Tuesday, May 31, 2011
The Hindu : Business / Companies : A funding platform for entrepreneurs
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Small entrepreneurs in the IT space frequently run into funding problems because very often they do not start operations as industrialists traditionally do. Usually their starting point is an innovative solution to a problem, one that is simpler, more efficient and cheaper. But, since they are basically one-trick ponies, they invariably run into funding constraints. In particular, they hit roadblocks while trying to scale up their operations.
Funding innovation
Venture capital, angel investors or seed funds have all been around for a long while, catering to the needs of innovators. But one of the biggest problems has been that there is very little information available to both parties — the innovators and the venture funds — about the nature of innovation, about how the “solution” can be scaled up to fit a viable business model, and about how the innovation will pay for the investments. These imponderables, while increasing the risk perception of the investors, also threaten to effectively kill an innovative solution simply because the funder does not find it worthy of investment.
Venturesutra, a Bangalore-based company, recently established a platform to connect entrepreneurs directly with venture capitalists, seed funds and with angel investors.
“Entrepreneurs often struggle to find and reach out to the right investors directly and quickly,” said Abhijit Maheswari, founder, Venturesutra. The company, he said, aims to provide “a simple, easy, one-stop place to search and connect with prominent and active investors instantly.” Investors could directly source deals and efficiently manage financing in the “early” and “growth stages”, he added.
Stringent criteria
Mr. Maheswari said the company launched its public beta in March, became active in April and “gained traction” in May. Since credibility of investors was critical to the credibility of the entire operation, “we apply a set of stringent criteria on venture capitalists (VCs) who want to establish their presence on our platform.” Only those VCs who are registered with the Securities and Exchange Board of India (SEBI) are currently allowed on the platform. Mr. Maheswari pointed out that several VCs from China who wanted to be on the platform had not been allowed. “We wanted to only allow investors from India so that we can have a more rigorous check on their antecedents,” he said.
The platform now has 26 investors. Ten more investors may join in by the end of May, Mr. Maheswari said.
Venturesutra now has more than 200 start-ups and “growth stage” entrepreneurs — those who have already established operations but who are looking to scale up operations. While early stage innovators are those who are looking to attract investments of up to $0.5 million, “growth stage” businesses are those whose requirements range from about one million dollars to about $10 million.
‘Offline mode'
Mr. Maheswari pointed out that the focus on due diligence required Venturesutra to do a lot of work in the “offline mode.”
“In that sense, we have established more than just a platform in which the two sides merely conduct business.” He said the due diligence was critical for the long-term viability of the platform.
Revenue model
How does Venturesutra plan to earn revenues to stay afloat? Mr. Maheswari said innovators who land on the platform have two options. They could either reach out to all potential investors through a “public deal” or they could be selective, reaching out to specific investors who may be interested in their business plan.
While the “public” option was free, the selective approach would require entrepreneurs to pay $100 for three months. Venturesutra does not charge anything for investors to operate on their platform.
Mr. Maheswari, who had earlier been with an investment bank, said the model may be “fine tuned” in the days ahead.
“To be honest, I did not know whether this model will work, but we needed a seamless platform that would also keep costs low.” He said most of the deals done so far were for about one million dollars each.
Mr. Maheswari said the idea had been around for some time. He pointed out that a few years ago some others did try it, but failed.
“They probably timed it wrong,” he remarked. Venturesutra's focus on small entrepreneurs was probably what would be a “key differentiator”, Mr. Maheswari added.
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After 10-year hiatus, angel investors resume meeting in Sausalito - Marin Independent Journal
Representatives of five high-tech startup companies, three with roots in Marin, were given 15 minutes each Tuesday night to make their pitch for investment capital to members of Bay Angels, a Sausalito-based group of angel investors.
This high-tech version of "American Idol" returned to the Spinnaker Restaurant in Sausalito, where Bay Angels held its meetings during its previous incarnation, from 1998 to 2001. Bay Angels re-launched this week, thanks to the efforts of Roger King of Mill Valley, the organization's original founder. King is founder and chief executive of Chief People, a Sausalito-based high-tech recruiting company.
