Posts Tagged ‘rockies venture club’

I always enjoy an evening with the members of the Rockies Venture Club, especially when there are investors speaking on panel.  Last night was no exception:  in a version of funding lightning-round, three companies seeking funding presented and were followed by notes and suggestions from three investors.

Lorenzo Carver, CEO of bpCentral’s Liquid Scenarios, was up first.  I loved his “aim small, miss small” philosophy for market share and his product, which provides deep analysis of financial information.  Frank Mendincino of Access Venture Partners had some great insights on Lorenzo’s presentation:

The three things he thinks about when considering a deal:  What problem is being solved?  How does the company in question solve it?  Why is their solution better than the other options?

Why companies need to break the rules and include a feature matrix comparing their companies against the competition:  Because it allows them to show why their company is better, not just state that it is.

Focus on conquering one market segment…then move on.  Keeping your initial segment small can allow you to have less initial competition and show your mastery more quickly.

Next up was Eric Remer, founder and CEO of PaySimple, a company that helps small businesses process payments.  He was able to sum up his business model (simplify and empower small business transactions) succinctly.  Jim Conboy of Wolf Ventures critiqued his presentation.

There’s nothing better than results.  Everyone talks about serving small businesses…it’s a very different thing to actually do so.

Your credibility is only as good as your communication.  Show how you nailed a particular market segment and whether you know when to cut your losses and move on.

Toot your own horn.  Your audience of investors will be skeptical.  It’s your job to win them over by pointing to your successes.

Keith Mountain of Spatial Corp. was last, but not least.  His story of a software company with a complicated past was a great view into the challenges that face a company seeking independence from a corporate entity (and the ups and downs any skilled management team will face).  Seth Levine of Foundry Group admitted he specializes in early-stage and seed investing, but was up for the challenge of critiquing Keith’s complex presentation:

Sometimes the cultural aspects of your firm are as important as monetary and management issues.  Still, focus on what makes your company unique.

Look forward, not backwards. Investors are interested in movement and momentum.

Highlight your competitors, even if it hurts.  Show their strengths and their weaknesses, then offset them with your company.

Look for what’s bright and shiny.  If it doesn’t belong to the exciting part of the story, don’t include it in your presentation.

Read more about the event at Rocky Radar.

Photo via eurleif

VOCO is privileged to be a sponsor of the Rockies Venture Club, one of the most interesting groups for entrepreneurs and venture capitalists in the area.  Last night I attended their (jam-packed) monthly meeting.  The theme was How To Give Wings To Your Fledgling Company:  Angel Investing In 2009, and the panelists — Kelly Burton, moderator, of Investment Avenue, Robert Fenwick-Smith of Aravaipa Ventures, and Rob Morrison of Coherent Investments, were on the ball.  Here’s a quick recap of the panel:

What’s the view for angel capital in 2009?  How has it changed from 2008?

Morrison:  We have lower risk tolerance.

Fenwick-Smith:  We can’t count on the money that’s been flowing around historically…angels are now focused on cash-flow positive businesses above all else.

What do you look for in a company before investing?

Fenwick-Smith:  I focus on near-term prospects in green technology.  Angel investors, unlike venture capitalists, can’t afford to play the numbers game.  We’re looking for companies that have a plan.  I find the obsession with exit to be formulaic — you have to think about how to create a business that pays dividends, not one that will be acquired.

Morrison:  As an angel, I’m motivated by the viability of a business and its team.  Is the entrepreneur bringing hard questions to me?  Do they understand and clearly state their own expectations?

What capital sources do you recommend?

Morrison: I like to see how far my dollar can be stretched.  Capital efficiency is key.  The support of friends and family is somewhat of a necessary endorsement in these times.  Support from a federal program such as Small Business Innovative Research grants can be key.

What makes entrepreneurs stand out during the due diligence process?

Fenwick-Smith: PowerPoints make no difference to me!  Polish doesn’t count…90% of the strength of a potential investment is in its people.  I’m looking for attitude, how they answer questions.  The figures are always wrong, but I accept that innate optimism and instead go with my gut.

Morrison: You have to remember that there’s no specific point in time where due diligence starts or ends.  It begins the second you meet for the first time.

Is Colorado still fundable?  Where does Colorado stand in the angel investment mix?

Morrison: The ecosystem for business still exists, but it’s harder to penetrate.

Fenwick-Smith: We’re in a climate right now that fuels startups.  Colorado is definitely a brighter spot for sustainability and organic products, and the big VCs come here often, which is a good sign.

Is there a hot industry or trend for investors?

Morrison: The hottest industry is the one in which you have the most passion or knowledge.  Still, I’m seeing growth in entitlement healthcare, military, and energy, especially with this new administration.

What are your recommendations for entrepreneurs?

Fenwick-Smith: Hunker down.  It’s gonna be a difficult year, no matter what stage you’re at.  It will take longer to receive your POs, and most businesses will either be affected by, or use, the recession, resulting in a slowdown.

Morrison: Go for partner wealth.  Look for money, look for help — and understand what it is you need.  Partner well and you’ll do well.

What’s the role of failure for entrepreneurs? Do you ever tell them to quit?

Morrison: It’s basically required. I’ve been in situations where plans have been reshaped to the extent that the founders want to quit.

Has the economy affected angel investors’ appetite for investment?

Fenwick-Smith: In my experience, it’s harder than ever before.  Why would I put money in an illiquid investment when today I could buy discounted or distressed real estate and turn it around?  It has to be the right project and right team, even more so today than ever before.

Morrison: The appetite for investment hasn’t changed, but the risk-to-revenue ratio has.  I’m now looking for profit versus exit.

Photo courtesy of Aunt Owwee

As marketing professionals, we see a TON of really, really bad business cards.  You know the ones:  they have VistaPrint logos all over them.  They list 20 phone numbers and no actual contact information.  Weird, mangled, or outdated imagery abounds.

We’re going to get a chance to evaluate business cards next week, both at the Boulder Business Trade Fair sponsored by the Boulder Chamber of Commerce (November 19, 5-8:30 pm) and the exciting Angel Capital Summit sponsored by the Rockies Venture Club, a group we are proud to sponsor and assist with all things marketing (November 21, 8 am-6 pm).

Here’s the scoop:  Drop your business card in our fishbowl and you’ll get a free business card evaluation, a special business card promotion a la VOCO, and a chance to win a fabulous prize.

Free advice, a fun and useful evaluation, and prizes?  People, it doesn’t get much better than that.