uses capital to help these early-stage companies get off the ground.

“We look for innovative ideas and passionate people that challenge the status quo and solve a problem,” Hasebroock said.

By narrowing the prospective investments to e-commerce and Internet service companies, Hasebroock can stay focused on an area that is familiar to him. He has a wide array of business experience under his belt, most recently in co-founding several online companies.

“I think it is a great time to start these types of businesses and don’t see an end to the creativity and demand for new ideas,” Hasebroock said. “Every day there is a new opportunity to create a unique business. I like niches that get ignored by the market.”

To what niches is Dundee VC paying attention? Hasebroock looks for entrepreneurs who believe strongly in their business and “bet it all that this business is the next big thing.” People who are “communicators that can tell the story over and over” and “visionaries that see a problem, recognize they can solve it and lead the market, quickly” are also good fits with Dundee VC.

“We ask four pretty straightforward questions,” Hasebroock said. “What’s the problem you are solving? What is the market opportunity? Why will you and your team win? Will you quit your job to make it happen?

“The good fits stand out. The poor fits as well.”

Dundee VC invests up to $500,000 in a start-up company, but it provides more than just capital to the entrepreneurs taken under its wing. Business owners can tap into valuable resources and knowledge from Hasebroock’s experiences.

Mark Hasebroock, Dundee Venture Capital

“We can help steer and advise to avoid many of the pitfalls they may face. Some may be obvious and others may not,” Hasebroock said. “Establishing solid reporting and analysis, for example, will help build a meaningful dashboard so the founders can really determine if they are succeeding or failing. Sometimes this is ignored in the early days.”

How hands-on Dundee VC is with a company depends greatly on that start-up’s situation. Though Hasebroock prefers not to “invest and then check in each quarter,” his level of involvement with a start-up varies based on what stage the business is in when Dundee VC steps in to help with financing.

This is true with the companies in which Dundee VC is currently investing. With Graphic.ly, a website devoted to authors and fans of comic books and graphic novels, Hasebroock works on the company’s board, but is mostly in the background for the company’s 12-month plan. The entrepreneurs are more experienced, leaving Hasebroock to be in a “what-if, high-level type role.”

A second company, MindMixer, serves as a tool for community participation and communication. The website is often used by town leaders and elected officials.

Hasebroock explained that Dundee VC started helping MindMixer in the beginning stages of the business. He helped with the company’s direction for the first six months, guiding the business owners so they did not take on too much too soon.

“The founders were very energetic, smart and passionate but had not started a business before,” Hasebroock said. “I provide daily involvement with them as it is a high-growth business that can also grow out of control if we all don’t manage the day-to-day expectations with the six- and 12-month plan.”

Dundee VC also invests in Tripleseat, a resource available to managers and owners of restaurants, banquet halls and other places. The website helps manage sales and event information.

Before Dundee VC, Hasebroock worked in a broad range of jobs. While in college at the University of Nebraska-Lincoln, he sold moccasins for spring break money, and later he had a small business selling popcorn to grocery stores. He also worked in commercial and investment banking. Hasebroock has co-founded several online companies, giftcertificates.com and hayneedle.

These years of experience led Hasebroock to the idea of starting Dundee VC.

“I always thought if I could be in a position to help provide the start-up/seed capital and advice to start-ups then I would love to do that. It seems to be a void in this area for this niche,” Hasebroock said. “I was a commercial banker loaning money, investment banker investing and raising money, (and) founder of start-ups. Bringing it full circle felt right.”

Dundee VC holds a unique stance in its focus on e-commerce and Internet service companies, and in its “lack of red tape and bureaucracy,” Hasebroock said. Over the next five years, he has a goal of helping finance 10 companies.

In recent years, Hasebroock has seen certain trends within the realm of Internet companies. The price of the technology needed to start and maintain a business is about one-third less than what it was three years ago. The time it takes for a business owner to get his or her business going has also decreased.

“An idea can be hatched, tested and live in a matter of days. The mobile trend will only continue to grow and any e-commerce merchant that does not have a shoppable mobile site will be lost,” Hasebroock said.

