What’s the Biggest Mistake Entrepreneurs Make When Pitching for Seed Funding?

seed funding mistakes

Seed funding isn’t easy to come by, especially when most founders handicap themselves from the get-go.

Despite the wealth of knowledge online and platforms like Angel List and Gust, I hear that founders still make the same mistakes over and over. So, I asked several experienced investors from around the United States:

What are the biggest mistakes founders make when pitching for seed funding?

And here’s what I heard from these seed investors: most entrepreneurs make similar mistakes (and all can be avoided). Read the expert-investor responses below, and follow these 3 strategies to mistake-proof your next pitch. Be sure the read the “Seed Funding Action Items” at the end of each section…

1.) Do Your Homework Before Asking for Seed Funding

“It’s remarkable to me how many entrepreneurs approach us without doing any research in advance,” says Brad Feld, managing director at VC firm, Foundry Group.

And Feld isn’t alone. Most investors also find the lack of prep from entrepreneurs a bit frustrating.

Dave Knox, Partner at The Brandery

Dave_Knox1-283x300

Perhaps the biggest mistake is they way that an entrepreneur approaches. I get numerous requests where an entrepreneur reaches out to me cold. I read email so its not that I skip over these emails. But instead in almost all of these cases, I can tell that the entrepreneur has put ZERO effort into reaching out to me. They don’t customize the request. They don’t take time to read about The Brandery. And they don’t look into my connections or background to see what we have in common. Take the time to get to know an entrepreneur and target the people that are a great fit. If you spend the time to learn more about the investor, it will do wonders to your success rate.

Seed Funding Action Items:

  • Research your contact’s investor fund or investment group website
  • Read and review contact’s personal website (if they have one)
  • Researched the investor on LinkedIn and Angel List for connections or background you may have in common

2.) Focus On Building a Relationship Before Asking for Seed Funding

We’ve talked before about how to get seed funding and this first important step: build a real relationship with your potential investor. And this one sounds simple but executes hard.

Ting Gootee, Partner at Elevate Ventures says, “Seeking outside investors is no different from establishing a long-term relationship where both parties hope to realize certain benefits.” 

Ask any investor out there, and I’ll bet that anyone with a heart would agree.

 Dr. Tony Ratliff, Angel Investor

Tony Ratliff The first number one is that the entrepreneurs try to close the deal on the very first contact or pitch. When really they should be trying to point out the problem, share their story and get us to take the next step. It’s kind of like dating -you don’t ask to get married on the first date. Most investors want to invest in the entrepreneurs, not necessarily the idea because start-ups pivot all the time. So don’t try to get married the first time you approach an investor.

Seed Funding Action Items:

  • Be genuinely interested in other people. Ask questions.
  • Seek to understand your potential investor’s motives. What are they looking for in an investment? How do they want to get involved (beyond writing a check)?
  • Be vulnerable. Share a personal story.

3.) Prepare Your Seed Funding Pitch

Every seed investor has his or her own interests and qualities they look for in a seed investment.

“Have some level of proof of concept,” says Scott Orn, Partner at Lighthouse Capital. Others look for their own must-have ingredients to clear the threshold into that land of “OK, I’m interested…”

Ezra Galston, VC at Chicago Ventures

Ezra Galston

One of the biggest mistakes are entrepreneurs who focus the majority of their time/energy on explaining market sizes or revenue models or other ethereal subjects. We will spend our time researching your market and drawing our own conclusions. We care about how an entrepreneur executes and want to hear data points on accomplishments, growth, and traction, whether those take the form of revenue, users, or team. But more than bullets, we care about how those accomplishments happened – because, again, the focus is on executional ability

 Andy White, Partner at the VegasTech Fund

Andy White

There are a ton of great products out there that no one knows or cares about. You have to show that you understand your market and the demand for a solution to a big problem. Then you can show off your really cool tool.

Seed Funding Action Items:

  • Research your industry inside and out.
  • Practice your pitch with a trusted advisor.
  • Do you know what your investor is most interested in learning about your business? If not, it doesn’t hurt to ask.

