Entrepreneurial

U.S. program helps African entrepreneurs

Ronald Mutebi can now do in three months what might have taken him a year. With his $100,000 share of a grant to benefit Africa, the entrepreneur will soon be sending solar ovens to his native Uganda.

Mutebi obtained exclusive Ugandan rights to market the units from Illinois-based maker Sun Ovens International. His goal is to reduce the country’s dependence on wood and agricultural waste products for cooking fuel.

Mutebi was one of 14 African American entrepreneurs, selected from a group of 58 finalists and more than 700 applicants, awarded just under $1.4 million in total grants at last week’s inaugural African Diaspora Marketplace (ADM) in Washington, DC. The ADM is a joint public-private initiative on behalf of the United States Agency for International Development (USAID) and Western Union, aimed at boosting employment in sub-Saharan Africa.

According to USAID data, there are more than 1.4 million African immigrants in the United States, many of whom are entrepreneurs who operate small businesses in their native countries and send money back to their homelands. In 2008 an estimated $10 billion in remittance flowed back to sub-Saharan Africa from U.S.-based African diaspora members, according to USAID.

Anne McCarthy, Western Union’s Executive Vice President of Corporate Affairs, said the process was started 18 months ago after a conversation between her company and USAID. McCarthy said ADM was inspired by Western Union’s involvement in another collaboration – the “4 + 1″ program – with the Mexican government and U.S.-based Mexican migrant associations that provided joint funding to businesses that had “the best chance to create employment and economic growth in key areas.” McCarthy said it created a couple thousand jobs.

Small Talk: Parsing Geithner’s speech to small business

It appears the magic number for American small businesses is 10, as in the sudden urgency to help smaller companies after the U.S. unemployment rate jumped over 10 percent last month for the first time in a quarter century. After a year with Wall Street at the top of everyone’s agenda, Main Street is now taking center stage.

Suddenly new lending programs are being announced, town halls are hastily being arranged and political heavyweights from across the financial and ideological spectrums are falling over themselves to propose their plans for how to get small businesses back on track and hiring.

Over the past month, everyone from President Obama, to House Speaker Nancy Pelosi, to Federal Reserve Chairman Ben Bernanke and to billionaire investor Warren Buffett have addressed the issue. Yesterday was Treasury Secretary Tim Geithner’s kick at the can (watch the video of his speech here), when he chaired a forum on small business financing with FDIC head Sheila Bair and SBA chief Karen Mills.

Small Talk: Elephants and entrepreneurs

Mark Suster’s blog – “Both Sides of the Table” – has become a hotspot for people seeking an insider’s glimpse into the world of venture capital investing.

This week Suster wrote about the things in entrepreneur pitches that give VCs pause when considering whether or not to invest. Suster likens it to the elephant-in-the-room adage, more specifically: “those things that the VC would automatically be thinking about when you’re speaking but he/she may not immediately ask you about either for legal reasons or out of courtesy.”

Suster’s blog goes on to list some real-life examples of pitches he’s heard with Elephant-sized problems, such as the founder is no longer with the company or having Google as a prime competitor. Suster advises entrepreneurs to deal with their issues before they seek funding, as they will inevitably be addressed in their meetings with VCs. Suster says it’s better to be pre-emptive in this regard.

VIDEO: New class of startup aims for quick revenues

peHub‘s Dan Primack spoke with Reuters about a new kind of startup that’s designed to develop an idea and then be snapped up by a larger company.

As Primack explains, these startups differ from the traditional sort in that they tend to be interested in creating targeted web services or applications rather than conventional companies with longer-term growth ambitions.

“The hope for these companies isn’t to create the next Google or the next Cisco, the goal is to create a little application that Google or Cisco or Facebook or Twitter wants and then will purchase,” he explains.

Free labor could pose problems for companies

USA-ECONOMY/As any small business owner knows, getting a new company off the ground requires a lot of work. And for those entrepreneurs not enamored with the idea of running their company as a one-person show, hiring employees is among the first steps along the way to actually making it happen.

Unfortunately, many of the same startups burdened with so much work also suffer from a limited supply of funds in their early days, meaning they can find it tough to afford the number of employees they need.

But with the ranks of unemployed in the United States hovering at its highest rate in more than two decades, some small firms have found a rather unusual solution to this dilemma  – people willing to work for free. Employment agencies such as Jobnob.com and PeopleConnect have done their part in connecting unemployed individuals willing to work without payment to small firms in need of a helping hand.

SBA announces new ARC loan guidelines

Today the U.S. Small Business Administration announced new lender guidelines for the America’s Recovery Capital (ARC) loan program it unveiled last month.

According to the SBA release, the ARC program provides emergency funds, in the forms of deferred loans, of up to $35,000 to “viable small businesses suffering immediate financial hardship.” These loans are not provided directly by the SBA, but through SBA-backed lenders – mostly smaller or community banks – and are 100 percent guaranteed by the government and have no lender fees attached.

The SBA defines a “viable” business as an “established, for-profit business with evidence of profitability or positive cash flow in at least one of the past two years.” The term “immediate financial hardship” is subsequently defined by the SBA as “evidence to show a change in the financial condition such as declining sales, frozen credit lines, difficulty meeting payroll, paying rent, difficulty making loan payments or perhaps something else.”

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