The Functional Training Craze

In the past few years I've seen a huge transition in the fitness industry. More and more people are using functional training, and some argue it's the only way to train. The purpose of this article is to give people an understanding of what functional training is, and what it does and does not do.

First, lets look at what functional actually means. 

Func.tion.al 1. capable of operating or functioning, 2. capable of serving the purpose for which it was intended (Webster's Encyclopedia 2nd Edition, 1996) 

Based on that definition, you can draw many conclusions as to what is functional. Depending upon who you ask, you will most likely get a diverse variety of responses as to what is functional. All human movement is a combination of various functions. Human movement cannot take place without muscular function. According to the functional training "experts", functional training uses bands, balls, free-weights, and plyometric exercises in an attempt to condition the body in an un-stable environment. Many of the experts feel that performing exercises that mimic activities or specific skills is the most effective way to train, regardless of ones goal. 

What is the safest, most efficient and effective way to optimize human performance? 

Factors Affecting Human Performance 

In order to maximize human performance, you must have a good understanding of what affects performance. The factors that play the greatest role in performance are: Power (Strength and Speed), Agility (Flexibility/Mobility/Stability), Cardiovascular and Respiratory Conditioning, Sport Skill (Neuromuscular Coordination and Efficiency), and Genetic Potential. 

Let’s take a look at each factor and determine which training methods are going to deliver optimal results. By optimal results, I mean the greatest amount of improvement, with the least amount of risk, and in the shortest amount of time. 

Power 

Power= Force x Distance 

Time 

Power can be increased three ways. 

1. Increase Force (Strength) 

What is the most effective method of increasing strength and/or muscle tissue? In my opinion, High Intensity Strength Training is the most productive, safe, and time efficient approach available. I am not stating that one set of each exercise is the best choice. My definition of High Intensity Training is: training to momentary muscular failure, with brief and infrequent workouts in which all variables are prescribed based on the individuals: goals, age, current fitness level, fiber types, personal preference, and past experience.

The purpose of strength training is to increase strength and lean body mass, NOT for training a specific skill or movement-that's called practice! People strength train for many reasons and there are many methods that work. For years, many trainers and coaches have had their clients and athletes perform Olympic lifts because they feel it will transfer over into the performance of their skill. Numerous studies have shown that the neurological transfer of skills is not optimal unless the skill is practiced EXACTLY as it is performed in competition. Therefore, performing power cleans because you play football is NOT optimal. Performing power-cleans will only get you better at performing power-cleans! Focus on increasing strength and lean body mass, and practice your skill exactly as it is performed during competition. 

2. Increase Speed 

Increasing the speed at which a skill is performed is another great way to improve power. Speed is primarily predetermined by the individual's genetic make up. However, that does not mean that you cannot improve speed by practicing the skill EXACTLY as it is performed in competition. A great deal of focus should be placed on perfecting the technique. By practicing the skill in this manner, you will improve neuromuscular efficiency, which will result in faster and more accurate performance. 

3. Increase Distance (flexibility/range of motion) 

Increasing flexibility is another way to improve power. By increasing flexibility, you increase the distance that force is applied which results in an increase in power. 

The safest and most effective method to increase flexibility is by performing full range of motion exercises and incorporating a sound stretching routine. 

Agility 

Improving ones agility is another way of optimizing performance. Agility drills should be SPECIFIC to the activity or event. For example, having someone do Plyometric jumps off of boxes is NOT specific to someone who plays basketball! Yes, a basketball player jumps, but not off of boxes. Having the athlete practice jumping from the floor would be much more specific to their sport. Always ask yourself, “What is the goal?” “Is what I’m doing going to give me the outcome I desire?” “Is it optimal?”

Cardiovascular and Respiratory Conditioning 

Increasing cardio/respiratory output and endurance is another factor that has a major impact on performance. This topic is one of such importance that it is beyond the scope of this article. In general, if you increase the individual's cardiovascular and respiratory output and endurance, there will be a corresponding increase in performance. Cardiovascular training should also be specifically geared towards improving the individuals conditioning in the metabolic pathway in which they compete or perform. For example, someone who plays tennis should primarily train at a slow to moderate pace and incorporate bursts of high intensity effort. Interval training would be a good choice for this individual. Keep the training specific to the individual. 

