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... by Matt Noah Published: Saturday, September
23, 2000
Two dozen Minnesotans faced intense pressure as they tried to sell Silicon Valley venture capitalists on their high-tech ideas.
SHERYL JEAN STAFF WRITER
SANTA CLARA, CALIF.
Trying to sell someone on your idea for a business is no easy feat -- especially in 60 seconds flat. It's even harder if you're one of 50 entrepreneurs from young companies all trying to gain the attention of more than 30 big-name venture capitalists.
That was the scene at NetSuds' National Entrepreneur's Conference, a two-day event that lured about two dozen Minnesota companies here this week. Many of the entrepreneurs said they had been preparing for the quick sell for a week or two, practicing in front of mirrors, bouncing lines off family and co-workers.
``It's crystallizing down the essence of your message . . . and saying it in a relaxed, crisp fashion,'' said David Letsche, the chief financial officer of E-CityDesk, a Minneapolis-based virtual distributor for the home heating, electrical and plumbing industry. He rehearsed in front of his wife.
``It's been a challenge because you always want to add something else,'' Letsche said. On Wednesday, his speech was long. But by Friday morning he had pared it to under 60 seconds when his turn came.
The entrepreneurs lined up in front of the room and walked up to a podium to deliver their one-minute pitches, called ``elevator speeches.'' A giant stopwatch kept track of time.
``The closer and closer you get to the stage, your heart is beating faster and faster,'' said Jerry Hammond, founder of ChoiceTime, a Minneapolis online restaurant and takeout service.
The pressure was particularly intense because the flow of venture capital has tightened in the past six months and investors have become especially choosy about which companies they'll fund. Some entrepreneurs took the safe path in their presentations; others were a little more unorthodox.
``Hi, I'm Steven Friswold, chief executive of eBody.com, and my wife wants new breasts,'' was how Steven Friswold launched his pitch about the Minneapolis-based health and beauty site that focuses on cosmetic surgery.
Prakash Puram of iXmatch, a Minneapolis-based developer of software that matches job candidates with employers, called his business ``the mother of all matching engines.''
Wade Meyers, founder of Eden Prairie-based Interelate, which helps companies collect and analyze customer information to increase sales, focused on his company being ``the next big thing.''
What the entrepreneurs are pitching may not be what the investors are seeking. Many of venture capitalists who attended were interested only in networking systems, Internet infrastructure companies and services to speed up e-commerce. The venture capitalists had mixed responses to the forum's format.
``The 60-second format is curt, but not useful,'' said Don Wood of Vanguard Ventures in Palo Alto, Calif.
But Paul Asel of Telos Venture Partners, another Silicon Valley venture capital firm, said the format gave him a quick snapshot of each company that helped him decide which ones to pursue.
That's the whole point -- getting the attention of investors in hopes they'll want to learn more about the idea or company, entrepreneurs said.
At this conference, most companies were able to follow up their one-minute speech with a 10- to 15-minute presentation.
``This is exciting,'' said Mahau Ma of Trinity Ventures, one of the famed Sand Hill Road venture capital firms in Silicon Valley. ``You know, here in Silicon Valley, we tend to be pretty inward looking. We think we're the center of the universe. There are some good ideas here.
Several of the Minnesota entrepreneurs were pleased with the results.
For example, iXmatch, HotIM, PointCloud and FireSummit said they were able to arrange longer follow-up meetings with venture capitalists, a key step in landing financing.
``What I was told is you have to kiss a lot of frogs,'' said Toby Velte, chief executive of FireSummit, a St. Paul-based start-up that is developing a data traffic management system. ``You just keep going.''
Sheryl Jean can be reached at sjean@pioneerpress.com or (651) 228-5576.
