‘You have one minute to impress’ | Mighty Wig fields the hot seat
Siobian Jones is the latest founder to accept a moment in the hot seat at the Knoxville Entrepreneur Center's 'In the Room' series.
It’s nearing the end of another month, which means another installment of the ever-popular, and highly anticipated ‘In the Room’ series by the Knoxville Entrepreneur Center (KEC). This month’s topic was entity structure and Gera Grinberg led the conversation.
For some background, Grinberg has decades of experience working on high-level business growth as an executive and attorney. He’s helped negotiate dozens of deals with Fortune 100 companies, mega healthcare firms, and international media companies like Pixar, AT&T, and Kodak. During his career, he has managed mergers and acquisitions, totaling more than $1 trillion.
At the start of each monthly session, Grinberg welcomes a local entrepreneur into what he calls the “hot seat.” It’s essentially where the founder pitches their business and then gets hammered with questions for 10 minutes straight by Grinberg and other entrepreneurs in the room. Sounds fun, huh?
The whole thing is modeled after what it would be like to pitch to major investors – like Goldman Sachs.
“If you make it into a room with these people, you realistically have one minute to impress them,” Grinberg said.
Teknovation.biz detailed the previous hot seat participants, Primeaux and Farm Grub. This month, the willing participant was Siobian Jones, the Founder of The Mighty Wig (read teknovation.biz article here). She is no stranger to pitching. Jones was one of the finalists in last year’s ‘What’s the Big Idea’ pitch competition.
“Right now, I have a shop. But, I want to create an online platform where people can rent and sample a wig for two weeks before they decide to purchase it,” Jones said.
She asked for an investment of $500K to help support the engineering of a website and hiring for scale.
“So, is it just you?” Grinberg questioned.
“Yes, right now I do everything by myself,” she said.
When a solo founder comes to pitch a product to investors, the questions change. In the case of The Mighty Wig, there is no intellectual property (IP) or patent pending, so a lot is riding on Jones’ ability to continue working.
“They’re going to ask you about your health, your family, your background. Because you are buying someone’s brainpower and image if it’s a solo founder,” Grinberg said. “With all due respect, as an investor, I would blow up your image, and attach your name and story to every sale, so that I can make money even while you sleep.”
Jones fielded other questions in the hot seat with ease. She is dedicated to breaking beyond her brick-and-mortar in Knoxville to reach a broader audience.
Next month’s hot seat participant has not been revealed yet; however, it is rumored to be a deep-tech founder.
Grinberg continued the session with entity structures, building off of Jones’s structure as a solo founder, he explained there are two types of tax groups: an S Corporation and a C Corporation.
The S Corp is the easiest. It’s appropriate if there is one owner who is okay with being taxed as an individual. The downside is there is no protection for the founder.
As Grinberg puts it, “There is no veil to pierce.”
On the flip side, a C Corp is typically the more preferred entity for investors. It allows the business to be taxed at a corporate level, which allows for more flexibility in pay structures.
The good news is that an entity’s structure can be ever-evolving as the business. When the business grows and taxes, liabilities, and audit risks start to change, you can change your structure.
“You aren’t putting a ring on it, let’s put it that way,” Grinberg said.
The next ‘In the Room’ session will be on April 25 at 8 am.
Like what you've read?
Forward to a friend!