Jim and Gail Greenwood for Northern New Mexico Connect

The next-best thing to free money is available through two federal programs for small businesses involved in technology and innovation.

The Small Business Innovation Research (SBIR) program – the larger of the two – grants money to small and startup businesses to develop products, technology or services that solve pressing problems in agriculture, defense, education, energy, transportation, the environment, space exploration, health and other areas. The Small Business Technology Transfer (STTR) program requires the business to collaborate with a nonprofit research laboratory or university that can share its technology or expertise with the innovator.

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Winners Pete Smiley and Araña Schulke with EDD Cabinet Secretary Fred Mondragon

Two seniors from East Mountain High School in Sandia Park won the high-school division of the fourth annual New Mexico Youth Entrepreneurship Network’s 2010 Youth Business Plan Competition with their plan to run a hot dog stand at their school to make up for its lack of a lunch program. In the summary of their business plan submitted for the competition, seniors Pete Smiley and Araña Schulke proposed to establish a hot dog stand called Pete’s Wieners to provide hot lunches to classmates who hadn’t packed a lunch and didn’t want to eat vending machine fare.

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Candice Lee of Sommer, Udall, Hardwick & Hyatt, P.A.

Partnerships and corporations are two common forms a startup business can take. Forming a corporation requires the business to register its articles or certificate of organization with the governing state agency. Partnerships aren’t usually required to register – though it’s recommended they do – and can exist by default.

A partnership consists of two or more owners operating a business. It can be a general or a limited partnership. Most state laws consider two or more people who own a business partners by default, but many new owners don’t realize the implications of this. Because each partner is jointly and severally, or individually, liable for the partnership’s obligations, the action of any partner binds the partnership, even if agreements are made without the other partners’ knowledge or consent.  Continue reading →

Tom Stephenson, Managing General Partner, Verge Fund

The primary way in which banks make money is through loans.  But in today’s economic environment, regulators are requiring banks to increase their reserves – the capital that backs loans – to support an increasing number of loans at risk of default.  As banks work hard to reduce their bad loans, many are making far fewer new loans and decreasing the limits on existing lines of credit. Their problem is that they need to make more loans to make money, but they are being pressured to make fewer loans. 

For business owners in need of capital to grow or stay afloat, a bank’s problems can become their own.  A company that once qualified for a line of credit now might only qualify for a smaller line or no line at all. This is often true for a company seeking its first round of debt financing, but even companies with long-standing relationships with commercial lenders feel the scrutiny.  Banks and businesses operate in a vastly different financial world than a few years ago.

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Betsy Gillette, Director of Market Research & Planning, TVC

Technology Ventures Corporation helps entrepreneurs and inventors develop the business plans and access the funding they’ll need to succeed with a technology-based product. TVC’s Equity Capital Symposium, held annually in May, provides a forum for matching business ideas with investors and has facilitated more than $1 billion in funding for its client companies, most of whom are scientists and engineers new to the world of market research and marketing. While most of these entrepreneurs understand the technology they hope to apply to commercial uses, many don’t understand how to secure target markets and appraise market needs — which they must do to secure venture capital funding. Continue reading →

Candice Lee of Sommer, Udall, Hardwick & Hyatt, P.A.

One of the first considerations for the owner of a new business is what form that business should take. The most common options are sole proprietorship, partnership (general and limited), corporation (C corporation and S corporation) and limited liability company.

Most businesses begin as a sole proprietorship, which makes sense for the startup and new business owner. Many sole proprietorships consist of a single individual working at home, developing a product in the garage or writing software code on the home computer. These businesses have few assets other than the equipment and tools used — and usually owned — by the individual. Any assets acquired by the sole proprietor are purchased in the owner’s name, although some sole proprietors use a “doing business as” or “d/b/a” name following their own names. Continue reading →