King said the primary reason he chose to revive Bay Angels now is "the market is right."
"Valuations are reasonable," King said.
Gone but not forgotten are the hyperbolic days of the dot-com bubble, when companies such as Pets.com could demand multi-million-dollar valuations based largely on their URLs, King said, referring to the Uniform Resource Locators that serve as the addresses of web pages on the Internet.
"Now companies are coming to us, and they're beyond the launch stage. They actually have revenues," King said.
Angel investors are typically affluent individuals who supply startups with capital until the companies are successful enough to attract the attention of venture capitalists, who typically manage the pooled money of others. King said the investors
who attend Bay Angels meetings, usually by invitation, share research on companies but don't pool their money.AdvertisementKing said the companies that Bay Angels invites to make presentations will not be charged for the privilege. He said some angel groups charge fledgling companies as much as $6,000 to make a single pitch.
"We would rather make money alongside the early stage companies rather than take money from them," King said.
King said Bay Angels complements the executive search work he does with Chief People.
"These companies need two things: funding and people," King said. "We've always provided them with people. I thought if we could also supply them with funding, it's good for everybody."
Jamie Pardi of Novato, the founder of Gaga Sports & Entertainment, one of the five companies that delivered pitches Tuesday night, said he is looking for angel funding to tide his company over until it gets its first round of venture financing.
Gaga Sports helps professional sports teams use the Internet to collect demographic data on their fans and employ the information to boost ticket sales and product sponsorships. Gaga Sports' clients include the San Francisco 49ers, Los Angeles Lakers, Utah Jazz and Houston Dynamo.
Pardi built his company with $500,000 in previous funding from angel investors. Pardi said, unlike the founders of many other companies, he never sought investments from friends or family.
"I went into this thinking I never wanted to change Thanksgiving," Pardi said. "Because if things went really well all they'd want to talk about at Thanksgiving is how well they're doing, and if things went bad — it doesn't make good conversation when you're watching the Cowboys game."
Pardi said telling his company's story to investors in 10 minutes, followed by five minutes of questions, was no problem for him.
"I've done it before in one or two minutes," Pardi said. "It really helps me to get my story concise and to the point."
Pardi faced some stiff competition Tuesday night. One of the other five presenters was Nolan Bushnell, the founder of both Atari Inc., maker of the seminal video game Pong, and the Chuck E. Cheese's Pizza-Time Theaters chain. Bushnell is seeking funding for Waba, a social network and mobile game platform company.
Two other companies whose founders live in Marin — Hopscout and PhoneTell — also made presentations Tuesday night. Hopscout is an online store for children's products that features daily sales. PhoneTell provides a search engine that can be embedded in cellphones and other mobile devices. The search engine uses Global Positioning System technology to find companies near the user that can immediately supply the product or service they need.
The fifth company that presented Tuesday night was Global Mojo, a San Francisco-based company that makes a free web browser available to the public. Companies pay Global Mojo to have their products and services listed at the top of searches. Global Majo shares half of its profits with nonprofits, charities and schools selected by the browser users.
King said Bay Angels will be "geographically agnostic" looking at promising companies no matter where they're located. But he said it should, nevertheless, benefit the local economy.
The Marin Economic Forum, a public-private partnership created to foster local economic growth, has identified companies engaged in multimedia/digital arts, engineering and business software, environmental technology and biotechnology as the core technologies vital to Marin County's economic future.
Robert Eyler, the forum's interim chief executive, said, "We wholeheartedly welcome the return of the Bay Angels and applaud its focus on enhancing Marin's economic vitality."
Contact Richard Halstead via email at rhalstead@marinij.com
Jg
Seed Capital From Angel Investors: Pravin Gandhi, Seedfund – Mumbai, Bangalore, New Delhi, India (Part 1) | Sramana Mitra
--> Tags: -->Seed Capital From Angel Investors: Pravin Gandhi, Seedfund – Mumbai, Bangalore, New Delhi, India (Part 1)
Thursday, May 19, 2011 No comments
By guest authors Irina Patterson and Vandana Upadhyay
I am talking to Pravin Gandhi, a founding partner at Seedfund, which is one of the India’s leading early-stage venture capital funds, with operations in Mumbai, Bangalore and New Delhi.
