i believe the reason most small business owners view marketing & advertising efforts as mostly ineffective and a huge a waste of money is because they suck at marketing. based on 10+ years of anecdotal experience, here's my list of more →
a wide variety. what matters most is your organizaton's age and size, because our process creates the greatest impact for organizations between 1-5 years old with annual revenues ranging between $150,000 – $2,500,000.
for lack of a better label, the next most important factor is "attitude." we only want to work with business owners who are serious about investing in their own business and are willing to commit to our process. because "attitude" is a huge factor, we do consider working with the right kind of small business start-up.
the industry you’re in, and even whether your profit vs. non-profit, is pretty much irrelevant to our process.
each of our ZENCubate programs (virtual, one-on-one, and team) has its roots in the business model our firm refined since beginning operations in 2004. in January 2012 we launched these services as “beta programs,” meaning our initial efforts will be limited to 20 organizations across all 3 programs.
10 companies will be selected to participate in team ZENCubate, 5 for the one-on-one program, and 5 for the virtual program. though the application & selection process varies across the programs, we ultimately evaluate businesses and their owner(s) across 4 key criteria :: opportunity, passion, commitment and integrity. how we measure these is our little secret.
here's a rough outline ::
during the active phase of our work (between 3-18 months depending upon the specific program), companies pay a nominal monthly fee plus a specified percentage of any increase in revenues. to assure affordability, total fees are always capped at a specific percentage of total revenues.
upon completion of project initiatives, companies start paying a higher percentage of their increase in top-line revenues (typically between 15 – 25% of the increase and never more than 5-10% of gross revenue). payments are calculated and debited monthly. if there’s no increase in top-line revenues (measured from the start of the program), then no payments are triggered.
because repayment amounts are always limited to a reasonable percentage to overall revenues, companies are assured a comfortable level of affordability. with the one-on-one and team ZENCubate programs, we may ask for other considerations depending upon the level of risk involved, but this general framework is what most participating companies can expect.
no. when we structure each agreement, we set a cap on the total amount of payments, total time period for payments, and / or some other option (including early buy-outs).
yes and no.
first and foremost, our portfolio companies are paying for much more than the cost of financing certain services -- they're buying into a process designed to minimize risk and maximize results.
second, a large number of portfolio companies (and their owners) are unlikely to qualify for standard financing. and if they do, you can bet your @$$ there will be an absolute obligation to repay the full amount of funds borrowed regardless of how well their business performs. and don't forget about the personal guarantee that also will have to be made. a business gets none of these strings with ZENCubate.
finally, we (and our expert investors in the case of team ZENCubate) are assuming a lot of risk under this model. commanding a potentially higher rate of return in exchange is simply fair.
at the end of the day, nobody's arm is twisted under this program -- if a company doesn't like the arrangement or thinks they can do better independently, then more power to them.
though ZENCubate is unique, there are other programs and services that may be of value to your particular needs. we will be happy to refer you to other resources or discuss what you need to do to better position yourself to participate in future ZENCubate offerings.