Gregory A. Patterson Star Tribune
Wednesday, June 28, 2000
If you can't bring the venture capitalists to the mountain, then take the Minnesotans to the valley -- Silicon Valley.
That's what local technology entrepreneur Matt Noah is doing by arranging a conference to bring a number of Minnesota technology start-ups together with Silicon Valley investors and venture capitalists.
The aim is to give entrepreneurs what they often complain they lack: face time and consideration from the people who funded the start-ups of some of today's most successful dot-coms.
The conference also seeks to address what local observers have described as a dearth of investment capital available for local technology companies. Some Minnesota civic leaders believe that if the state's venture capital investing doesn't pick up rapidly, the situation might imperil the finely tuned Minnesota economy.
"The entrepreneurs in Minnesota indicated that there was a need for this," said Noah, CEO of NetSuds.com, a Twin Cities organization that sponsors events where investors and entrepreneurs can mingle. "We're not wringing our hands about this issue, we're doing something about it."
Noah is encouraging about 20 Minnesota technology start-ups to present their business plans at a conference Sept. 20-23 in Santa Clara, Calif.. He plans to include about 60 companies in the conference, the others coming from outside Minnesota. So far, Noah said he has commitments from 20 companies, half of them from Minnesota.
Originally, Noah had planned to include only Minnesota companies, but widened the field when he couldn't find enough local quality technology start-ups to appear.
The conference resulted in part from an e-mail he sent to about 120 of his local entrepreneur contacts.
About 50 of the entrepreneurs he contacted indicated that they would jump at the opportunity to present in front of Silicon Valley venture capitalists.
And, according to some of the selected presenters, it is a conference long overdue.
"Being in Minnesota has made the funding situation more difficult, both with the local investment community and with potential funders outside Minnesota," said Steven Knight, cofounder and vice president of software development for Ziga Systems Corp., a Golden Valley Internet software developer. Knight, whose company will present at the conference, said he has been disappointed with what he calls a lower than expected level of financial support for local technology ventures by local venture capitalists.
But Knight noted that Minnesota can be a tough sell for any venture capitalist. The problem is not a lack of technical talent, but a lack of business acumen in guiding and building technology start-ups, especially dot-coms.
Knight said he hopes to use the conference to showcase Ziga Systems' management talent to help it gain more capital. "We are actively looking for our next round of funding," he said.
Knight could be presenting to some real heavyweights at the conference, including representatives from Draper Fisher Jurvetson, which invested in Hotmail; New Enterprise Associates, which has $2.5 billion in capital under management; and the investment arms of Sun Microsystems and Intel Corp.
NetSuds is not alone in its attempt to solve the state's venture capital problem. "We have looked and continue to look at the issue," said Jane Brown, president of the Minnesota High Tech Association. "The data show that something's not working well here in Minnesota. We're not sure exactly what it is."
Jay Hare, a partner in the technology industry group of PriceWaterhouse Coopers, which does business and tax consulting for venture capital-backed technology firms, said he's not sure the NetSuds.com field trip can fix the problem. Hare said he wishes the initiative well, but he doesn't hold out much hope for success.
"I hope they'll bring back a planeload of money," he said, but he doubts it will happen. The businesses at the conference will be too diverse and not in a desirable development stage for many of the venture capitalists' tastes, he said.
Copyright 2000 Star Tribune. All rights reserved.