Seedfund was founded in 2006 by Bharati Jacob, Mahesh Murthy, and Pravin Gandhi. In 2010, they raised Seedfund II, which is a $54 million fund. The fund also runs its own incubator.
Irina: Hi, Pravin. Let’s start with your personal background. Where are you from and where did you receive your education? How did you arrive at this point in your life?
Pravin: I was born in Mumbai and did my schooling here. I did my undergraduate work at Cornell and then returned to India after I finished my undergraduate degree. Then I worked in a couple of companies because I really wanted to be an entrepreneur.
My choice was that I had to understand what it meant to be an employee and also what the lay of the land was so that I could be a smarter entrepreneur. That is what I did for four years from 1968 to 1972. I found some co-founders and started a company in technology in 1972. It actually started as a distributorship for Digital Equipment India Limited, Digital Equipment Limited’s Indian subsidiary.
Over the next 17 years, we grew that company and added other disciplines within that group instead of just being sales distributors for Digital. We added a site capability and system integration capability, and we started software exports.
Since Digital did not have a great presence in PCs, we also started manufacturing and selling computers. We did that till 1998, and at that point we formed a joint venture with Digital Equipment and went public and raised money.
I served on the board of Digital Equipment India Limited for four years and also ran their sales and marketing for four years till such time as our obligations as part of the joint venture agreement. When we started, the equity of the company was 40% with Digital, 30% with us and 30% with the public. There was an agreement that Digital would acquire more than 50% equity, so when Digital acquired the stake, I figured it was time to move on.
I went back to the parent company, Hinditron, and ran a domestic software services company to find develop customer applications for Indian customers, and we run this till about 1996. It didn’t work the way we all thought it would, so I shut it down and then I decided to become an angel investor.
I did that for three years and I invested in three companies, two in India and one in Singapore. I made money. I discovered that all my contemporaries in the computer hardware and software business were also moving on and they were also doing the angel investing.
It occurred to some of us that instead of doing it individually, why don’t we start a fund and with the help of folks in Silicon Valley, such as Kanwal [Rekhi], Jagdish [Bhagwati], [prominent Indian-born Silicon Valley entrepreneurs], we started a fund called Infinity in 2000, made some investments, saw the ups and downs, the bubble and the bursting of the bubble, but still ended up returning nearly two times on the investment. We returned the money about 2005. There were some companies that were left over that got disposed of, and one finally closed in 2009.
In the meantime, by 2006, all the major returns of Infinity were over and my earlier partners didn’t want to do early-stage investment. But it continued to be my passion, and we had also learned a lot of lessons during Infinity of how not to get carried away, how to be smart about spotting bubbles, and how much money it needs to get entrepreneurship going in India.
I found two partners, one by the name of Mahesh Murthy, he was doing the same thing at the time and also doing business plan contests along with me and we were judges. I felt that he too had enough passion in India in this early-stage business. Then, there was a woman by the name of Bharati Jacob based in Bangalore who worked with me in Infinity, and she also joined as a partner.
We debated for a while and finally agreed that we should raise the $50 million seed stage fund with the theory that for between $750,000 and $1.5 million you can build a decent company and then be able to find additional money from other later-stage investors.
This segment is part 1 in the series : Seed Capital From Angel Investors: Pravin Gandhi, Seedfund - Mumbai, Bangalore, New Delhi, India
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Monday, May 30, 2011
Bryn Mawr Offers Entrepreneurship Workshop During 2011 Fall Break | Bryn Mawr Now
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Sunday, May 29, 2011
Get Creative with LinkedIn’s API
One of the most obvious differences between LinkedIn and its social media rivals, Facebook and Twitter, is its reach. It’s not easy these days to wander onto a Web page that doesn’t invite you to send a link to your Twitter followers or share the page with your Facebook friends. LinkedIn buttons? Not so much.
