These entrepreneurs started their companies with their own bank accounts
Lyle Ball, CEO of Avii, a tax and accounting solutions software company, has always considered himself to be entrepreneurial-minded. It was this love of helping people and creating meaningful products that drove him to launch, and self-fund, several different ventures throughout his career, the most recent being Avii, formerly named Net Endeavor.
“My two business partners had self-funded Net Endeavor until the point when I joined,” Ball says. “Then we morphed into this new entity called Avii. And Avii, and this entire platform is self-funded. We’ve put just under three million dollars into it.”
Though there have been several instances when self-funding meant that Ball could not accept a salary while the startups were getting up off the ground, he knows that regardless of the struggle, self-funding was the best way to meet the desired outcome of his companies.
Self-funding gives companies more control
“More than two years of my 27-year career I’ve been without income,” says Ball, mentioning that living within their means and support from his similarly-minded entrepreneurial wife is what kept his family afloat. Fortunately, he says, he never had to go without a salary at Avii. However, having to do so in other entrepreneurial ventures provided him with valuable experiences that changed the way he thought about funding new business endeavors.
“[An important part of business] is not taking funding and deluding yourself too early. If one of your goals is to just make money, then taking capital, using it quickly, and cashing out may be an option,” he says. “But for me, I always wanted to build things that were long-term and lasted. And that meant I wanted to be around those things a little longer.”
Self-funding gave him that opportunity.
“For me, self-funding is a strategic decision,” he says. “I valued [self-funding] as the best choice [for Avii], so, therefore, it wasn’t hard for me,” he says. “I respect [other people’s funding] in the same way that I do my own. The same things that are hard in other [venture capital funded] businesses can be hard for me when self-funding my own businesses.”
He mentions how things like market shifts and other catastrophes (such as COVID-19) are hard for any startup to weather and manage―regardless of whether they are self-funded or not. Venture capital can’t always save you in these circumstances, he says, so it’s better to learn to adapt and go without. By self-funding, Avii had the chance to truly develop its vision and culture. If they had elected to take capital elsewhere they may have lost some of that freedom.
“It’s all about ownership of the company, so long as you are a majority owner, then you get to have a say in where the entity is going and what it is doing. You also really get to control the culture. And when you become a minority owner, you lose control of the culture and the major decisions.”
Self-funding gives a company more creative freedom
For Kimberly Kuehn, founder of Park Silly Sunday Market, maintaining control and creativity in her business decisions was exactly why she too elected to self-fund. Kuehn’s vision was to bring thousands of Park City residents to Main Street for a market every Sunday in order to bring in some economic stimulus to the local artisans and restaurants in Park City during the summer months.
Early on in the development process, she approached several potential partners with her idea. Though they were on board and willing to support, they proposed changing the name of the Market. At that point, she had already fallen in love with “Park Silly” and the potential brand. “I love the name,” gushes Kuehn. “You know, ‘Park Silian.’ It’s a huge marketing deal for us. A lot of people have started to call it ‘Park Silly,’ Utah.”
““It’s all about ownership of the company, so long as you are a majority owner, then you get to have a say in where the entity is going and what it is doing”-Lyle Ball
So she elected to go her own way, instead. Like Ball, Kuehn didn’t go it alone, she partnered up with her sister, Kate McChesney, and another friend to fund her idea and bring it to life. Now, Park Silly Sunday is one of the most well-attended events in the entire state with hundreds of local artisans coming together to share their wares. Not only that, but it’s one of the only places in Utah where you can enjoy a frozen cocktail, wine, or beer from a full bar while walking down one of the most beautiful main streets in the country on a Sunday afternoon.
“Kim always wanted the frozen rosé,” says McChesney. “But in our world, the ‘Fro-Se’ was a little bit played out. We ended up bringing frozen machines to Main Street anyway. We are the only frozen drink on Main Street and we also have a full bar. Getting the alcohol license was really my claim to fame.”
Despite its success, the Park Silly team had to figure out a way to keep enough cash flow coming into the nonprofit organization after the initial round of self-funding. “Although we do get some grants, there are lots of other nonprofits in Park City who get millions of dollars from private donors,” Kuehn says, and she just wasn’t comfortable “rubbing up against” people for donations.
But in a stroke of true entrepreneurial genius, she elected to set up a sponsorship model to help drive more money into the Market. With her idea, companies can invest money in the market and get a marketing value back with signage and other community exposure during the summer events―and so far, it’s been working. The Market partnered with large brands like Delta and Mark Miller Subaru, and the demand for sponsorship opportunities has been so great that they’ve had to accept new ones on bid only.
“Ultimately, over the years we’ve really come up with a recipe about how to run an event in this town and we do it because we love Park City,” says McChesney, adding that the team has plans for expansion as well and is looking at doing events in Spokane, Washington and possibly even Kamas, Utah.
Self-funding gives entrepreneurs the life they want to live
Kristen Fox, founder of Fox School of Wine, grew up in La Jolla, California and often saw her parents enjoy wine with their meals. Wine was an everyday part of life for her family. Then in 2004 her sister moved to Park City and opened The Art of Wine. Fox came along to be a substitute teacher at the school and it was there that she discovered a true, undying passion for the wine industry.