The most important thing is to keep improving your pitch for seed funding. If you a potential investor decides to pass, follow up and ask why. It’s ok to request feedback on your pitch and presentation, too.

So, when you venture out to raise seed capital, don’t pass up the opportunity to learn something.

Have you made your own mistakes in your quest for seed funding? What lessons have you learned?

Learn more about seed funding and startup fundraising with Verge! Sign up for our email list for weekly tips and tricks from the experts.

6 Tips for Fine Tuning Your Startup Pitch

How to fine tune your startup's investor pitch

Photo Credit: Alex Skopje

Launching a small business isn’t easy. Whether you dream of one local shop or a global corporate empire, you’re going to need help financing your business efforts. Now, this could mean friends and family, and it could mean venture capitalists and angel investors. Regardless, the only way to seal the deal is with a great pitch. Check out these six tips for fine tuning your startup pitch and get your business off the ground.

1. Set Yourself Apart

It’s essential that you set yourself apart from your competition. Investors are going to ask why they should sink money into your operation as opposed to another one that offers a similar product or service. This differentiation has to be an integral part of your pitch. Highlight the characteristics that make your business better than the rest.

2. Include Solutions

In addition to featuring your company’s unique characteristics, you also need to include the solutions it can provide for customers. Identify problems in the marketplace that need to be solved and detail exactly how you are going to solve them.

3. Prudently Include Creativity and Humor

You never want your pitch to be dry, just be sure to use your senses of creativity and humor effectively. Don’t cross the line and say something offensive or off the mark, but by all means, make your pitch seem human. Be yourself – you are your company, after all. Tell a humorous or intriguing anecdote about something that occurred while developing your business idea, for example. And, forget about Power Point presentations – they’re generally recognized as death knells for pitches.

4. Be Specific and Open About How Much You Need

If you need $50,000, ask for it. The people you’re pitching to know that you want money, so there’s no point in being bashful. Plus, this way they’re instantly going to know whether or not they can handle such an investment, which can save everyone a lot of time. The key here is not just knowing how much you need, but knowing why you need it and when you should raise it.

5. Be Prepared and Practice

Never deliver a pitch off the cuff – practice and tweak it as much as necessary. Instead of just rehearsing in front of a mirror, though, assemble a group of friends or fellow entrepreneurs and recreate the actual environment you’re going to find yourself in.

6. Keep it Concise

There’s no standard time limit when it comes to delivering your pitch, just make sure it’s as concise as it can be. If you can get your point across fully in three minutes, do so. If you need 10, take it. Just be sure to edit your pitch down so there’s no fluff. As long as it’s packed full of pertinent information, it can take a bit longer.

No matter what you’re talking about, you need to exude passion in every aspect of your pitch. Investors know that if a company is going to be successful, its owner must live and breathe it 24 hours a day. Small businesses are incredibly difficult to get off the ground, and are ultimately successful only if the people at the helm love what they’re doing. Communicate this in your pitch and your chances of success skyrocket.

What was your best investor pitch? What advice do you have for entrepreneurs pitching for the first time? If you’re interested in perfecting your pitch at Verge, let us know!

How To Re-Invest In Midwest Startups

Indiana and the surrounding Midwest has an exciting history of software entrepreneurship.

Large sales of companies like Software Artistry and Baker Hill in Indianapolis, and Resite in Bloomington, started a movement that has snowballed into a powerful Midwest startup community.

In this interview from the The Innovation Showcase, entrepreneurs and business leaders from around the Midwest share their perspective on how to keep the momentum going and re-invest in Midwest startups:

First you have to have success. And early software successes in Indiana made way for even bigger wins for the state, including an Angie’s List IPO, Compendium acquisition by Oracle, and of course an Exact Target IPO and subsequent acquisition by Salesforce.

Meanwhile, hundreds of software startups have launched. Some have folded, some have stabilized, and others have flourished.

“We’ve generated a bunch of small companies,” says Mike Trotzke, co-founder of SproutBox. “It’s time for us to start picking the winners and doubling down.”

This year’s Innovation Showcase, with more than 70 fundable companies, resulted in one company walking away with $128,000 in resources to continue their growth. We’re recalibrating venture funding in the Midwest. What else can Indiana and the Midwest do to double down on entrepreneurship?

