Mainebiz

V O L . X X I V N O. V I I A P R I L 2 , 2 0 1 8 26 E rica Schmitz began making her own clothes fi ve years ago, but soon came across a frustra- tion — the online templates had body images that were great for fashion models, but not for everyone else. She soon found out that she wasn't alone, it was a global issue. Schmitz, of Portland, is a health care consultant with an Augusta non- profi t, not an inventor. But, armed with an aging iPad and a desire to solve a problem, she did what entrepreneurs have been doing since someone looked at a rock and said, "Gee, if I make this round so it can roll, maybe it will help me get places faster." She's been developing her startup for more than a year. Financing has included grants, investments from friends and family, a successful Kickstarter campaign and a lot of hard work. "So far I've been bootstrapping it," Schmitz says. She hopes to launch Mybodymodel, an app that will allow sewing hobby- ists and clothes designers to create a custom body sketch, this fall. Across Maine, entrepreneurs, many armed with no more than an idea and a dream to succeed, struggle to fi nd a way to get fi nancing to make it happen. Schmitz's fi rst boost was a $5,000 TechStart matching grant from Maine Technology Institute in February 2017. A $25,000 seed grant in June from MTI also had to be matched, which she was able to do with her Kickstarter campaign. She acknowledges that it's taken longer than she expected. "Since I decided to do it, I've been working every weekend, every holiday every vacation," says Schmitz, 43, who is married and has a 10-year-old daughter. No free money "Anyone with a good idea will fol- low the same path [as Schmitz]," says Nancy Strojny, chair of the SCORE Portland chapter, which mentors entrepreneurs and small-business own- ers. She said many give up because they don't know how to go about it or aren't prepared to do the work. "Most money from startups comes from friends and family," she says. "Most people don't want to hear that ... ere's this misconception, people think that there's free money out there. It doesn't really work that way." While conventional bank funding isn't impossible for a startup, it's also diffi cult to get. "You have to have a credit score, collat- eral, business projections — it's not closed to everyone, but it's generally closed if you don't have [those things]," Strojny says. "If it was easy, everyone would do it and they'd all have successful businesses." Gorham Savings Bank, which sponsors the annual Launchpad com- petition, with a $50,000 grand prize, also traditionally fi nances startups, says Julie Viola, vice president and business banking manager. Businesses have to show how they'll generate capital and how the bank will be repaid. "Our expectation is to be repaid," says Viola. "We're not risk-takers." Each customer has diff erent needs, but they have one thing in common. "It's about understanding what they're doing and about asking the right questions." Kim Donnelly, senior vice presi- dent of business lending at the bank, says cash fl ow, collateral and fall- backs are all considerations. Is there a spouse with an income who can support the entrepreneur in the early stages? Is the entrepreneur keeping her day job? Viola and Donnelly say lack of preparation and not knowing what's involved are common issues. People often come to the bank with "really cool ideas," Viola says, but no business plan. " ey haven't done their due diligence." "It's a great idea," Donnelly adds, "but they don't know how to execute it on paper. It doesn't matter if it's a startup, it doesn't matter what it is. It needs revenue projections." Strojny sees the same thing at SCORE. "People fall in love with an idea, and they think everyone's going to want it. But you have to fi nd a market that's not being met and fi ll it," Strojny says. Until that's worked out, the plan isn't ready for fi nancing. Bootstrapping 101 Financing a startup is about more than the money F O C U S P H O T O / T I M G R E E N WAY Erica Schmitz with her app, Mybodymodel, in her home offi ce in Portland. She has raised startup capital through Kickstarter and small grants.

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