Amir Banifatemi is founder of K5 Accelerator, which is based at ChapmanCollege’s e-Village. He has extensive experience developing start up and growth companies in many different markets but focuses primarily on healthcare, internet and media technologies. While he is focused keenly on developing value, he also has an eye toward projects that have significant technological breakthroughs and significant social and economic impact.
Mehit: You’ve been quoted that the center of gravity in OrangeCounty has been around real estate and finance resulting in a very careful and staid culture. What would you like to see changed?
Amir: I would try to improve a certain number of things, one of those would be more collaboration. I think the history of OrangeCounty and how people are disbursed does not promote synergies. Unfortunately, distance makes it difficult for people to meet and collaborate on projects, except on big projects.
Further if you look historically, at San Francisco or other places, when people get out of college, where do they go? They go to Hewlett Packard or the Fairchild or Intel but what do they do here? They go to a real estate company or title company. The appropriate employment environment is lacking.
Finally, people are focused on cash today instead of cash tomorrow. Your attitude, your investment of time and resource in collaboration and how you view society and community are different if you looking at cash tomorrow.
Mehit: Is the amount and quality of talent available locally sufficient?
Amir: If you look at the distribution curve of people launching companies, you really have the extremes. You have the lifestyle business: the mom and pop, the carpet store, the restaurant, they make money and that’s fine. And on the other side are people who have high growth companies, really big companies. But in the middle, you have people that could be entrepreneurial, add big things, big value and most the time, they don’t make it.
Mehit: They don’t understand how to take it to the next step?
Amir: Right. You have a lot of people like that. The talent pool is here. In fact, if we succeed, many people will come here because the community movement that we are trying to instill is that everyone is invited. We all part of it. We’re just starting.
Mehit: I hear a lot of angel investors saying, ‘We want to see revenue, we want to see that you’re in business.’ Is the time of the pure start up dead?
Amir: It’s unfortunate. There’s a moment to ask this question for certain type of companies but there is also a moment to ask ‘What is your goal in life?’ ‘What do you want to change?’ ‘Why are you thinking about this idea to begin with?’ ‘What was your motivation?’ And if you see that that motivation is strong, well thought out, from the gut, something strong, you see that these people are ready to make change happen and you want to back them up. If you have a good jockey, you can bet on them.
They may not be fully capable of doing what needs to be done and that’s where mentorship comes in. Every one of us has been successful because someone at one point has lent us a hand and helped us, in one way or another. If we don’t continue this chain of mentorship, people will lose a lot of time on their own, by iteration, trying to avoid the mistakes.
The other resistance is that, because of the immediacy on cash and the focus on business first, many people say, ‘I get it, but I’m busy right now. I have to focus and business comes first’. And that’s okay, I don’t disagree with that, but somehow, sometimes, we need to make that exception for something new.
Mehit: What are the reasons deals aren’t being funded and what would have to happen for the number to increase?
Amir: Number one reason is that we don’t have enough entrepreneurs trying to start businesses that are VC friendly. Second, we don’t have enough capital here that is attracted to, or has tolerance for, risk. Third, we don’t have models and templates. We don’t have a Steve Jobs or a Mark Zuckerberg who energize the community and make people want to copy them.
Mehit: What’s the relationship between ChapmanCollege and K5?
Amir: It’s a friendly relationship. We allow the students to come work with start ups to get first hand experience to understand what start ups are through first hand experience of what entrepreneurship is, instead of just doing a class. That’s different than reading TechCrunch or an article about a start up and dreaming about it or seeing real people who are doing it that they can talk to and be part of it.
Mehit: Anything magic about 90 days (the length of the K5 program)?
Amir: That’s the formula that other accelerators, including Y-Combinator which is our model, started. We think 90 days is a good amount of time to make or break. If they cannot prove in 90 days that there is a valuable story, you’d better stop it and do something else.
Mehit: What kinds of behaviors or capabilities attract you to an entrepreneur?
Amir: There are many, many answers to that. One of them is the initial energy and drive. Someone has to carry that idea, that goal, that dream. We look at the energy, the determination, the drive of that person and the ability to have their own ideas, not just be a ‘me too’.
The second thing we look at is clarity of mind. How articulate they are in expressing the problem and how they want to solve it. They may not know exactly every milestone, every step they’re going to go through but they have a clear understanding, which means they’ve studied, they’ve researched, they’ve thought about it. The messaging becomes very clear, it may not be very beautiful, but you can see the clarity. And that clarity is very important because you can see that there is a true statement of the problem and a true desire of solving it through their behavior.
So these two requirements are essential for us because we’re betting on people first. Our whole intent is about the people.
The third is timing. Are you arriving at the right time?