A life-sized dancing carrot promoting fruit juice and smoothies will punctuate one Carlson School of Management graduate’s entrepreneurial debut tonight.
Eric Strauss will host his Crazy Carrot Juice Bar & Cafe’s grand opening in St. Paul after 18 months of extensive planning and investment seeking.
And he did it all without financial backing from his alma mater.
With business schools such as Columbia University and the University of Michigan offering to invest in their students’ start-up businesses, the Carlson school is choosing to buck the trend.
“We’re in the middle of a vibrant venture capital community,” said Richard Cardozo, Carlson’s chairman in Entrepreneurial Studies. “We’re blessed with a community that’s pleased to work closely with us and we with them.”
Venture capital programs attempt to combine high-quality academics and real world perspectives. In exchange for its investment, a school takes an equity stake and a small percentage of the business’s profit. That small percentage is put back into the fund to fuel the start-up cycle.
The University of Michigan is one school that has successfully implemented the program.
The university’s fund was established last summer with $250,000 from the school and $250,000 from separate private donations. It now totals $1 million and is expected to grow.
“It adds another dimension to our portfolio of opportunities for our students to apply outside the classroom,” said Keith Decie, Michigan’s director of communications.
In Columbia, getting seed money requires several presentations before advisory boards. The boards make suggestions and the young entrepreneurs are expected to revise their ideas accordingly.
While giving his Carlson education an “A+,” Strauss wouldn’t have minded some help getting the juice bar off the ground.
“I think what it would have done is it would have given me a better chance for starting a business right out of school,” said Strauss, who worked at a satellite company for one year after graduation.
In 1996, Strauss supplied $20,000 of the Crazy Carrot’s estimated $100,000 start-up cost himself. He then began soliciting investors.
“It was time consuming but probably the best thing I could have done,” he said. Strauss now has 30 investors in nine states.
Starting venture capital funds requires careful planning and resource organization — a tremendous amount of work not all schools are willing to do, Decie said.
Yet, staying competitive with schools already offering financial help to future entrepreneurs does not have Carlson concerned.
The contacts made through networking in Minneapolis’ thriving business community should be an incentive for prospective students, Cardozo said.