From Hasebroock’s perspective, it is an ideal time and place for entrepreneurs to start their businesses. Often the biggest obstacle they face is fear.

Hasebroock reminds entrepreneurs that they are not alone.

“Odds are there are a few folks that have experienced and gone through what any other start-up is about to go through,” Hasebroock said. “Don’t let fear keep you from your dream. It can actually be a great motivator.”

“While we may invest, we also want to make sure founders know there is also advice and support,” Hasebroock said of Dundee VC. “We’ve been there and know what you are going through. And we think we can help create a road map for you to succeed.”

Watch for additional articles over the next month on our new series about franchising.

When Don and Linda Eckles opened the first Scooter’s Coffeehouse in 1998 in Bellevue, Neb., they weren’t just offering specialty coffee and warm service to their drive-thru customers. They were establishing a brand that the company would later build upon to create a franchise.

Over the next several years, the Eckleses opened additional locations in the Omaha area. In 2001, the company made the move to franchise the business. Scooter’s, owned by Omaha-based Boundless Enterprises, currently has more than 90 stores in seven states and continues to grow.

Before expanding Scooter’s Coffeehouse into a franchise, the Eckleses worked to develop a successful system. They focused on establishing coffeehouses in good locations, creating quality beverages, maintaining fast service and clean facilities and hiring friendly employees.

Scooter’s can attribute much of its success to the company’s structure. Besides striving to make “better drinks than anyone else,” said Todd Graeve, CFO and director of business development for Scooter’s Coffeehouse and Boundless Enterprises, great customer service and speed of service also play key roles.

By first establishing what Scooter’s Coffeehouse stood for and what the company wanted to achieve, the company had set the groundwork for future stores to build upon. The Scooter’s slogan, “Amazing people, serving amazing drinks, amazingly fast,” serves as a reminder of the company’s values for all franchised stores. When it made the move to franchise, various other parameters also had to be in place to ensure consistency between stores.

One such factor is a Franchise Disclosure Document (FDD). The franchisor is required to furnish this to the prospective franchisee. The FDD contains information on the company’s history, past ownership and costs for opening a franchise. It also includes the franchise agreement and other contracts between the franchisor and franchisee. The franchisor should seek legal guidance when preparing a FDD and presenting it to prospective franchisees.

According to Graeve, before moving to franchise, business owners need to ask themselves if they “have something to offer that is proven and offers potential future franchisees opportunity for success.” For Scooter’s, drive-thru specialty coffee was a successful concept in the Omaha area, he explained.

Franchising is one option for businesses looking to expand and develop a company’s brand quickly. A company can also seek out investors and open several corporately owned stores with the capital.

Graeve said that of the 90 Scooter’s locations, Boundless Enterprises corporately owns 30 stores. Although the majority of its stores are run by franchisees, Scooter’s is not “exclusively franchising,” Graeve explained.

“In addition to offering franchise opportunities regionally and nationally, Scooter’s future expansion plans include the development of more corporately owned stores,” Graeve said.

Some positive aspects that Graeve sees in moving Scooter’s to a franchise model were the development of brand equity and establishment of economies of scale. For company owners, expanding the brand concept to other stores makes the company’s core values and product available to a wider audience. Franchising also offers economies of scale, allowing the franchisor to buy products in larger quantities at a better rate.

Though companies like Scooter’s can have a strong structure in place for the business and its brand, some business owners can still make a mistake when moving to franchising.

“Business people seeking to franchise their concept may not completely understand the responsibility (the company) must absorb when supporting future franchisees,” Graeve said.

168th & Dodge in Omaha - Scooter's Drive-Thru Kiosk

“A company may have a quality concept that is intriguing to prospective franchisees, but if the franchisor does not take the time to develop a support model or clearly understand how it will couple its business concept with excellent support systems, he or she reduces greatly the chance of success and sustainability as a franchised company.”

Franchisors are not only responsible for quality control of service and the product, but also for helping the franchisees be successful business people, Graeve explained. In the same way that a company needs strong presence, quality of product and excellence in service to create a successful business, a support system is critical for the success of a franchisee.