Sport Skill 

This is an area in which there is a lot of confusion among many athletes, coaches, and trainers. Skill acquisition and strength levels are two completely different things. Therefore, they should be trained separately, and with different methods. In order to optimize the performance of a specific skill or movement, it needs to be practiced EXACTLY as it is performed in competition. It has been shown that each activity or movement has it's own neuromuscular pathway, and that just because a movement is similar does NOT mean there will be a positive transfer or carryover of skill. In order to maximize performance the individual should attempt to perfect their movement or skill with endless hours of practice. The goal of practice should be to improve the technique, accuracy, and increase the speed at which the skill can be performed. This topic was addressed earlier in the section titled “Increase Force.” 

Genetic Potential 

This is the factor that I have found to have the greatest impact on human performance. Genetic potential is something many people overlook. Regardless of what methods of training I use, I will never be a world-class marathoner. I can train twice a week or I can train 5 hours a day, it still won't change the fact that my body wasn't designed to excel at endurance activities. I hear of too many coaches and trainers having people follow dangerous training programs in an attempt to drastically improve their performance. This is not to say that you cannot improve performance. When training yourself or a competitive athlete, always set realistic goals. As stated earlier, the best thing to do is utilize the most effective methods available and work hard! 

Differences between Functional Training and Machine Based Training 

Most, if not all of the so-called functional exercises, fail to supply constant and variable resistance. Most quality machines supply constant tension and variable resistance based on the strength curve of the particular muscle, and track proper joint function. 

For example, compare dumbbell bicep curls on a Swiss ball to a bicep curl on a quality machine (such as Hammer Strength.) While performing the dumbbell curl, there is no tension on the biceps in the bottom or top positions. The resistance is greatest when the dumbbell is perpendicular to the floor. The amount of stimulus is also decreased due to the fact that the individual must balance his/her self on the ball. While using a machine, there is constant tension on the biceps and the amount of tension varies during the exercise based on the strength curve of the biceps muscle. Which is going to make the individual stronger? Which is going to stimulate more muscle fibers in the biceps? 

In my opinion, machine based training is by far superior if the goal is to increase strength, and/or muscle tissue. Keep in mind that more muscle equates to a faster, stronger, and better athlete, providing they practice their specific skill or movement. 

This is not to say that functional exercises serve no purpose. There are benefits to functional exercise; just not as many as some people are lead to believe. Exercise selection and the training methods used should be based on the individual's goals. Instances where functional training may be effective would be in individuals who need to improve balance, stability, and neuromuscular coordination. Below is a chart that shows the differences between Functional Training and Machine Based Training. 

Startup Financing On the Rise

According to Pricewaterhouse Coopers, investment by institutional venture capitalists in startups grew from less than $3.0 billion at the beginning of the 1990’s to over $106 billion in 2000.  Although venture capital volume has retreated significantly since the economic “bubble” years of the late 1990’s, the present volume of around $ 19 billion per year still represents a substantial rate of growth. Venture capitalists will fund more than 2,500 high growth startups in the U.S. this year.  The growth in venture capital investing has given rise to a relatively new and expanding area of equipment leasing known as ‘venture leasing’. Exactly what is venture leasing and what has fueled its growth since the early 1990’s?   Why has venture leasing become so attractive to venture capital-backed startups?  To find answers, one must look at several important developments that have bolstered the growth of this important equipment leasing segment.

The term venture leasing describes equipment financing provided by equipment leasing firms to pre-profit, early stage companies funded by venture capital investors.  These startups, like most growing businesses, need computers, networking equipment, furniture, telephone equipment, and equipment for production and R&D. They rely on outside investor support until they prove their business models or achieve profitability. Fueling the growth in venture leasing is a combination of several factors, including: renewed economic expansion, improvement in the IPO market, abundant entrepreneurial talent, promising new technologies, and government policies favoring venture capital formation. In this environment, venture investors have formed a sizeable pool of venture capital to launch and support the development of many new technologies and business concepts. Additionally, an array of services is now available to support the development of startups and to promote their growth. CPA firms, banks, attorneys, investment banks, consultants, lessors, and even search firms have committed significant resources to this emerging market segment.