That might seem surprising. LinkedIn is popular both with users, who now number more than 100 million worldwide, and with investors. (The company’s stock finished up 109 percent on its first day of trading recently, the fifth-largest opening rise since the bursting of the dotcom bubble.) But it also has a lot to do with LinkedIn’s own slowness to make easy site integration available.
That, at least, is now changing. The relaunch of the site’s developer platform with an open set of APIs and the adoption of OAuth has now made integrating LinkedIn easier than ever for developers. “In Share” buttons are now beginning to appear on Web pages, competing for space and clicks with Facebook’s Like and Twitter’s Tweet. (You can see one in action at the top of this page on a blog about recruitment).
LinkedIn Beats Facebook on Mashable
Mashable has been one site quick to make use of the buttons. The tech blog places a Facebook Like button next to its articles, as well as icons for Twitter, StumbleUpon, Tumblr and, on some pages, LinkedIn. A quick look at the frequency with which those buttons are used shows that pages typically pick up more Tweets than LinkedIn Shares, and more Shares than Likes. This post about Groupon, for example, had picked up 1,209 tweets eleven hours after it went up, compared to 55 Likes and 210 LinkedIn Shares. This post about marketing on Facebook, however, generated 256 Shares in less than half an hour, which might suggest that users like to show potential employers that they’re up to date with social media marketing techniques.
The site’s use of LinkedIn though isn’t limited to sharing buttons. Mashable has also integrated LinkedIn with Mashable Follow, its “social sharing and content curation platform,” a move only made possible by LinkedIn’s recent adoption of OAuth.
“We are able to authenticate users using our existing OAuth support framework,” Chris Heald, Follow’s lead developer told readers. “Once users are authenticated, we can use their authorization tokens to make calls to the LinkedIn API to easily conduct the shares.”
Mashable though isn’t the only site to make use of LinkedIn’s new openness. Other sites are lining up to do the same, and in various ways. Behance, a portfolio platform for creative professionals, declares that having uploaded their work, members can “at the touch of a button” broadcast their work on Facebook and Twitter, “as well as sync with LinkedIn.”
LinkedIn Sells Expertise by the Minute
Elegant.ly is also aimed at creatives, this time focusing on new designers. The service hopes to match starting designers with new start-up companies in a kind of pauper’s marriage. It uses LinkedIn’s OAuth integration to enable new members to sign in without having to complete pages of registration forms.
Both of those sites though only make use of LinkedIn’s smart new API to help the networking service do what it’s supposed to do more efficiently. LinkedIn’s main role has always been to help people find work; both Behance and Elegant.ly make job-seeking a little easier by focusing on one niche industry and making the information available on the site readily accessible to people who might be looking to hire professionals in those industries.
MinuteBox is a little more creative. This service also mines LinkedIn’s database to bring professional help to people who need it, but it offers not skills but knowledge. That’s a fairly unique approach and an interesting twist on the usual way in which professionals market themselves. Instead of pitching for full-time or freelance jobs, MinuteBox allows LinkedIn’s members to offer professional advice for which they can charge on a minute-by-minute basis. The information is delivered through video, audio or text chat and the interaction conducted through MinuteBox but the trust is built through an impressive portfolio on LinkedIn.
Move away from LinkedIn’s main function as a way for people with skills and knowledge to sell their expertise, and things start to get a little murkier, even with LinkedIn’s new API. SociallyApp is a smartphone app that tries to integrate a phone’s functions with all of the information streaming through multiple social networks. Those networks include Facebook and Twitter, of course, but also draw on Foursquare and LinkedIn. The app collates the data, adding the latest Facebook picture to contact lists, for example, or placing birthdays on calendars.
But it’s not easy to see what the benefits might be for users of LinkedIn, beyond adding loose connections to a contact list and forcing the phone user to scroll through more names than he’d like before he can call home.