Establishing this may involve hiring support staff within the company to assist the franchisees. For Scooter’s, it included figuring out where franchisees would buy coffee and other supplies. The cost of building this support network, in addition to legal fees associated with drafting the FDD, are some costs a business owner may face when looking to franchise his or her business.

Business owners need to take into consideration how to protect their brand when franchising their company. Scooter’s takes this concept seriously when looking to offer someone a franchise store.

“You must carefully consider who you want to represent your brand,” Graeve said. “You need to set parameters and be selective when awarding a franchise.”

Without considering this, a company could run the risk of having poorly run stores. For Scooter’s, a franchisee needs to have business experience or applicable past career experience, financial strength and business compatibility.

“When making a decision to move forward on franchising your business, know that the people who are awarded a future franchise will have great impact on a company’s long-term chances of success,” Graeve said.

The success of an individual franchise store doesn’t just affect the company. For a franchisee, a well-known brand with an established presence in the market may offer a greater chance of success in running a business. Franchisees working under the brand name expect quality franchisees at other store locations who positively influence the brand name.

Scooter’s works to maintain its business concept and franchisor support system while opening stores with five-star franchisees behind the counters. The combination of these efforts increases the possibility that each store is run well, and in a way that positively reflects the brand under which the franchisees are working.

Watch for additional articles over the next month on our new series about franchising.

Ryan Zink and Cory Wiedel of Omaha were operating a GNC franchise when a career-altering revelation changed everything. Success in the nutritional supplement business, they realized, would be achieved by offering much more than just products.

“We had come up with a different mousetrap to success,” Zink said.

Ryan Zink

So Zink and Wiedel parted ways with GNC and started Complete Nutrition in 2005 with six corporately owned stores in Omaha, Lincoln and Council Bluffs. Their “mousetrap” included education about diet, exercise and nutrition in addition to selling the nutritional supplements that would help customers achieve their health and fitness goals. Zink calls adding consulting to nutritional supplement sales the “GNC-Jenny Craig” model, referring to the widely popular diet and health consulting business. Close customer relationships and outstanding customer service add value that other supplement companies don’t offer, Zink said.

Then in 2008, Zink and Wiedel decided that offering Complete Nutrition franchises would be the best route to helping their established business grow.

By January 2010, 15 franchises had opened. Nearly two years later, that number has skyrocketed to 134 stores nationwide. By 2020, Zink and Wiedel plan to have a $1 billion company on their hands.

The franchisees they’ve attracted tend to be personal trainers and those with a background in exercise science who want to translate their passion into a business.

“We carry fewer [products] than GNC, but we provide much more information about how to create solutions so customers can reach their goals,” Zink explained. “We’re successful because people want more than just products; they are looking for answers.”

Services offered include one-on-one diet and exercise consultation, customized personalized solutions and more than 200 exclusive products. Helping customers track progress toward goals is key in the Complete Nutrition business model, Zink said.

“We want to be customers’ consulting partner in ‘life change,’” he said.

Cory Wiedel

Why are entrepreneurs buying Complete Nutrition franchises? Quite simply, the stores are producing good economic results. The growth has been dramatic, but controlled, Zink said.

“We actually froze franchise sales in April this year, which is practically unheard of, so we can digest what we have,” Zink said. “We wanted to ensure we provided adequate support for what we already have.”

The business model has produced happy customers, Zink said. Complete Nutrition’s Net Promoter Score, a popular customer loyalty metric, rates as “best in class.”

Zink said Complete Nutrition’s keys to franchising success can apply to other business models seeking to franchise. Here is his advice:

• Understand your competitive advantage. Quite simply, what does your business offer that your competitors don’t? Build and enhance these advantages to differentiate your company in the marketplace.
• Have enough money! You need great financial forecasting and understanding of your “competitive drivers,” another name for how you make money. This helps you know where to focus to keep your edge over competitors.
• Ensure you have great franchise partners. Don’t just let anyone with a “heartbeat and a checkbook” in the door to buy a franchise. These are “bad profits.” Get with people who have passion, who are good businesspeople and who truly understand the business they want to join.
• Grow at a place you can control. “Don’t grow so fast that you can’t support the system,” Zink said. That’s why Complete Nutrition put the temporary new franchise freeze in place. Company leadership wants to make sure it can adequately support existing franchises before adding more.
• Consult with franchisees when making decisions. “I definitely realized that franchisees are an essential part of the decision-making process,” Zink said. “They are on the front lines, so they know best. If you can’t win their heads and hearts, it eventually kills the relationship.”

