William K. "Bill" Richardson [pictured at left], a partner and managing director with DragonBridge — an international merchant bank and venture capitalist with offices in Honolulu that helps China companies go public in the U.S. market — urged BYU-Hawaii business students interested in starting their own companies to consider "high-growth entrepreneurship."
Richardson, a prominent Honolulu attorney and former volleyball player for the University of California, Santa Barbara, explained that for the past 15 years his career has revolved around venture capital in high-growth companies. "The key is building the next great company," he said.
"How does this apply to you?" he asked, stressing that it's important for the students to understand what they really want in life. "I decided early on that I was going to try to build as many skills in my life between the ages of 22-32, so that by the time I was 35 I could have the career I really wanted. I'm lucky to say that I do have that career, and I've had the opportunity to create wealth and jobs for my friends and family."
However, he added, "The world is globalizing, and it's very, very difficult to build small businesses that expand, so why not try for a big business in a global industry? It's all about the financing, and growing your company as quickly as you can. As an example, do you want to put a band-aid on someone's cut, or do you want to prevent a tuberculosis pandemic?"
"The hardest thing about high-growth entrepreneurship is people," Richardson continued. "The things that I learned as a jock [athlete] are the things that you need to build a really big company: You need to be able to adapt to change, to persevere, work hard, and build teams that can adapt to change. If there's one constant in venture capital and high-growth entrepreneurship, it's change. As an example, I have never seen a company go public that matches the business plan that was presented to me when I first inspected it."
"Change and adaptation to current market conditions, and the world's financial conditions, are what's necessary for you to become a great entrepreneur," Richardson said. "It's like the practice of any other profession: Entrepreneurship is something you can learn, but it's something that takes a lot of time, expertise and practice. You learn probably more from your mistakes than you do from your wins."
"One of the things I like about this school [BYU-Hawaii], is you really learn to work in teams. Collaboration is the only way that you can build a big company," he said. "The reason most CEOs fail is they don't use the expertise and strengths of the people around them."
"Great companies don't usually fail because they have a bad idea: They usually fail because they run out of money. Time is probably the most important thing you have. Use it effectively. Use your team effectively. As a team, make fewer mistakes. Adapt as quickly as you can to change, and that's how you can succeed."
"The teams are far more important than technology," Richard continued. "Group collaboration is the most indicative thing of success. As an investor looking at companies, I look at the team first. I like to see presentations that emphasize the team first."
"Entrepreneurship, especially in the high-growth environment, is very stressful, so you have to understand yourself," he said. "If you have the will and passion to do it, give it a shot. It could have a huge impact on the world."
Asked how the venture capital industry has changed since the dot-com "bubble" burst in 1999, Richardson pointed out that business is "coming back quite significantly, but in a very different way: There are far fewer IPOs — initial public offerings — for companies. However, there are now far more large companies, like the Ciscos of the world, Google or others, that are buying these companies for multiples that are similar to the old market."
"As a venture capitalist, we're now building a company to be bought... It's actually a great time to start a business," he said. "You have to build your company as if you're going to go public, but perhaps a more likely scenario today is a 'harvest strategy' where you go to a bigger company that might need your product."
Asked how a start-up company can get the attention of venture capitalists, Richardson told the students they need great advisers and excellent, brief executive summaries. For example, of a hundred proposals, he said he might look at 15, follow up with due diligence on seven, and do two-or-three deals a year. The other 85% of his time he spends working with the businesses his company has already bought.
"It's all about the people," Richardson said. "That's what entrepreneurship is about."