News & Events
(EDITOR’S NOTE: As mentioned in Tuesday’s feature article about the recent visit of the top leaders and others from Queen City Angels to Knoxville and the “Entrepreneurship Bootcamp” that the organization conducted, this is an article that summarizes advice offered to local entrepreneurs during the session.)
By Tom Ballard, Chief Alliance Officer, PYA
Scott Mindrum recalls the reason that he spent Valentine’s Day 1983 in Knoxville. He was a Bank Examiner with the Federal Deposit Insurance Corporation and here to help shutdown the banking empire of the Butcher brothers – Jake and C.H.
His most recent visit last week was more pleasant and more positive as he joined other members of Queen City Angels (QCA) to speak at the “Entrepreneurship Bootcamp” (see Tuesday’s teknovation.biz feature article here) and participate in follow-up meetings. At the Wednesday event, his topic was “Financial Statements for Entrepreneurs,” something that could have been very dry without the humor, sometimes self-deprecating that he used.
“I’m a CPA (Certified Public Accountant), but I don’t like details,” Mindrum explained. He spent a fair number of years in the profession including serving as Manager in the Entrepreneurial Services Group at Ernst & Young LLP before starting and exiting two different companies. His last – CRӓKN – is the all-in-one digital solution that’s transforming the death care industry that Mindrum sold earlier this year.
Now, as a former member of QCA and recipient of an investment in his most recent start-up, Mindrum is again helping the angel fund.
“There are really five important points about accounting that you need to understand,” he told the attendees. They are:
- “You are managing cashflow,” Mindrum said. “You have to know the sources and uses of your cash.”
- “You need to understand your balance sheet.”
- “You also have to secure a path to profitability.”
- He suggested that entrepreneurs think of accounting as another version of their communication process with investors.
- Finally, Mindrum said that “forecasting the future is a superpower. Most investors want a three- to five-year forecast.”
Using the acronym BON – it stands for back of the napkin, he reminded attendees that “investors want to see what you are planning. If you can’t tell your story on the back of a napkin, you are in trouble. Investors want both quantitative and qualitative information.”
He shared a real-life example of advice he received from Tony Shipley, QCA Chairman, President and Co-Founder, while raising capital for CRӓKN. When he presented his forecast and assumptions, Shipley simply responded, “Get sober.” That advice prompted Mindrum to describe the forecasting and assumption process as “iterative” and advising attendees to “have a simple way to illustrate your assumptions.”
He also said that “I always invest in the best lawyer, accountant and pilot to run the business.” And he modified the title of CEO from the traditional wording – Chief Executive Officer – to Cash Extraction Officer. Mindrum also credited that title to Shipley.
His final observation was also insightful. “When I hire people, I’m mostly hiring chemistry,” Mindrum said.