With a combined background in finance and retail, Mike Ewoldt reminisces that even though his brother initially spotted the opportunity for a fitness store in Omaha, both brothers were essentially propelled toward the start-up due to a deep sense of frustration with their current jobs. “I said to Jim, let’s just do it. And on the opposite end of the phone there was dead silence. Now he had to make a commitment,” laughed Ewoldt. He added, “And I remember saying, ‘Jim, are you still there?’ And so he eventually said yes, and basically from the November of 1993 until February 1994, we went from concept to opening and finance in basically four months.”

However, everything was not as effortless as making the decision to be business owners. For a start, there was the fact that even though the Ewodlt brothers were willing to contribute 40 percent by way of their savings toward a business loan, they were rejected by two banks before a third agreed to provide them with the remaining 60 percent via a SBA approved bank loan. When asked whether they did anything differently to garner the loan, Mike Ewoldt said it was the combination of his MBA degree along with a solid background in accounting and finance and his brother’s retail experience that ultimately led to success with the bank.

“You can’t go in and ask a bank for 100 percent financing. Where’s your skin in the game per say? And that’s how people get turned down right away. We kind of operated under the 40-60 rule, if there is such a rule, and sure enough it worked out,” Ewoldt said.

Even then, Ewoldt emphatically argued that opening the doors on the first day was relatively easy compared to the first year of business. Calling it an “eye-opening experience” — and the year that they committed several business gaffes – Ewoldt said there were quite a few challenges in terms of creating a buzz when there was a serious shortage of funds, garnering customer attention and maintaining it, and most of all having faith in the business even as everything was coming apart at the seams.

“Money was coming in but not as fast we needed for it to come in. So, that first year I had stopped taking a paycheck, my wife was supporting us and Jim actually went and worked at a fitness store for the winter. And all we had was that one employee,” Ewoldt said. “On Dec. 23, 1994 — I will never forget this — two days before Christmas, I had watched (our only employee) Jerry make a sale, and I walked out and asked him how much it was and he said $80, and I went back and wrote a check for $75. And so you think, is this really what I want to do?”

Describing this as one of the most critical periods of their business, Mike Ewoldt said it was their sheer belief in the business and continued efforts that eventually paved much of their way to success. “I told the gang in January of 1995 that we needed to do $15,000 of cash. And then I said for February we needed to do like $18,000. Well, when February came around, track season kicked in. And so we got all the coaches and then our business took off. In a matter of two months we were sitting with five bucks in our bank account, and two months later things were rolling finally,” Ewoldt said.

Additionally, the co-founders developed a proven method of improving business by continually organizing races and networking with cross-country coaches, podiatrists and physical therapists. “It’s just not talking about the business, and saying, ‘Hey! Why don’t you try a peak performance shoe?’ You need to extend that to a 15- or 20-minute conversation over dinner sometime. And we have to do a good enough job for customers to act as our marketing team and actually tell others that you gotta go here,” Mike Ewoldt said. He said one of the primary ways Peak Performance retains its edge over competitors is by internalizing the principle of customer relations.

“It doesn’t matter whether we sell shoes, financial tools, or for that matter boats. It doesn’t matter what [the business is about] … at the end of the day, it is about customer relationships,” Ewoldt said.

That — and to keep adapting wherever the track leads.

Nebraska entrepreneur Grant Stanley recently sat down with us to talk about his experience starting Contemporary Analysis and entrepreneurs in general.

Growing up in Mumbai, India, Savant could usually be found disassembling his toys – or for that matter the family radio and television – simply for the sake of understanding their inner workings.