The challenge for LinkedIn — and for developers hoping to make use of its API — is that the site is not the kind of news streaming service that has made Facebook and Twitter so valuable. (The former for news about friends and family; the latter for updates and chat from industry insiders.) It’s too formal for casual browsing and the reasons for networking on the site are too obviously commercial for the kinds of loose chat that can make even Twitter so much fun. While Facebook is like chatting with friends and Twitter is hanging out at the watercooler, LinkedIn still feels like the kind of professional networking occasion at which everyone wears name tags and tries not to eat with mouth full of canapés.
None of that is to say that LinkedIn isn’t useful. It clearly is as its 100 million users and happy investors will tell you. It’s a valuable service that can help match the career-minded to new opportunities and businesses to talented individuals. Whether it can compete with the flexibility of Twitter and Facebook, even with its new API, remains to be seen.
Related posts:
Jg
Thursday, May 26, 2011
99designs gets $35 million US boost from angel investors
Some big-name Internet entrepreneurs are pumping $35 million U.S. into one of the web's hottest crowd sourcing sites - a graphic design service co-founded in Vancouver.
The company, 99designs, is the world's largest online marketplace of its kind - a $1 million-a-month venue where businesses looking for logos and web designs can affordably tap the skills of more than 100,000 graphic designers worldwide who bid on contracts posted on the site.
Many independent graphic designers worry that this kind of outsourcing threatens their livelihood, but the site has struck a chord with small businesses on tight budgets. According to a news release announcing 99designs has played host to more than 75,000 design contests since its founding in February 2008.
The $35 million first-round investment announced on Thursday puts two members of lead investor Accel Partners onto 99designs' board of directors.
Others investors include some Internet heavy hitters.
They are: former eBay executive Michael Dearing (formerly with eBay and now leading early-stage investor Harrison Metal Capital), Dave Goldberg (CEO of Survey Monkey), Flickr co-founder Stewart Butterfield (now leading online game developer Tiny Speck), and Anthony Casalena (CEO of Squarespace web design service.)
99designs is the brainchild of Vancouver's Matt Mickiewicz and Mark Harbottle of Melbourne, Australia - who previously established sitepoint.com, an information provider for professional web designers.
"The new capital will be invested in international expansion, platform development, community initiatives like design scholarships, and aggressive hiring in San Francisco and Melbourne," 99designs announced.
"We really think there is a tremendous opportunity to grow the business," Mickiewicz said in a telephone interview. "We've established a business model. We've established the economics of how the company and the marketplace works.
"Now it's really about scaling, and we need money to scale."
He said Accel has "a real knack for helping business grow and scale up really quickly."
Accel Partner Andrew Braccia said in the news release that "Accel Partners has a history of investing in online businesses that cater to the ever changing needs of small business owners and independent professionals.
"99designs has quickly become a global market leader in its category, providing an invaluable service to its customers and their global community of design professionals. We are thrilled to have the opportunity to assist in the company's next phase of growth."
Dearing said in the release that "99designs caught my attention when I realized that nearly every one of the early stage companies and entrepreneurs I work with was turning to them to get great design work done. The team has created a marketplace that is easy for companies to get on-board with, and is also a boon for designers who can go after any of the hundreds of jobs open at any one time."
Harbottle said in the release that he's "thrilled that Accel see the same potential in 99designs that we do. This obviously presents a fantastic opportunity for the 99designs team, but I'm most excited about what we have in store for our loyal community of designers, and the hundreds of thousands of businesses around the world who use 99designs.com. I'm looking forward to the next chapter."
Patrick Llewellyn, 99designs CEO said in the release that the financing "pushes forward with expansion in several key areas."
We now have the benefit of our talented and dedicated team, coupled with the best technology investors around. The board and shareholder advisers we have in place provide us with exceptional experience and insight to help guide our future growth."
