JumpStart: IdeaExchange Blog

If you are an entrepreneur and are currently raising equity capital — check out the upcoming JumpStart Angel Fair. The fair will be held on Tuesday, October 26th from 11:30am to 4pm at the Wolstein Center in Cleveland. Over 100 angel investors are expected to attend, and all participants will be invited to attend JumpStart’s Annual Community Meeting taking place immediately following from 3:30pm to 6pm.

If you are interested, complete the online application form by 5pm on September 10th. A selection committee made up of investors and entrepreneurial support professionals from around the state will review the applications and select 12 companies to present. Companies will be notified the week of September 20th of their status.

As part of the day’s events, selected companies will take part in the Entrepreneur Showcase at JumpStart’s Annual Meeting to continue their conversations with investors, speak with other entrepreneurs, and share their company stories with other event attendees.

The last Angel Fair we hosted attracted over 100 angel investors and presenting companies went on to raise over $11 million in equity capital. We expect to have the same great turnout (if not better) at this year’s Fair and are excited about once again bringing our state’s most promising company opportunities and serious angel investors together in one room.

This is a great forum to showcase your company and pitch to an audience of qualified angel investors. Make sure to fill out your application today!

Kerri Breen is the Vice President of External Finance for JumpStart Ventures and works directly with our portfolio companies to secure additional growth capital. Kerri brings experience in capital markets, banking, public and private offerings of debt and equity securities, corporate mergers and acquisitions, and real estate asset dispositions. Kerri received her MBA with a focus on finance from the Weatherhead School of Management and her BA in marketing from Ohio State University.

The challenges of raising investment capital for your business and how to best prepare for an investor have been well documented by many industry experts. Yet having witnessed scores of presentations over the years I find that many entrepreneurs routinely miss a few key areas. And while there are certainly no guarantees or full-proof plans that will automatically result in successfully raising capital, the following suggestions should help you along the journey:

1. Present your business with energy, enthusiasm and confidence –- if you’re not excited about your business endeavor you’ll have a very difficult time getting an investor excited.
2. Know your business and industry cold – take the time to really understand and segment your chosen market. Know the trends, and consider doing a SWOT analysis on your chosen market (Strengths, Weaknesses, Opportunities and Threats).
3. Know your competition cold –- don’t make the mistake that so many have in assuming that “No one else is doing this”. If your investor discovers a recognized competitor that you should have discovered, you have instantly damaged your credibility.
4. Consider a comparison chart that demonstrates your unique advantages versus key competitors.
5. Clearly articulate your Value Proposition and what “makes your business so special’, and further explain how your unique competitive advantage represents both a significant barrier for your competition as well as a real benefit to your client.
6. Do your homework on the overall size of your market both domestically and internationally. That includes both consumer and commercial applications if applicable (overall market size or potential should approach $1 billion or better to really get the attention of investors).
7. Explain why you or a designated team member are the best candidate to serve as CEO.
8. Secure or “tee up” a deeply experienced management team. The people you surround yourself with are often the key deciding factor in securing investment capital.
9. Present a clear and “executable” plan to exceed $30 million in annual sales potential within 5 to 7 years. Remember that investors have options; they can choose to invest in any number of opportunities from traditional stocks and bonds to other high growth businesses. If you’re going to convince an investor to support your vision, you have to paint a large enough and clear enough picture that makes choosing your plan worth the risk.
10. Make sure the “assumptions” that drive and support your financial projections have been reviewed by experienced personnel so that such key items as unit sale prices and costs per unit have been thoroughly vetted.

As stated previously, in the journey of raising capital there are no magic bullets or guarantees. By incorporating these 10 tips however, you’ll be well on your way to dramatically improving your chances for success!

Darrin is Chief Economic Inclusion Officer of JumpStart and President of JumpStart Inclusion Advisors. He founded and ran his own strategic planning and management assistance firm and spent 16 years in the commercial banking and finance industry. Darrin has an MBA from Baldwin Wallace College and an undergraduate degree from Mount Union College. He has led a series of workshops and seminars on matters of economic development and diversity.

Last week I was in San Francisco, where I had the chance to learn from and interact with a number of entrepreneurs, investors, and others in the West Coast entrepreneurial ecosystem. While I heard a number of valuable presentations and panels while there, there’s nothing quite like a punchy quote to grab your attention! Here are a few I found most intriguing, exciting, or otherwise out of the ordinary!

5. “I invest in 1 or more of the 7 deadly sins”, said Reid Hoffman, Founder and Chairman of LinkedIn, angel investor, and new venture capitalist at Greylock

His rationale: Sins matter to people! We care about them! We are passionate, emotional, seduced, irrational sometimes, about the “sins”. LinkedIn is all about greed. Obviously the big idea here was that the company’s product or service has got to be incredibly compelling to a big market of people, but I like to think it’s even bigger — that the best ideas are those which people literally will be unable to decline for both rational and emotional reasons.  