Drop a comment below and let us know. You can also read the full transcript for the video above:

IMG_8541

 

Matt Hunckler:

We have had a lot of success here. We’ve built on the successes of Software Artistry and going back to Baker Hill. A number of the Indianapolis companies that have exited, obviously Resite in Bloomington and what that spawn was Sproutbox; and that whole movement, all the way up to Angie’s List IPO and the Exact Target’s IPO, and subsequent acquisition.

What do you think that means? What do you think those exits and those pieces mean for Indianapolis and Indiana, in general? And what do we need to do to build on that momentum? It’s kinda like what do you do after you have the Super Bowl here? Do we go for the next 2.5 billion dollar exit? Or we just keep getting small wins?

John Wechsler:

John Wechsler, founder of Launch Fishers.

I have some very strong feelings about this, and I have— for the last couple of years when I was with Mike Kelly and Jason Vasquez, and the others at Developer Town. Couple of years ago, I’ve seen..guys, 2014 is gonna be the bellwether year for entrepreneurship. And in actual, it’s 2013.. turns out it’s probably gonna be 2014— the bellwether year for entrepreneurship and startups in Indiana. For many reasons, one, the ecosystem that’s building. But, several of these major exits and liquidity events that have created dozens, if not hundreds of millionaires with the temperament, the interest and the financial capacity go out and try at themselves. And that is first and foremost, what you need in an ecosystem. You have to have that success and that, you have to have those that were successful go out, try it again and pull others into this wacky world of entrepreneurship, right? And that’s really what makes Silicon Valley so special. It didn’t just happen in the last ten or twenty years. If you think that, you’re misinformed.

The first place I went to when we moved out there was— in fact, JP and I might have actually done it together.. the Palo Alto-Hewlett Packard garage. And literally stood there and just look at it and thought, “man, forty years ago at that time.” Now, forty-two years ago it all started right there. And it took several spin-outs, and exits, and multi-billions of dollars coming and going to build that ecosystem. And it won’t happen overnight. You have a few of these happen. You have a period of entrepreneurial kind of growth. And then it happens again. And we can already see those next special companies that are growing up right now. I won’t embarrass anyone or take my shots at naming the ones that I think are gonna win but man, you can see this.. building. And there’s a lot of excitement and a lot of opportunity.

John Hanak:

John Hanak, Director of Purdue Research Foundation.

And I think, John, related to that is when you look at what’s happened and where there have been exits, almost all the founders, almost all of the key employees are still here. I mean, they’re still in Indiana; they’ve not left. We have cases— John Wechsler, that left and came back which is awesome. I’ll always remember that first time I called you when I found out you were coming back. It was so critical.

We have successful companies in Indiana that have been started by people that came back from Silicon Valley. Dan Haze, up with the Health Call in Merrillville. Jeff Reedy was Scale Computing. We have lots of examples. And what’s happening is.. what I really believe is happening as you talk to everybody that does come back or that doesn’t leave; they’re staying for quality of life. And that is just absolutely huge aspect to this ecosystem in Indiana.

Mike Trotzke:

Mike Trotzke, co-founder of SproutBox.

So, our first fund is now about five years old. And we are definitely focused on what I think is that next phase. This has been a topic of conversation with us a lot. We’ve generated a bunch of small companies. Two, three, four, five, six people companies. And it’s time, from our standpoint, for us to start picking the winners out of those. Start doubling down into the companies that we think are really gonna be the big ones. And, I think a lot of these ecosystems that have popped up— the small, little groups, are in that phase.

Whether it’s now, it’s time to look at the companies, call the herd, get behind some. Take advantage of the fact that there’s a ton of new capital available in the state; to help fuel the growth of some of our winners, and take them to the next level. I think the co-working models are essential, but the next phase is to start having companies at least in Bloomington that are in bigger shops; going out and getting their own office. They’re starting out 10 employees, 20 employees, and 30 employees so that we can get the cycle going. Like what happened with ReSave, we are the only one. We built this company, we sold it and reinvested. We want to take that 20 companies we’ve created, and do that with all 20 of them now. And that’s kind of our next phase. So, I’m very optimistic about that, given the climate of the rest to save Indiana.

