John Katzman, founder, chairman and CEO of The Princeton Review, spoke on the topic of venture capitalism last Friday at this year’s third annual Entrepreneurship and Private Equity Symposium in Sage Hall.
The speech was the keynote of the event, which spanned the entire day and included speeches and panel discussions that dealt with various aspects of entrepreneurship and venture capitalism.
Many of the speakers and panelists were alumni of Cornell and the Johnson Gradate School of Management, including Kevin McGovern ’70, chair and CEO, McGovern Capital LLC; Daniel Simpkins ’80, president and CEO, Hillcrest Communications Inc. and Ralph Terkowitz ’71, CIO of the Washington Post Company.
The symposium was sponsored by the Cornell Entrepreneurship and Personal Enterprise Program (EPE) and the Cornell Entrepreneurship Network (CEN).
One of the planners of the symposium, Armen Vartanian ’03, said that the goals of the event were “to educate the Cornell and Johnson [School] communities about venture capitalism and equity,” and also to network.
One of the key points that Katzman emphasized in his speech was that today’s economy is actually ideal for starting a venture. He said that even though capital is hard to come by and the markets are not nearly as strong as they were a few years ago, students are better prepared to start a company now rather than later because they are used to living sparsely.
“In terms of starting a company, do it now,” he said.
During his speech, Katzman recalled the “cliff jumping aspects” of starting a company in order to advise the next generation of entrepreneurs gathered at the symposium.
One insight he shared was that partnerships are “bad ideas” because they can complicate running a company and interfere with its vision. Another point he recalled from experience was the importance of good law advisors.
“Get a great lawyer. Pay too much. They make a huge difference,” he said.
Katzman emphasized that most businesses evolve, joking about his “rolling five-year plan” to sell his company.
Katzman also warned that “for small companies, advertising doesn’t work.” He credited his own company’s success to innovative strategic alliances, a concept he explained as trying to find “something you can do for a larger company.”
“The world is a risk game,” Katzman said.
In concluding his speech, Katzman said that you can make any mistake “except running out of cash, because then they take the ball away.”
The speech and the symposium met with considerable success.
“[Katzman] was obviously speaking from experience,” John Robbins ’79 said. “He had a pretty sobering view toward venture capitalism.”
“I think the [organizing] committee feels good. It went really well. I think the attendees got a lot out of it,” Vartanian said. His only regret was that there were few undergraduate attendees compared with the well-represented business school community.
Of Katzman’s speech, Vartanian said, “The people in the room stayed engaged and interested.”
Katzman rose to prominence in 1981 when, upon graduation from Princeton, he founded a company marketing an SAT preparatory program. The company tutors over 120,000 students a year, and also markets a series of books, videos and software.
Midday, during the symposium, the winners of the Business Idea Competition were announced. First place went to two graduate students in the hotel school, Anthony Dellamano ’03 and Mark Kuperman ’03, who call their venture Johnny Applestixs. Their business concept is a fast-food snack menu that will target malls and other high-traffic areas such as airports, stadiums and amusement parks.
Dellamano and Kuperman won $10,000 and 10 hours of free law consultation from the Albany Science and Technology Law Center.
James Edwards JGSM ’03, fund manager of BR Ventures: The Big Red Venture Fund, Cornells student-run venture capital program, said of the winners, “They had a really great, novel approach in a market that does not see much innovation.”
Archived article by Michael Margolis