Several entrepreneurs came to iEvening’s “Are You Fundable?” event last night to get feedback on their products. All of them involved technology or the internet. A lot of advice for the timid and not so timid presenters included the need for grit – the need to stick to their guns and argue their case even in the face of rejection. Alan Brody, CEO of Convean and organizer of the iEvening event, felt that there were two fundable possibilities out of the group. One was Keepskor, simplified game creation because it helped ad agencies make games. “The competitive environment warrants examination, and CEO Tristan Louis will have to drill down on that, but he is a proven serial entrepreneur.”
Brody also liked a company called Memorist that had “memory volts” and was a way to store valuable documents. “Theoretically it’s fundable because there is a huge need for this. But in order to make it work, they need to warrant it and do several demonstrations that show it’s safe. “
There were also a few unfundable startups. One was a make-it-yourself chocolate business called Voila Cholat from founder Peter Moustakerski. The other was Rodawg.com, high-class packaging and paraphernalia for marijuana. The CEO Josh Gordon explained how his startup was making smoking products for the medical marijuana marketplace. “I figured out how to leverage the cultural acceptance. We created a brand with better packaging for medical industry — we provide a more professional way to promote product instead of in a baggy.”
According to the feedback, both were in danger of being lifestyle businesses, which Brody explained had their own unique problems. “Neither of them had defensible products. They both have the possibility of reaching a mass audience, but the chocolate company needs to find a way to reveal some knowledge of chocolate that hasn’t already been tapped, and the marijuana company needs to show that they are offering extraordinary, early-stage access to a potentially explosive marketplace.”
He continued, “An investor would look at Gordon and say, ‘I’ll keep an eye on him because he is young enough and an obvious ambassador to an emerging marketplace.’ He has grit. He is pushing it and willing to fight. Moustakerski may have grit, but it’s not demonstrable in the chocolate world. It’s out of his business zone and he is at an age where you expect him to be working with his business pedigree, which is finance.
Brody’s colleague Mayra Ceja, CEO of Tiger Cub Advisors, gave slightly different feedback to the two entrepreneurs, “Only 2% of people get funded by angels and VCs. You need to have a product that gives investors a 100x returns. Things that are not VC friendly — like food oriented products — need to be pitched to very specific types of investors. And how do you pitch something that isn’t mainstream? There is a bias from investors and VCs – for instance, they don’t want to be associated with porn.”
John Ason, professional angel investor, had this to say about funding startups, “I’m looking for exciting new companies that can get into hyper-growth and I am looking for good ideas with passion. Passion is one of the key items I want to see in companies – something that I can relate to and get an emotional connection to.”
“Life’s a pitch,” added Ceja. “The whole idea is that you are always pitching as a startup or entrepreneur – new product, referrals, investors –so be clear on why you are pitching. Most businesses are not fundable so you have to fight for yours, defend it. Show them you’re passionate.”