© Copyright (c) The Vancouver Sun
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Startup Funding In March Doubles to $260M; Internet Edges Out Healthcare
Spring has sprung for the state's tech and life sciences startups. After raising a slim $130.9 million in February, things really warmed up last month. Thirty-nine startups pulled in a whopping $260 million in equity-based funding, with a few sectors in particular taking sizeable chunks of cash, acc
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How to Become an Investor Magnet
This is the true story of ‘Ryan’ (not his real name). A serial entrepreneur with no qualifications and a very limited understanding of financials or launching a startup. Ryan, however, is an entrepreneur with a deep understanding of people, who consistently and easily raises hundreds of thousands of dollars from very savvy, experienced investors.
I first came across Ryan six years ago when he approached me to help him create some pitch materials. He explained that he had persuaded 2 investors (both bankers) to invest $500K in his IDEA (no prototype, company or team) but that one of the investors had asked to see details of his business model and financial projections.
Initially, I was sceptical as to whether the potential investors had, in fact, actually committed or had simply expressed an interest in learning more about Ryan’s idea.
Sensing my scepticism, Ryan called one of the bankers on his cell phone, explained I was helping him put together the information that had been requested and asked him to confirm to me that he was investing. Sure enough, banker X confirmed that both he and banker Y were investing but would appreciate understanding a bit more detail. About a month later, Ryan received the investment.
I subsequently helped Ryan raise nearly 2 million dollars over the next two years, though it’s fair to say that my role seemed limited and that all I was doing was effectively confirming, in writing, deals that Ryan had already successfully pitched and negotiated.
Over time, through observation and discussion, I came to understand that although Ryan is a very disorganized, creative entrepreneur, he does use a highly effective ‘system’ for securing investors. This is how Ryan does it.
1. Research – Ryan goes out of his way to identify potential angel investors. Typically these are people who have some capital and are involved in business or finance. Ryan’s research method is real world as opposed to virtual. He is a ‘social butterfly’ continually making new connections and expressing a deep interest in these people and their friends.
Slowly but surely, Ryan builds up a picture of those people who are likely to be potential investors.
2. Target Early – Once Ryan identifies his prey (potential investors), he puts himself into situations where he will meet them. This can be anything from the opening of an art gallery to a mutual acquaintances party. Ryan is very determined and resourceful and always seems to find a way to cross the path of his targets.
Ryan doesn’t wait until he is desperate funding. He describes himself as being in ‘perpetual funding mode’. By lining investors up in advance, he effectively ensures that he is able to access investment as and when he needs it.
3. Seduce – Applying the same principles that most of us use to persuade someone to come on a date, Ryan presents his best side to his target. In addition to being upbeat, witty and charming, Ryan expresses deep interest in the potential investor. He makes the encounter about them and makes every effort to ensure they enjoy the experience of meeting him. Far better than pitching an investor at a urinal!
Though Ryan has the same worries and stresses that every entrepreneur does, he never reveals these to his target. He also never talks about his latest venture unless specifically asked. Social protocol means that he is always asked about what he does.
4. Convey Success – Ryan is a master at making dry toast sound mouth- watering. When asked what he does by his targets, he always makes it sound as though he is already successful. While being careful never to mislead, Ryan focuses on the positive and any successes that he has already achieved as well as others who are interested in his venture. Even when talking of potential challenges, Ryan focuses on the solutions.
5. Engage – Having already worked out what makes his potential investor tick, Ryan focuses on those points that are most likely to appeal to them. He always asks for their opinion and lets them know he values it. Importantly, however, Ryan never mentions that he is looking for investment unless pressed by his target.
6. Enchant – In his latest book ‘Enchantment’ Guy Kawasaki discusses the importance of enchantment to business success. Ryan understands this principle well and makes his ‘investor encounters’ magical, mesmerising experiences using the power of story and likeability, while focussing on how his venture will make a difference to the lives of others. If you want to enchant others, I strongly recommend you read Guy’s book.7. Hook and Leave – Though somewhat counter intuitive, Ryan usually leaves the encounter at the point he is certain his target’s interest is at its high point. This seems to be a variation on ‘playing hard to get’ which tends to have the desired effect with the target making contact a few days later with a request that Ryan let them invest.