“In retrospect, the minor cuts, scrapes and 240-volt shocks were worth the natural honing of my curiosity, as it helped me develop an intuitive approach to solving problems,” Savant said.

So it seems only natural that Savant has had a successful 12-year career as an enterprise software architect and consultant, and that he’s finally realized his longtime dream of starting his own company. Savant, a masters-program alumnus of the University of Nebraska-Lincoln, is owner and founder of e=mc² solutions, a custom IT solutions company.

For Savant, the software industry’s approach to providing after-the-fact reliability misunderstands the problem of software robustness. At e=mc², ultimate reliability and robustness are an implicit consequence of a scientific approach.

“Software development as a traditional computer science is lost,” Savant said. ”Typical software solutions are targeted toward making specific business processes better. And small, medium and even some large non-IT businesses don’t have avenues or specialists who can find solutions using a scientifically structured approach. Having a scientific approach using traditional computer science principles implicitly makes way for a highly robust and efficient system.”

And that is the core mission of this year-old company: To provide simple, elegant solutions that profoundly impact its clients.

“Physicists and mathematicians often use the simplicity and elegance of a solution as a barometer of its correctness,” Savant said. He strongly believes that complexity is a mere distraction for software developers today, as it leads most of them into believing that there are individual solutions for individual facets of the complex problem. “I am of the firm opinion that a simple solution will present itself by unifying all facets of the complexity. This is the founding principle of my company, which has played a role in its name as well.”

e=mc² solutions currently has one primary client that is overhauling its logistics system and a few other clients that utilize the company’s research and development services. Savant is also in the process of building an in-house tool suite that will drastically reduce software development time and make custom software available to all sizes of companies. Talking about the challenges of developing this tool suite, Savant said, “The biggest difficulty is allocating time to this project in addition to the workload of clients.”

Nevertheless, Savant plans to revolutionize the IT industry by delivering efficient, complete solutions in less time.

His advice to aspiring entrepreneurs is to take risks and go forth with confidence even if it means following a vision that seems at odds with the industry.

“From my own personal experience over the past year I have found working for my own company extremely gratifying. In fact, I now wonder why I didn’t take the plunge earlier,” Savant said. ”Having my own company has helped me to not only set goals for my business, but to finally have the opportunity to fully realize  my vision and a lifelong dream.”

He added that one of the greatest benefits of having one’s own business is the ability to decide how to treat one’s customers, with every decision ultimately impacting the success of the company.

“The road is rarely easy, but the journey is always satisfying if you have the passion,” he said. “And no matter what you do, always keep it simple and elegant.”

When Diaz came to the United States from Monterrey, Mexico, 15 years ago, she spoke only Spanish and worked nights with an office cleaning service and some time at a few local manufacturing plants. One night she saw a flyer on the door, written in Spanish, which said there was a free micro-business training program through Catholic Charities. The class piqued her interest so she started learning to speak English through classes at Bellevue University during the day. Then the business classes from Catholic Charities helped set her off in the right direction toward her dream.

Diaz was also fortunate to go through the mentorship program at the Gallup Organization, where she learned how to take advantage of her own strengths and not worry about her weaknesses. “You don’t know what you can do till someone helps you see your skills,” she said. ”I now see people around me for their strengths and take advantage of those strengths so things seem easier now. I tried all by myself for a while and almost quit. You have to ask around and see what others have experienced and know.”

The last two years, Diaz has received a lot of exposure by participating in Omaha Fashion Week. She was even featured on the cover of Metro Magazine after last year’s Omaha Fashion Week. This has allowed her to be involved in the next Miami International Fashion Week.

Based out of her home in Omaha, Diaz now focuses on creative designing, finding materials, making patterns and samples, and marketing and sales. While she and her family wait for the production line, they are currently working on the catalog and sample packages to send to boutiques nationwide in hopes they will send in their orders soon. The production line is based at her family’s factory back in Mexico, although she hopes to move it back to Omaha soon.

