Editor’s note: This article was initially published in The Daily Gazette, Swarthmore’s online, daily newspaper founded in Fall 1996. As of Fall 2018, the DG has merged with The Phoenix. See the about page to read more about the DG.
Terry Hicks ’73 is the keynote speaker for the Lax Conference on Entrepreneurship, to be held this Saturday in the Science Center. His speech, entitled “‘When You’re Finished Changing, You’re Finished’ — Entrepreneurship in the Current Economy,” will take place in Sci 101 at noon. Those interested in attending must register online.
According to the conference’s website, “Hicks is Vice President of the Investment Group for Ben Franklin Technology Partners, where he has worked since 1993. He is responsible for all of Ben Franklin’s investment activities, which includes a portfolio of over 120 early and emerging-stage technology companies; one of the largest such portfolios in the country. Terry joined Ben Franklin in 1993 after twenty years of experience in small business lending and corporate treasury activities with Fidelity Bank (currently Wachovia) and Sun Company respectively. He previously served as Vice President of Sun Company’s Specialized Small Business Investment Company.
In addition to managing Ben Franklin’s investment activity for over ten years, he also co-founded the Minority Angel Investor Network, the nation’s only organized angel group investing in high growth minority-owned or -led companies. Terry earned a B.A. in economics from Swarthmore College and an M.B.A. in finance from LaSalle University.”
We spoke with Hicks about his address, his career, and what it takes to be an entrepreneur.
Terry Hicks: The message that I want to convey is that change is a good thing in the context of entrepreneurship. Change is part of the entrepreneur’s DNA.
In a way, entrepreneurship is managing the unpredictable. If you assume that’s the case, then change is inevitable. If you anticipate that it’s going to be, then you find ways to address it. There will be change on the part of the entrepreneur and there will be change in the ecosystem that the entrepreneur operates in. And both of those kinds of change need to be recognized and celebrated.
AK: Do you think Swatties have what it takes to be entrepreneurial?
TH: I think there are a number of things that Swarthmore students will bring to the table. The interdisciplinary approach to problem solving that is promoted at Swarthmore because of the liberal arts—if you’re in physics you’re [can] take French or a music course—all that disciplinary exposure I think is a real asset when coming into the entrepreneurial suite.
Outside the box thinking! You know Swarthmore students do think outside the box. In entrepreneurial situations you always want to have folks in the room who are structured thinkers—you’re going to need those folks on your team, especially your accountants. But then you want some around that table that are going to kind of push the sides of the box.
A willingness to work hard. You and I know as Swatties we worked our butts off—the all-nighters and what have you. It doesn’t get easier in entrepreneurial settings. I’ve worked with clients where there are all-nighters preparing a sales pitch to a client.
There’s the intellectual curiosity that Swarthmore students bring to the table. You need that as an entrepreneur. You want to ask questions, you want to question the assumptions. So I think Swarthmore prepares you in a number of ways to be a successful entrepreneur.
AK: As an investor, what else do you look for an entrepreneur?
TH: It’s about their energy, it’s about their vision, it’s about their commitment to an idea. I like to see folks that have not only excelled but folks who have failed once. I think failure is a good lesson for an entrepreneur. Not that you want to invest in someone who has failed repeatedly, but I always think that someone who has failed once hopefully has learned from that failure and subsequently built upon it.
Obviously in the technology area we look for something that is special, something that has a competitive advantage, and a team around that technology that’s going to help to grow it and get it to market and hopefully make a lot of money for its investor.
AK: Give us an example of a company that has benefited from your organization’s investment.
TH: There’s a company that I will probably highlight on Saturday called Brad’s Raw Foods. It’s sort of tee-ing off the health craze and the desire of some consumers today to eat foods that are low in cholesterol, that are basically raw, the idea being that when you heat or cook food, you’re cooking away all the good stuff. He has the technology for drying the vegetables that he subsequently bags and is now selling at Whole Foods and Wegmans. So we helped him with some investment to do some product development, and he’s doing quite well right now.
AK: What makes entrepreneurship different than establishment business?
TH: I think entrepreneurs are always going to introduce change. Revolutionary changes are really not happening in corporate settings. Those changes are happening in entrepreneurial settings. It’s easier perhaps to do it in that type of environment because once you become a large organization you start getting entrapped by rules and maybe a different culture that doesn’t celebrate entrepreneurship and pushing the envelope.
Microsoft was at one point entrepreneurial. Now it’s grown into a huge organization. Google was once entrepreneurial. So if you look at all of the significant technology changes, these changes are done by and created by small entrepreneurial companies that ultimately if they’re successful, mushroom into large corporate entities, but at their inception were small entrepreneurial companies.
AK: How did your career path lead you into entrepreneurship?
TH: [After Swarthmore] I went to Fidelity bank and became a lender in a branch office which I ran. That was my first exposure to entrepreneurship. I really fell in love with the passion and the creativity that these types of folks generated.
After that I went with a company called Alliance Enterprise Corporation (a subsidiary of Sonoco). There they had what subsequently became known as specialized small business investment companies. The whole purpose of these entitites which were funded with a combination of private dollars and USSBA dollars was to get money into companies that were owned by socially and economically disadvantaged individuals, which included minorities, the handicapped, even Vietnam veterans at the time.
So it gave me a chance to really get involved in debt-financing and equity-financing, kind of quasi-venture capital. I had a market which was country-wide so I got to travel quite a bit and be exposed to different kinds of companies and loans and equity investments.
After doing that for many, many years, I learned of an opportunity here at Ben Franklin almost twenty years ago, and I’ve been there since then. My responsibility here is overseeing all the investment activity. We have a portfolio of about 120 companies, they’re all technology, they’re all early-stage for the most part. We’re one of the most active early-stage investors in the country, and arguably the most aggressive here in the region.
AK: As a member of the Minority Angel Investor Network, what do you see as the role of social responsibility in entrepreneurship?
TH: I co-founded several years ago what is now the country’s only minority-focused angel group. That meets on a formal basis once a month. [We invest in] technology companies that are owned or led by minorities or women. And we’ve been doing that now since 2004 when we launched.
Back then things were a lot different. I saw good deals that were just not being seen by the established angel networks. Back then more so than now, the groups that got before the angel networks were groups that were introduced by a member, so it’s just like a private club, you get a member to sponsor you. What was happening was these minority groups did not have a sponsor.
Ben Franklin views themselves as a catalyst for change, so we said why don’t we serve as a catalyst for change and create a vehicle that would allows these minority groups to come in and get some exposure to investors. So we formed what is now called the Minority Angel Investor Network. We see deals and occasionally we invest.
AK: What’s the entrepreneurship scene like in Philly?
TH: Things are exciting here in Philly around entrepreneurship. Has that always been? I probably can’t make a convincing case that it’s always been, but over the last several years there’s been an emergence of accelerators.
Entities like Dreamit Ventures that we helped to finance here back in 2008. The reemergence of incubators, these are programs that provide shared space for young companies, incubators like the Science Center and an incubator called VentureForth. You have the city of Philadelphia itself that’s starting to celebrate entrepreneurship.
There’s a recent initiative called StartupPHL which is a branding initiative on the part of the city of Philadelphia to promote the city as a place to start a business. You have active venture capitalists like FirstRound that have moved into the city of Philadelphia. They started something called the Dorm Room Fund to fund college and university students starting companies. You have Tech Week that’s coming up in April that has a whole host of daily activities around entrepreneurship.
So there are a lot of things that are happening here that I think make it an exciting time to be in the Philadelphia area if you’re starting or growing a company.
Photo courtesy of Ben Franklin Technology Partners