4. “This is the decade of the CMO (Chief Marketing Officer),” said Josh James, Founder and CEO of web analytics company Omniture (which went public and then was bought by Adobe for $1.8 billion)

Well, of course I wrote this one down! But aside from my personal interest, the backstory on the thinking was provocative. James suggested that the 1990s were about the CFO (ERP, cost management, installing financial discipline), the 2000s were about the CIO (IT, infrastructure, client servers, the internet), and now, the 2010s will be about the CMO. The opportunity that will define CMOs and separate the good from the bad — particularly for online marketing companies — will be customer experience. How does digital interactivity and optimization really enhance and improve the customer experience? How do companies take all the data that can be individually available (such as a person’s purchase behavior via web purchases, qualitative feedback through Twitter, number of Facebook connections, etc) and turn that into an unparalleled, brand new customer experience? Or, to make the idea more tangible — if I, the consumer, could tell you exactly what I like — what types of offers work for me, what my social networks are, how I use promotions, how I shop and purchase merchandise — how will you tailor your customer experience to me specifically?

3. “The work starts when we make the investment,” by Felda Hardymon, Senior Partner of Bessemer Venture Partners and professor at Harvard Business School

The meaning? Money is just the beginning of the value that an investor can bring to a company. I was struck by the fact that this was being said by an investor, as opposed to an entrepreneur (although certainly entrepreneurs would agree)! Investors see their role — in fact, hold themselves accountable — for creating value beyond just the money, and entrepreneurs who leverage their investors for knowledge, skills, and connections are wise.

2. “Biology is the science that will drive everything else in the future,” by Dr. John Hennessy, President of Stanford University

I was not familiar with Dr. Hennessy’s background but was immediately impressed with his street cred regarding areas of innovation and entrepreneurship. (As a quick summary, he has a PhD in computer science, used a sabbatical year to found a company which commercialized his research in processors, and is a board member at Google and Cisco Systems, among others). So it was especially interesting to hear from an accomplished IT academic and entrepreneur of his belief that the next area for innovation will be the application of technologies and science — IT, physics, and chemistry — to solutions which address medical challenges. Putting his money where his mouth is, Dr. Hennessy built an interdisciplinary research program called “BioX” (x = any of the sciences, fill-in-the-blank style) to encourage students and researchers from across the sciences, engineering, and IT to create collaborations and solve the world’s biggest biology-based challenges.

1. “Wow…congratulations…you should be extremely excited to have an exit right now,” by various people in California

Yes, this wasn’t a quote attributable to any one person, but it was a frequent comment I heard in reaction to the news that JumpStart Ventures portfolio was about to have an exit. JumpStart Ventures portfolio company DIY was acquired last week, generating positive IRR for JumpStart and representing our first exit. It’s a real milestone for our portfolio and demonstrates that the model we have been executing for the last five years can work. Congratulations to the JumpStart Ventures team, the DIY and Yardi teams, and thank you to our donors for their continued financial support over the last five years and in the years to come!

Cathy Belk is the Chief Marketing Officer of JumpStart. She specializes in branding, marketing communications, and business management. She brings 16+ years of experience in a variety of marketing and business roles, but gets her energy from working daily with entrepreneurs and their growing companies.

Last week I attended an event that certainly would make anyone marvel at the entrepreneurial spirit, enthusiasm, and activity happening in Northeast Ohio. Goldstein Caldwell & Associates and TiE Ohio jointly sponsored the Portfolio Showcase at GCA’s new offices on Carnegie Ave, between the Cleveland Clinic and Case. GCA is a seed capital investment and business Development Company focused on very early (pre-seed) stage companies. TiE is the Ohio chapter of the global TiE network, a group that fosters entrepreneurship by focusing on immigrant, international, and minority entrepreneurs.

I went to the event expecting 30-40 investors, entrepreneurs and other interested parties who would network and hear presentations from a few promising local entrepreneurs. Instead, there were well over 200 people, somehow fit into this former flower shop. The event was outstanding! The networking was great, with a wide variety of people to interact with. The presentations were punchy, interesting, and ran on-time. The food and drink was excellent (until it ran out with the huge attendance). All in all, the TiE/GCA Portfolio Showcase was a huge success and a great testament to the vitality of Northeast Ohio’s growing entrepreneurial climate and the enthusiasm for high growth entrepreneurship here.    

The location of the event was interesting as well. GCA has converted a flower shop that is scheduled to be demolished into a really edgy “incubator-type” space, with some entrepreneurs getting to locate in the former flower cooler (I am not sure if that is considered to be prime space, or where the newbies get stuck!). You may have noticed that I said “IS scheduled to be demolished”. Todd Goldstein of GCA told me that, although the price was right (free!), the tradeoff is that the demolition will go forward sometime at the end of the year, and that GCA will be again looking for space to continue their work. If anyone knows of another space that might work for them, or if you are an early-stage company in need of startup space, please get a hold of Todd.

Here at JumpStart, we work hard at, and are very active in contributing to building an entrepreneurial climate and ecosystem here in Northeast Ohio, and we have lots of events to promote that. We don’t, however, need to be in the center of all such events, and it was really nice to see the TiE/GCA event go so well, and put the enthusiasm this region has for entrepreneurship on display. Congratulations and thanks to TiE and Goldstein Caldwell on a great job!

Chris Mather is President, JumpStart Entrepreneurs-in-Residence. Previously, he managed a number of technology initiatives in Northeast Ohio for NorTech. Before entering the economic development world, Chris ran a number of technology companies in Northeast Ohio and New England, including Ion Optics Inc., where he raised $6.7 million in venture capital, and Apsco Inc. and Gould Instrument Systems. Prior to that, he spent 13 years in sales, marketing and management roles with Hewlett Packard after graduating from Worcester Polytechnic Institute with a BS in Electrical Engineering.