In the meantime, this import/export business presented a challenge, as Diaz had to learn and maneuver through the Mexican and United States governmental rules. For example, Mexico does not allow imports of anything made in China. There is even a certificate required for any material coming in to verify where the materials have come from before they are allowed across the border in to Mexico.

“Since I started sewing I have thought of doing a line” and 25 years later, Diaz is excited to see her first line of 5,000 pieces go through full production and then become available in stores in a few months. “I hope the orders are coming soon,” she said. Her advice to others: “Keep trying over and over till you get it… and you will! Work hard and have people to help you.” With a very supportive son and husband, Yolanda has spent the last 15 years building her dream.

Proxibid was one of three companies that presented on a panel about business model innovations in information technology at the 2011 Nebraska Research and Innovation Conference. The business model that they had to create was one of a marketplace rather than just a live auction platform. This model will continue to evolve for them with 2012 being a very big year with changes and growth.

One of the things Joe Petsick, co-founder and CFO of Proxibid, talked about was the difficulty in running a startup that has a disruptive technology that changes an entire industry. Early on, Proxibid was forced to make a lot of big decisions and the industry was looking to the company for answers. Petsick called this “paralysis by analysis.” This was a major hurdle for Proxibid, but the company got over it by hiring a CEO who was experienced and could answer hard questions.

At Proxibid, one of the most important business objectives is to ensure continued innovation — and that’s a process that involves everyone. From the bottom to the top, all employees are allowed to present problems and drive answers.

Listen to this informative talk by Joe Petsick and also be sure to check out two other talks by Matthew Wegener of ISoft Data Systems and the Turbine Flats Project, and Paul Eurek of Xpanxion.

Innovation has been at the forefront in Nebraska with the new Talent and Innovation Initiative and many other objectives, both public and private. The need to foster innovation in key industries has taken hold as a clear way for Nebraska to grow its economy and provide opportunities for those living here.

One of those key areas is information sciences which is a wide ranging industry that touches everything from agriculture to energy. Most all industries are successful when a strong emphasis on information sciences is implemented. It is this need that has brought together the Nebraska Research and Innovation Conference (NRIC) to focus on information sciences for 2011.

“This year’s topic, information sciences, is both exciting and relevant,” said James Linder, M.D., senior associate to the president for innovation and economic competitiveness for the University of Nebraska. “Information technologies are perhaps the most powerful force transforming the world in the 21st century. We see examples of political changes being driven by the ability to communicate; businesses have access to human talent and markets throughout the world; and education can be delivered without the barrier of the classroom.”

The conference is put on by the University of Nebraska and Nebraska’s EPSCoR office and fueled by the need to get a wide variety of people together to exchange ideas, hear distinguished speakers and learn about the newest technologies out there. Linder said, “The five tracts of the conference – bioinformatics, cybersecurity, modeling and simulation, software engineering and sustainable environments offer relevant information to business professionals, academic scientists, IT professionals and engineers.”

One of the main portions of the morning session will highlight three Nebraska entrepreneurs in a panel discussion titled Business Model Innovations in Information Technology. The panel includes Paul Eurek, CEO and Chairman of Xpanxion, Joe Petsick, Co-founder and CFO of Proxibid, and Matthew Wegener, Founder, President and CEO of Isoft Data Systems and President of the Turbine Flats Project.

Keynote speakers include Dr. Jacqueline Henningsen, US Air Force and Lynden Tennison of Union Pacific discussing the capabilities, challenges and opportunities afforded by information sciences. Joining them as the lunch speaker is US Congressman Lee Terry.

One unique portion of the conference is the poster session, in which Nebraska businesses are invited and encouraged to bring a display.

“We anticipate that the conference attendees will learn about new technologies, and develop professional connections that can help them better implement information sciences in their university or business,” Linder said.

Registration for the NRIC is free but required by the Sept. 19th, 20011 deadline. To register and learn more about all of the sessions and speakers, visit the conference web site at http://nric.nebraska.edu.

2011 Nebraska Summit on Entrepreneurship

Phenomblue: Finding Partners
Joe Olsen, CEO, Director of Strategy and Innovation at Phenomblue, an industry leading interactive brand experience agency.