Conclusion
Ryan’s way may not be for every entrepreneur. But Ryan has proved time and time again that it works. Even during today’s tough economic climate. Many of the techniques and strategies Ryan’s uses are the very same advocated by Angels and VC’s in their blog posts and elsewhere.
At the end of the day, Ryan is focussing on building relationships. People and relationships are the most critical factors in investment. This is why investors consistently say that the team is the most important factor in a deal. It is also why when talking about an investment, investors will often start out by saying that the founder is a great person with lots of integrity.
Even if you do half of what Ryan does, your path to getting funded will be much smoother.
Jg
BusinessWire Angel Venture Forum Coming to Washington, D.C. to Connect Entrepreneurs with Investment Capital and Training, Announces Call for Submissions
The application process opened on May 1. All high- and low-tech early stage, as well as expansion stage, companies seeking up to $3 million in capital are encouraged to apply to participate. The application deadline is August 1, 2011. All companies seeking angel funding or investor mentors should submit a business proposal online at: http://www.angelventureforum.com/id20.html and click Submit Application.AVF-D.C. features five months of education and training programs for every applicant that applies. There are no membership fees – only a $150 application fee for companies is required, which includes unlimited access to all AVF education and training sessions, as well as direct feedback from experienced investors. The program formally kicks off July 12, with the AVF Academy, a day-long education, training and networking session that prepares entrepreneurs on how to most effectively find and work with angel investors. The program culminates with a select number of companies presenting their business plans to accredited private investors on October 18 at the National Press Club in Washington, D.C. Click the following link to view the list of events: http://www.angelventureforum.com/id33.html.
Unique Program
The Angel Venture Forum provides a unique, all-in-one education, networking and training program that screens, prepares and grooms best-of-class entrepreneurs for accredited investors over a five month period prior to the Forum. Fifty semi-finalists will be selected from an expected pool of 150 company applications by a panel of active angel investors after a day of live presentations by the companies on September 8. Ultimately, 30 companies will be selected and groomed to further present their company and to network at the Angel Venture Forum on October 18.
According to Ryan Meinzer, founder and CEO of PlaySay.com, a language learning technology, AVF provided him with real world guidance on how to court investors. “Working with AVF, I learned investors are interested in traction, the product’s appeal, an experienced team and social proof,” says Meinzer. “This helped us to effectively scale with the help of trusted advisors.” The company now employs five people, including programmers and a linguistic specialist, product people and metric specialists. One day this month, PlaySay saw more than 500 users sign up for their service.
Rooted in Success
Valerie Gaydos, angel investor, founder of Capital Growth, and former Director of the Baltimore Technology Council, ran the Angel Venture Fair in Philadelphia (no affiliation) for the past six years, making it one of the most prolific angel venture networking programs on the East Coast. Since its founding in 1998, more than $30 million has been raised by emerging growth companies in first round and follow-on capital.
When asked about her change in venue from Philadelphia to D.C., Gaydos said she was approached by several colleagues in the angel community about bringing her network to Washington D.C. “It became apparent that nothing like this exists in the greater Washington, D.C. market,” says Gaydos. “There is a robust entrepreneurial ecosystem, many active angel investors groups, several private investors and many valuable supporting organizations, but there is no organization with the scale and scope of resources to bring many of these interest groups together in one place in this sort of way. We simply wanted to bring the value of our existing regional networks to D.C. so that we may connect strong companies with financial and experiential resources, attract more capital and generate positive results.”
Robert Miller, Chairman and Managing Partner of Flash Forward Ventures and member of the boards of several organizations including Geostellar and 20twenty Strategic Consulting, says both entrepreneurs and investors will be rewarded. He points out that upwards of 78 percent of the companies that had presented at past AVF events have gone on to raise capital. “We are proud of that and the fact that we have such a great group of active investors who are part of the selection process,” said Miller.
Treating Entrepreneurs with Respect
Growing a start-up into a scalable business takes time, money and resources. While the Internet provides access to a wealth of information, experts who have grown successful companies point out that access to and engagement with professionals who have the experience and expertise to scale a business is critical.
