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VenturePresentation.com attends Money & Markets 2002
Below are some notes from Venture Captial (VC) and Entrepreneurial panels at Money & Markets 2002, a large Entrepreneurial conference at Research Triangle Park (RTP) in North Carolina. Email us at info@venturepresentation.com if you have questions or need additional information.
This was the most over-dressed Entrepreneurial conference we had ever been to. Its just another sign the economy is still very weak and the suits come out when times are tough.
One VC panel noted that liquidation preferences were becoming standard in term sheets for companies seeking 2nd and 3rd rounds of funding. Once VC called deals with three to four times liquidation preferences as "toxic capital."
VCs are still spending a large majority of their time trying to raise capital for their portfolio companies as opposed to looking at new deals. Many VCs predicted 2002 would be a bad year for Venture Capital investments no matter what the NASDAQ in 2002.
CIOs are only buying IT solutions that reduce costs. If a solution increases revenue its a bonus, but cost reduction is paramount. Companies continue to shrink capital expenditure budgets which will make the selling environment more difficult.
Many large Pharmaceutical companies are looking for smaller biotech companies to partner with and help bring new drugs and procedures to market quickly. Large Pharma companies are also making investments in smaller partners while helping them with sales and marketing.
Even though travel has become more difficult and web demo technology has improved, it is important not to lose touch with customers. One CEO panelist noted that meeting a customer or potential customer is still far more effective. Concerns over working with an early stage company are mitigated with a close relationship with a customer.
Focus on cost reduction in your sales pitches and make every effort to show up in person when meeting with customers and potential customers. Also, consider wearing a suit since the pendulum is swinging back toward business formal as the economy weakens.