Where does equipment leasing fit into the venture financing mix?  The relatively high cost of venture capital versus venture leasing tells the story.  Financing new ventures is a high risk proposition.  To compensate venture capitalists for this risk, they generally require a sizeable equity stake in the companies they finance.  They typically seek investment returns of at least 35% on their investments over five to seven years.  Their return is achieved via an IPO or other sale of their equity stake. In comparison, venture lessors seek a return in the 15% – 22% range. These transactions amortize in two to four years and are secured by the underlying equipment.  Although the risk to venture lessors is also high, venture lessors mitigate the risk by having a security interest in the leased equipment and structuring transactions that amortize.  Appreciating the obvious cost advantage of venture leasing over venture capital, startup companies have turned to venture leasing as a significant source of funding to support their growth.  Additional advantages to the startup of venture leasing include the traditional leasing strong points --- conservation of cash for working capital, management of cash flow, flexibility, and serving as a supplement to other available capital.

What makes a ‘good’ venture lease transaction?  Venture lessors look at several factors. Two of the main ingredients of a successful new venture are the caliber of its management team and the quality of its venture capital sponsors.  In many cases the two groups seem to find one another.  A good management team has usually demonstrated prior successes in the field in which the new venture is active.  Additionally, they must have experience in the key business functions—sales, marketing, R&D, production, engineering, and finance.  Although there are many venture capitalists financing new ventures, there can be a significant difference in their abilities, staying power, and resources.  The better venture capitalists have successful track records and direct experience with the type of companies they financed.  The best VCs have industry specialization and many are staffed by individuals with direct operating experience within the industries they finance.  The amount of capital a venture capitalist allocates to the startup for future rounds is also important.  An otherwise good VC group that has exhausted its allocated funding can be problematic.  

After determining that the caliber of the management team and venture capitalists is high, a venture lessor looks at the startup’s business model and market potential.  It is unrealistic to expect expert evaluation of the technology, market, business model and competitive climate by equipment leasing firms. Many leasing firms rely on experienced and reputable venture capitalists who have evaluated these factors during their ‘due diligence’ process. However, the lessor must still undertake significant independent evaluation.  During this evaluation he considers questions such as: Does the business plan make sense?  Is the product/ service necessary, who is the targeted customer and how large is the potential market? How are products and services priced and what are the projected revenues?  What are the production costs and what are the other projected expenses?  Do these projections seem reasonable?  How much cash is on hand and how long will it last the startup according to the projections?  When will the startup need the next equity round?  These, and questions like these, help the lessor determine whether the business plan and model are reasonable

The most basic credit question facing the leasing company considering leasing equipment to a startup is whether there is sufficient cash on hand to support the startup through a significant part of the lease term.  If no more venture capital is raised and the venture runs out of cash, the lessor is not likely to collect lease payments. To mitigate this risk, most experienced venture lessors require that the startup have at least nine months or more of cash on hand before proceeding. Usually, startups approved by venture lessors have raised $ 5 million or more in venture capital and have not yet exhausted a healthy portion of this amount.

Where do startups turn to get their leases funded?  Part of the infrastructure supporting venture startups is a handful of national leasing companies that specialize in venture lease transactions.  These firms have experience in structuring, pricing and documenting transactions, performing due diligence, and working with startup companies through their ups and downs. The better venture lessors respond quickly to lease proposal requests, expedite the credit review process, and work closely with startups to get documents executed and the equipment ordered.  Most venture lessors provide leases to startups under lines of credit so that the lessee can schedule multiple takedowns during the year.  These lease lines typically range from as little as $200,000 to over $ 5,000,000, depending on the start-up’s need, projected growth and the level of venture capital support. The better venture lease providers also assist customers, directly or indirectly, in identifying other resources to support their growth.  They help the startup acquire equipment at better prices, arrange takeouts of existing equipment, find additional working capital funding, locate temporary CFO’s, and provide introductions to potential strategic partners--- these are all value-added services the best venture lessors bring to the table.

What is the outlook for venture leasing?  Venture leasing has really come into its own since the early 1990s.  With venture investors pouring tens of billion of dollars into startups annually, this market segment has evolved into an attractive one for the equipment leasing industry. The most attractive industries for venture leasing include life sciences, software, telecommunications, information services, medical services and devices, and the Internet. As long as the factors supporting the formation of startups remain favorable, the outlook for venture leasing continues to look promising.