Lenard J. Harac, PhD, a partner of the Angel Venture Forum, and a consultant who shows small businesses how to build successful enterprises, says the value of this program extends well beyond a financial investment, “There is no shortage of organizations and events designed to help start-ups,” says Harac. “What sets the Angel Venture Forum apart is we provide more than money; We set up entrepreneurs to succeed well after the event ends. We stay with them to make introductions to advisors and strategic partners that not only provide direction, but put the business owner on a glide path for success.” Harac continues, “Entrepreneurs are not necessarily good networkers. We help identify resources to grow their company and stick with them. We don’t leave them at the door.”
Fulfilling a Need
“There is definitely a need in this market,” says Alex Castelli, Principal at the Reznick Group in Vienna, Va. “It is still difficult for a start-up to get bank financing. And in most cases, venture capitalists find these companies too small to take an active interest in.” Castelli points out that entrepreneurs benefit from more than just financing alone. “It’s not just the money; The mentoring by these investors is critical to these companies. Angels are successful entrepreneurs who have been there, done that. They commit themselves to groom and grow these companies who lack the experience.”
“Starting a company is about surviving long enough to be relevant,” says Dean Rutley, a venture capital attorney with Womble Carlyle in Tysons Corner, Va. “Having access to sophisticated, experienced angels who provide insight and advice increases a start-up’s odds of being one of the ‘survivors.’ Net/Net: participation in a holistic event such as Angel Venture Forum, with its five-month long education and investment presentation program, is one of the smartest ways that a start-up entrepreneur can gain access to those angels.” Adds Rutley, “Do the math and it’s easy to see why entrepreneurs should find the AVF an attractive forum to participate in and the reason why Womble Carlyle chose to become a founding sponsor.”
Statistics suggest a regional start-up group could help spur deal making. According to a PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ report, first quarter 2011 data shows investment deals in start-ups in Maryland dropped from 18 to 16, and the amount of investment fell from $89 to $86 million. Deals in the District of Columbia inched up from two to three, but the amount of investment plummeted from $26 to $7 million. One bright spot was Northern Virginia, where transactions increased from 12 to 19 and amount of investment increased from $90 to $102 million.
Gaydos also pointed out that it is a great time to start a company, despite the lingering recession. “While starting a business or going out on your own, especially in a recession, may seem scary and a bit counterintuitive, there is really no better time than the present to take a risk and bet on yourself,” says Gaydos. “Starting a business during a recession, even when credit is so tight, forces a company to be clever, frugal, committed and focused. Recessions encourage entrepreneurs to examine more closely the risks, competition and all possible pitfalls of the new business before starting it, thereby often producing a better business than if credit was free flowing. If the company can survive in tough times, they will thrive in good times.”
For more information about the Angel Venture Forum or to arrange interviews with sponsors, investors and entrepreneurs attending 2011 Angel Venture Forum, please contact Tony DeFazio at DeFazio Communications via email: tony@defaziocommunications.com or via telephone: 484-532-7783.
About the Angel Venture Forum
The Angel Venture Forum D.C. (AVF) is a loose-knit group of active private investors, leaders, entrepreneurs and professionals with a shared vision to encourage the growth of emerging business in the Mid-Atlantic region. The mission is to discover and develop strong companies for the region and to connect them with resources – financial and experiential – provided by angel investors, mentors and resources that will assist companies to be ultimately more successful in the attraction of capital and positive exits. For more information, please visit the AVF website: http://www.angelventureforum.com/index.html, or find them on Facebook, Twitter and LinkedIn.
for Angel Venture Forum
DeFazio Communications, LLC
Tony DeFazio, 484-532-7783
tony@defaziocommunications.com
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Tuesday, May 24, 2011
Free Directory of Angel Investors
How to Meet Angel Investors for Starup Capital Angel investors finance far more companies than venture capitalists and the good news is that there's probably an angel investor group near you. To meet them about providing you with startup capital, you will need to contact the local network chapter
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Lack of venture capital funding holding Canadian tech firms back from competing globally | CanadianBusiness.com
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