VenturePresentation.com    |    Home    |    About us    |    Contact us    |    Documents    |    News

VenturePresentation.com attends InfoTech 2001

Below are some notes from Venture Captial (VC) and Entrepreneurial panels at InfoTech 2001, a large IT conference in Chapel Hill, NC.  Email us at info@venturepresentation.com if you have questions or need additional information. 

VC Notes

15 years ago a VC would have one to two portfolio companies per General Partner. Today, it is more like seven or eight portfolio companies per General Partner.

One way to get VC’s attention is to pitch them on an idea how your firm could partner or combine with one of their portfolio companies. 

To highlight the importance of referrals, one large, well-known VC mentioned they had made only one investment in 20 years in a company with a business plan that came to them through the mail without a referral.

Take the capital if you can get it.  Valuations are lower than they were a year ago, but VCs still want to make sure management teams have incentives to grow the business. 

A company with a large number of potential customers in beta test is a red flag for VCs.  Demonstrating your product works is important, but signed deals are obviously much more important. 

Execution

When large companies are buying products from smaller companies, larger companies are doing company viability tests. Smaller companies have to disclose cash balance and current sales information.  Company's VCs are now going on sales calls to assure large customers they are behind their company.

Ways to mitigate company viability tests:

• Demonstrate you are an established company with extensive resources.
• Have a professional and experienced sales force.
• Have customer references.
• Have a professional looking web site.
• Do not tell customers you are looking to raise money.

Potential customers will be less likely to undertake a company variability test if you have a professional sales force, customer references and excellent technology. 

One possible solution to a company viability test for software companies is to put code in escrow.

Sales and Marketing

When it comes to marketing, aggressively segment the market to focus only on potential customers that might have a strong interest in your product. 

Your sales force will be the best marketing channel for your firm in talking to potential customers. 

You do not always need to pay to be an exhibitor at trade conferences.  Send a sales person and seek out the players you hope to sell to or partner with. 

Try to recruit the sales person with the large rolodex you do not think you can get instead of a few marginal sales people. 

Overall

Focus on your customers and make your solution a "need to have" instead of a "nice to have" product.  Enterprises are looking to buy solutions that ease points of pain.  VCs have capital to deploy, it is just harder to get their attention today with their focus on their portfolio companies.