Last week, Joel Marquis, assistant director of venture programs at the Dingman Center for Entrepreneurship at the University of Maryland’s Robert H. Smith School of Business, took questions from readers about starting and running a new business. Here are excerpts, edited for grammar and clarity.

Joel Marquis

As a quick background on my role in the Dingman Center: I spend the majority of my time running an angel investment group called the Dingman Center Angels. We invest in start-ups located in the Mid-Atlantic region that are seeking up to $1 million in funding. This involves speaking with tons of entrepreneurs and determining if their start-up is a good fit for our investors. I also help run programs focused on connecting students with start-ups.

Student looking for money

Q.I am a current MBA student, also running my start-up on the side. I’m looking for some money to grow the business, but I don’t think I’m quite ready to pitch to investors. How else can I secure some quick funds?

Marquis: I would look to scholarships, grants and business plan competitions. It seems like every university now has some sort of business competition or incubator program, which often times provides funding.

Having said that, the best way to get funding is from your own customers. If you can provide the customer with value right from the start, then you should be able to monetize that customer. Self-funding is the best path possible because then you don’t have to answer to investors or banks.

How do you find worthy start-ups?

Q.Where do you typically find the start-ups that present to your group? Do you search for them or do they come looking for you?

Marquis: The answer is both. I source companies and companies come to us. I spend a lot of time on the road, which means going out into the start-up community to meet with entrepreneurs. Luckily, there are many programs and events that attract start-ups such as incubators, pitch events, industry conferences.

Also the start-up world is still a relatively small network. The power of referrals is huge in early-stage investing. This can be referrals from investors, other start-ups or industry experts. The best way to get a meeting with any investor is from a referral.

Service-based start-ups

Q.I’m 50 years old, have been dabbling in a service-based business (health coaching) for a while. I’d love to grow it into something more, but am clueless. I’ve tried SCORE — they tell me to hang fliers at the gym. Not helpful. I can’t see getting an MBA at this point. Where do I turn so that I can, someday, present to a group such as yours?

Marquis: If you haven’t already, I would recommend getting smart on the lean start-up methodology (Eric Ries), customer development process (Steve Blank) and the business model canvas. This is a common way that entrepreneurs are evaluating and developing their businesses. Going through this process will help you understand your business better and determine what it might take to really grow the business. You don’t need an MBA if you go through this process.

Being ready

Q.What are some reasons you may turn a company away from pitching in front of your angel investors?

Marquis: There are a lot of reasons why a company doesn’t get to pitch to our investors. First is a question of business stage. Our investors don’t fund ideas, they want to fund proven businesses. Therefore, the company needs to have traction. This traction can come in three forms: revenue traction, customer traction (non-revenue generating) and funding traction. Having all three is ideal, but having none is a difficult sell to our investors.

The other reason might be industry sector and location. Our investors lean more toward technology-related companies as opposed to life sciences and biotech. Also, we like to invest locally. That means our primary focus is on companies located in Maryland, Virginia and the District.

‘Shark Tank’

Q.How do you feel about the show “Shark Tank?” Do you think it is a good representation of how investing really works? The show makes me really nervous to talk to investors.

Marquis: I like the show a lot, but make no mistake: This is reality TV, and it’s purely for entertainment value. It’s not a great indication of how angel investing really works. Usually deals are struck over a much longer period.

What is accurate, though, is the types of questions that the Sharks will ask on the show. If you are a regular watcher, then you’ll start to pick up some common questions or concerns on such topics as customer acquisition costs, margins, lifetime value of the customer, scalability, marketing strategy, etc. These are all questions any smart investor will ask.

Now hiring

Q.My co-founder and I are entering the fundraising phase. We feel we need to hire a sales/marketing-focused team member to help us pitch. What advice/resources can you offer for finding and hiring this new team member?

Marquis: Hopefully you are hiring this person to help grow the business, not just to help with the fundraising. Remember fundraising is a non-recurring, non-revenue generating event. Yes, it is important and time-consuming, but any new hire should be to benefit the company outside/beyond just fundraising.

The best place to find someone is within your own network. Research has shown that previous co-workers make great early employees from a fit standpoint. Also, get involved in the start-up ecosystem and get to know other companies. Many start-ups fail so there is always potentially great talent available. Co-founders Lab is another service that helps entrepreneurs find other entrepreneurs. The key to building an early team is more about fit than skills. You can always “coach up” an early employee but it’s hard to change a person’s attitude and work ethic.

Putting on a show

Q.My friend and I are both performers. I have been paid to do events alone, but my friend wants to put together a show where we will perform together. While not exactly forming a band, do we need to start a business to handle payments for performances? Everything I have done as an individual has been with my personal social security number. I have never had to deal with paying an employee or partner.

Marquis: Sounds like you may want to set up a separate business entity to handle your performances going forward. Forming a limited liability corporation is very common for small businesses. This should allow the business to take payments rather than you personally. Disclaimer: Definitely consult a lawyer and banker.