Jeb Banner:

Jeb Banner, CEO of SmallBox.

Just to kinda go back to what John (Hanak) was saying about quality of life, I think that can’t be underestimated. I think that a lot of focus is given to funding and talent. And that’s great! We need those things in terms of the ecosystem. But, when you think about the other side of that— it’s the habitat, right? Anyhow, that’s the co-working spaces, but also the cultural trail. It’s the bed and breakfast going into Broad Ripple finally, right? A place people can actually stay.. about going either far north or for south. So, I think that the tech community, and especially the people with a lot of money which now we’ve got a bunch more or soon have a bunch more— need to look at that ecosystem. Think of the quality of life aspects if they really wanna make a long-term bet. Make those investments as much as the investments in the company, and find ways to build-up that infrastructure so that this is the habitat for the talent. And I think that was the approach of the Speak Easy that we took is let’s just build the space. We’re not gonna tell them really what to do. And the animals came. You know, they happen. It took over. They ran the zoo now. And I think, that’s the way it works.

Mike Kelly:

Mike Kelly, Managing Partner at Developer Town.

So, I think from my perspective, one of the things in terms of the people that we talked to who are starting companies today versus the people we talked to three years ago– it’s just night and day difference, right? And it’s not only the people locally who are now just becoming serial entrepreneurs, but it’s also the people who look at Indianapolis– who wouldn’t have looked here before, right? So, the number of deals that we see potentially coming out of Chicago, who would have never looked at Indiniapolis three years ago, but now, legitimately look down here and say, “well hey, we’ve heard about Indianapolis and some of the things you guys have going in there.” It’s really nice news once company sell for really big, large amount of money, right? That gets attention. And so, it’s not only the capital that is created here and stays here, hopefully. It’s also what that attracts to the space. And I think, Verge— and everything that you’ve done over the last couple of years, and there’s a ton other groups at that point. There, just that attention, and the attention of Startup America and the attention of some other things that are going on here, creates a gravity that brings in better opportunities which is ultimately what drives the wheel, right? The better ideas you get, the more people out there pitching. And you know, as those flow to the top, that’s how you drive that engine. And I think, for us, it’s really great to work with these companies. And to move that forward. But, it all starts with those exits coming back here and working here, right?

 

What’s the Biggest Mistake Entrepreneurs Make When Pitching for Seed Funding?

seed funding mistakes

Seed funding isn’t easy to come by, especially when most founders handicap themselves from the get-go.

Despite the wealth of knowledge online and platforms like Angel List and Gust, I hear that founders still make the same mistakes over and over. So, I asked several experienced investors from around the United States:

What are the biggest mistakes founders make when pitching for seed funding?

And here’s what I heard from these seed investors: most entrepreneurs make similar mistakes (and all can be avoided). Read the expert-investor responses below, and follow these 3 strategies to mistake-proof your next pitch. Be sure the read the “Seed Funding Action Items” at the end of each section…

1.) Do Your Homework Before Asking for Seed Funding

“It’s remarkable to me how many entrepreneurs approach us without doing any research in advance,” says Brad Feld, managing director at VC firm, Foundry Group.

And Feld isn’t alone. Most investors also find the lack of prep from entrepreneurs a bit frustrating.

Dave Knox, Partner at The Brandery

Dave_Knox1-283x300

Perhaps the biggest mistake is they way that an entrepreneur approaches. I get numerous requests where an entrepreneur reaches out to me cold. I read email so its not that I skip over these emails. But instead in almost all of these cases, I can tell that the entrepreneur has put ZERO effort into reaching out to me. They don’t customize the request. They don’t take time to read about The Brandery. And they don’t look into my connections or background to see what we have in common. Take the time to get to know an entrepreneur and target the people that are a great fit. If you spend the time to learn more about the investor, it will do wonders to your success rate.