After her sister moved to Napa Valley in 2008 and took the wine business with her, Fox was left behind and she found herself missing the art. Knowing that she couldn’t live a fulfilling life without some kind of personal connection to wine, she opened up the Fox School of Wine in Park City later that October. In order to slow-grow the wine school of her dreams, Fox elected to self-fund with her then-husband. Now, it’s one of the biggest (and only) wine schools in Park City.
But, as it is in business and in life, things don’t always go as planned. When a sudden divorce left Fox without a source of support, she knew she had to seriously focus on growing her wine school before she could no longer fund the business that made her the happiest.
“Desperation is a powerful motivator,” Fox shares. “The first 10 years [of my business had this] lightness, I really enjoyed the way the business was for me. Back then, it didn’t really matter if I didn’t sell this or didn’t fill this class, because I had that support [from my ex-husband] behind me. But suddenly, I was going to be financially dependent on the money [from the wine school] and it became much more serious.”
When Fox became dependent on her small business, she found that going in alone allowed her more freedom to build her passion project exactly as she saw fit. But the wine school wouldn’t grow if she didn’t find the right partner that fully shared her same vision. “I realized very early that I was the bottleneck in my business. And so I was either going to be capped at the minimum hours that I could get the work done and still sleep, or I was going to have to take on someone to help me,” she says.
Fox had been against extra help in the past, but then she read an article by marketer Dean Jackson about clearly defining the roles you need in business and decided to be open to the thought. So she wrote up a very specific list of qualities she was looking for. After all, this was her self-funded passion project, she couldn’t just hire any old person off the street.
After she finished writing up the job description, Fox received an email from a former Fox School of Wine student who was looking for advice about getting a job in the wine industry. Fox invited her out to lunch to share what she knew, never intending to hire her on, and the stars aligned.
“I’ve realized [so many times as an entrepreneur] that if I open myself up to what I truly need to help me, the resources are just given to me. Whether it’s someone like [my former student] coming to me for career advice and then discovering that she is the perfect person to come work for me, or something more major.
“I think those sorts of opportunities are available to all of us. I think self-funded entrepreneurs get to [those opportunities] a little quicker than the rest of us. By way of learning that there are some things you can control and others that you can’t, you just kind of have to take a deep breath and trust the process.”
Despite there being many bumps along the way, Fox wouldn’t change a thing about the self-funding process. After all, self-funding her business is what gave her the opportunity to build the career that she always dreamed of. And while she sometimes wishes she had the corporate perks as she would if she worked at another company, she knows that self-funding her business is truly what allowed her to build the career (and life) of her dreams.
“Every time I hear about a job and I daydream about getting a paycheck, I also quickly realize that I would not be able to do what I think is best and right for me, too. [I want to] really leave a mark, my own personal mark, via my businesses, on people and the world. So that keeps me centered.”
It’s not permanent
Just because a company elects to self-fund for a stage or two in the beginning, doesn’t mean the company can’t accept another form of other capital when the time is right. After 19 years of self-funding Avii, the team decided to take on their first round of outside capital this year. And for Ball, this decision was just as strategic and cut-to-fit their needs as the rest of them were.
“There’s a time for funding, and that time is when development has succeeded and you’ve proven to the market that you have a viable solution and you have customers,” says Ball. “We call it ‘post-revenue’ in the venture capital world. Once you’re post-revenue and have proven the model, then taking investment at that point is aimed at expanding that proven opportunity instead of researching and developing an idea,” says Ball. “That’s my preferred use of external funding.”
“Go for it no matter what because there will always be naysayers and people who are negative about your ideas. You just kind of have to jump over that hurdle and say ‘no, this is happening. Let’s do it.’”-Kimberly Kuehn
Because the Avii team has a viable product with actual market value, Ball isn’t worried about losing control of the team’s vision for the company. They have the power to pick and choose who they want to work with and they only elect to work with venture capitalists whose values coincide with their own.
“We’ve courted around 20 different funding sources that we would like to work with. There are some types of money and there are some individual firms who we don’t want to work with if it doesn’t fit into our culture or our vision,” Ball says. “Choosing the right partner is a very patient process for me. I’m not nervous [to take on outside funding] at all.”
According to Ball, it doesn’t matter what kind of funding you take on if you aren’t completely invested in your endeavor. If you’re not all in, you’ll fail regardless of whether venture capital was involved or not. It just might hurt more if your personal finances were severely affected as a result.
“Passion has to override desire for wealth, desire for notoriety, and the desire for success. Like are you passionate about that thing that you want to do? And that passion needs to extend beyond, you know eight to five during the day. It needs to extend beyond business hours,” advises Ball.
Kuehn could agree that passion is key to a successful venture and ultimately encourages other founders to be comfortable taking risks. “Go for it no matter what because there will always be naysayers and people who are negative about your ideas. You just kind of have to jump over that hurdle and say ‘no, this is happening. Let’s do it.’”