At the Funding Post’s annual Internet/Service Provider pitching event at Credit Suisse on Madison Avenue last week, there wasn’t a lot of chit chat. That’s because the event had 450 entrepreneurs seeking millions of dollars from only 35 VCs and angels. With long lines at each of the tables, this type of format only allowed for 45 second pitches, which made it difficult to request referrals and contacts. At a quieter event, such as a cocktail party, suggestions and information would have been easier to obtain; here capital seekers were happy if they managed to cover 7-10 tables. A fortunate group of companies, that had purchased tickets to a separate pitching workshop earlier in the day, were let into the auditorium one hour before the showcase and managed to cover 10-15 tables before the rest flooded through the doors.
The entrepreneurs tried to approach a fund’s partner or principle first, knowing that they would be the decision makers on the investment committee. Many others ended up talking to an associate analyst, knowing that they were going to be lower on the ladder; still, having a good meeting with the associate got them one step closer to meeting a partner.
Many of them were surprised when they got to the front of the line and found themselves pitching to the head of a fund, such as David Blumberg of Blumberg Capital, Jordan Davis of Radius Ventures and Jay Levy, a partner at Zelkova Ventures whose offices were also on Madison Avenue. Irvin Barash, president of Vencon Management made the observation that, “New York City is the epicenter of venture capital in which most entrepreneurs that create a successful business start out here. It’s been that way culturally and sociological for hundreds of years.”
Some funds (for instance Connecticut Innovations) had requirements about location and required a physical presence. Some companies that were offered funding thought it might be a good chance for them to relocate. One fund had companies relocate to Philadelphia in order to get funding and hire new people – Originate Ventures was a fund that invested in companies located in Pennsylvania and the surrounding regions. I-Hatch Ventures, also involved in early stage capital, only invested in companies in the Northeastern U.S.
Several angels, also looking to invest $50,000-$1,000.00 over the life of the deal, included Jumpstart NJ Angels, a fund that had to-date had invested over $19 million in over 60 ventures in local technology and new media companies. Then there was Golden Seeds, unique from the other angels in that it only provides early stage and growth capital to businesses with women in leadership and ownership rolls.
Ben Wolf of Faster Pants, a new business that has a fashion algorithm that automatically generates outfits for men, was seeking angel funding. He was one of the lucky few who had the advantage of being let in early and so was able to speak to fifteen VCs, and eight of them asked him for his business plan or his pitch deck. He summarized his experience, “You just don’t know if you will get funding. You pitch; you do the best you can. The thing that encouraged me was that they were asking questions and it wasn’t just ‘let me hear your pitch and thank you very much.’ I spent at least 5 minutes with everyone I spoke with, and each angel or VC asked me a series of questions. Through all of this I got a great sense of confidence in regards to my pitch, and I got a real sense that what I’m doing at Faster Pants is unique and original and good and worth funding.”
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