Business Incubator Series: Ross Sanders, Bizdom U – Detroit, Michigan and Cleveland, Ohio (Part 10)

By guest authors Irina Patterson and Praveen Karoshi

Ross: If entrepreneurs don’t take [equity investment] from us, then we ask for 33% ownership in the business because we are giving a ton of assistance to these businesses, I mean, all the training upfront was paid for by us, we paid living stipends, and we pay for the ongoing mentorship. That is all provided to the entrepreneurs.

We feel that a 33% ownership is fair for the amount of assistance we provide to the entrepreneurs.

Irina: What about those entrepreneurs who don’t launch the businesses while they are in the four-month program?

Ross: They learn how to launch a businesses. Some of them have gone to launch businesses outside of Bizdom U. There is some value there, but we don’t get any equity in those businesses.

Well, it depends, actually, on what business they launched. I mean, if they launched a business which was developed while they were at Bizdom U, then, yes, we would want an ownership in that business. But, if it is a completely separate business, that has nothing to do with Bizdom, U then we don’t.

Irina: What do you feel your limitations are?

Ross: I think, early on, the culture in city of Detroit was somewhat of a limitation because we have been so reliant on manufacturing for so long, so we had fewer resources for entrepreneurs, fewer places to go to get funding, fewer people thinking entrepreneurially.

You know, people were just thinking in terms of getting a job versus being an entrepreneur. I think the culture of the city of Detroit was so limiting back then, when we first started back in 2007.

Since then, however, there has been a lot progress. Like I said, this New Economy Initiative came along, and foundations decided to pool the money and support the economic development programs.

There are different incubators coming up in the city of Detroit, different programs to help retrain people who are being laid off in the automotive industry to be entrepreneurs, different training programs to convert auto motor suppliers to businesses. There are a lot more resources, a lot more programs.

Irina: Let me ask you about those 200 applications that you get. You accept only fifteen entrepreneurs. Do you offer anything to the remaining 185?

Ross: We always tell them that they can come back and visit Bizdom U if they want guidance on where else can they go. We provide guidance to different programs out there. We don’t really track those people, but we can help them get in touch with other programs that maybe more of a fit for them.

Irina: Thank you, Ross.

This segment is part 10 in the series : Business Incubator Series: Ross Sanders, Bizdom U - Detroit, Michigan and Cleveland, Ohio
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