Seed Funding Action Items:

  • Research your contact’s investor fund or investment group website
  • Read and review contact’s personal website (if they have one)
  • Researched the investor on LinkedIn and Angel List for connections or background you may have in common

2.) Focus On Building a Relationship Before Asking for Seed Funding

We’ve talked before about how to get seed funding and this first important step: build a real relationship with your potential investor. And this one sounds simple but executes hard.

Ting Gootee, Partner at Elevate Ventures says, “Seeking outside investors is no different from establishing a long-term relationship where both parties hope to realize certain benefits.” 

Ask any investor out there, and I’ll bet that anyone with a heart would agree.

 Dr. Tony Ratliff, Angel Investor

Tony Ratliff The first number one is that the entrepreneurs try to close the deal on the very first contact or pitch. When really they should be trying to point out the problem, share their story and get us to take the next step. It’s kind of like dating -you don’t ask to get married on the first date. Most investors want to invest in the entrepreneurs, not necessarily the idea because start-ups pivot all the time. So don’t try to get married the first time you approach an investor.

Seed Funding Action Items:

  • Be genuinely interested in other people. Ask questions.
  • Seek to understand your potential investor’s motives. What are they looking for in an investment? How do they want to get involved (beyond writing a check)?
  • Be vulnerable. Share a personal story.

3.) Prepare Your Seed Funding Pitch

Every seed investor has his or her own interests and qualities they look for in a seed investment.

“Have some level of proof of concept,” says Scott Orn, Partner at Lighthouse Capital. Others look for their own must-have ingredients to clear the threshold into that land of “OK, I’m interested…”

Ezra Galston, VC at Chicago Ventures

Ezra GalstonOne of the biggest mistakes are entrepreneurs who focus the majority of their time/energy on explaining market sizes or revenue models or other ethereal subjects. We will spend our time researching your market and drawing our own conclusions. We care about how an entrepreneur executes and want to hear data points on accomplishments, growth, and traction, whether those take the form of revenue, users, or team. But more than bullets, we care about how those accomplishments happened – because, again, the focus is on executional ability

 Andy White, Partner at the VegasTech Fund

Andy White

There are a ton of great products out there that no one knows or cares about. You have to show that you understand your market and the demand for a solution to a big problem. Then you can show off your really cool tool.

Seed Funding Action Items:

  • Research your industry inside and out.
  • Practice your pitch with a trusted advisor.
  • Do you know what your investor is most interested in learning about your business? If not, it doesn’t hurt to ask.

The most important thing is to keep improving your pitch for seed funding. If you a potential investor decides to pass, follow up and ask why. It’s ok to request feedback on your pitch and presentation, too.

So, when you venture out to raise seed capital, don’t pass up the opportunity to learn something.

Have you made your own mistakes in your quest for seed funding? What lessons have you learned?

Learn more about seed funding and startup fundraising at The Innovation Showcase on July 10. Grab your all-access pass here:http://theinnovationshowcase.com

 

How to Get Seed Funding: Do This First

relationship-2Want to get seed funding for your startup? You won’t get very far if you spend all of your time developing your pitch.

“Too many founders put all of the focus on pitching their project and not on building a relationship,” says Gerry Hays, co-founder and managing partner of Slane Capital. And I hate to say it, but I was one of those people.

Most investors don’t have time for your un-calibrated seed funding pitch.

When I first met Gerry, I wasn’t seeking seed funding. I was a senior at Indiana University (IU) in his non-traditional venture capital class who frequently abused his office hours to gain insight for my own business.

I was working on building my outsourcing and web development business. And Gerry was nice enough to help me find my way through a slow build (and eventual sale) of my business.

But Gerry isn’t your average seed investor. As an associate professor at IU, Gerry has a sense of moral obligation to help first-time student founders. Well, that and he’s just a genuine guy who wants to help. The harsh reality for entrepreneurs is that your pitch likely won’t find the patient ears of a Gerry Hays.

Most seed investors won’t give a damn.

And they shouldn’t. Since starting Verge nearly five years ago, I’ve heard literally thousands of pitches to active investors. Most founders forget the most important thing.

A pitch is a conversation.

If your pitch is script or a static series of slides, you’re doing it wrong. Even if the format of your pitch opportunity doesn’t allow for open dialogue, there’s a conversation going on between the ears of your listeners. And that conversation is built on the foundation of your relationship with that audience.

get-seed-fundingSo if you want that conversation to come to life, give it some oxygen.

You won’t accomplish this by suffocating your audience with stats, features, and projected financials.

Find out what gets your prospective investor excited. I’m sure you’ve already done your homework on what kinds of deals your prospect invests in (right?). And you’ve probably already tailored your presentation to appeal to the goals of their seed fund or angel goals.

But who is Johnny Angel when he’s not coaching entrepreneurs or writing checks?

If I hadn’t eventually gotten to know Gerry Hays outside the classroom, I don’t know if I would have ever sold that business. And Gerry has helped me in more ways than as a mentor.

A good seed-funding conversation doesn’t have an end.

How can you help your potential seed investor?

seed-investor-relationshipPeople will always have problems that keep them up at night. Yes, even investors. So as an entrepreneur, it’s your job to care enough to help them sleep a little easier.

Good seed-stage investors also give seed funding to founders they want to genuinely want to help. And if you’re going to bring on active investors, you’d better be a good mentee.

Ask for help and follow up with frequent updates. Make your investor a part of your story and your relationship will grow along with your business.

Gerry and I are still friends. We’ve collaborated on a few projects and have grown the Verge community together over the years. But it’s the relationship that is the most valuable piece of our history (and it was essential for any business to take place).

So, next time you reach into your pocket for the the clicker to start advancing your pitch deck, ask yourself:

How can I build a relationship?

 

How To Win During the Investment Gold Rush of the Wild Wild Midwest [VIDEO]

Back in the days of cowboys and six shooters, people started using the phrase “chomping at the bit” to describe rampant anticipation.  Sometimes a cowboy’s horse would get so excited about something that it would chew at the metallic bit in its mouth, unable to contain himself as he looked toward his next goal.

The_Cow_Boy_1888

Now, we’re not comparing anyone to a horse, but it’s this level of eagerness that we’re seeing from investors and exhibitors for the 2014 Innovation showcase, and today we look to 2013 to see why.

Midwest investors are feeling green.

“The landscape for seed capital in the Midwest has totally changed…there’s no question that it’s a good time to an early stage entrepreneur in the Midwest.”

So began Jake Cohen of Detroit Venture Partners in a 2013 Innovation Showcase panel that included Kristian Andersen of Gravity Ventures, Jonathon Perrelli of Fortify VC and Dave Knox of Cincinnati’s Brandery.  These guys are excited to find growing early-stage companies in which to invest their cold hard cash, and they’re feeling bullish at the prospect.

Knox noted, “…there’s a lot of capital being unlocked that actually wasn’t there for an early stage…we’ve got some real people getting involved as angel [investors].”  Indeed, it’s an exciting time to be an investor in Silicon Prairie.  With the acquisitions of Exact Target and Compendium both happening since this discussion, we’re excited to hear what this year’s panel has to say about the investing landscape in Indiana.

Innovation Showcase 2013We’re breaking records left and right.

Investors aren’t the only ones showing their anticipation.  We’ve had a record number of exhibitors apply to the Innovation Showcase.  Super Early Bird tickets sold out quickly, and perhaps most exciting of all:

We’re giving away a record $120,000+

in services and investment at this year’s Innovation Showcase.

That’s why we’re releasing a batch of Early Bird tickets this Thursday morning!  Be sure to set your calendar for 9:30 am, because tickets will go quickly and the price only goes up the closer we get to Innovation Showcase 2014.

We agree with Jake Cohen: it’s a good time to be an early stage entrepreneur in the Wild, Wild Midwest.

So what’s exciting you about the funding landscape in Indiana?

Why Launch a Tech Company in Indianapolis? Verge Does it #WithGusto

The question has been asked of Shawn Schwegman too many times. The founder of Gusto, an email app about to launch, had entertained the idea of launching at South by Southwest (SXSW), but declined. Instead, he decided to launch his company from the Verge stage here in Indianapolis. The result? The largest launch in Verge history.

So if you were a tech startup, why would you want to launch in Indy? Keep your eye on these three trends in Indy that set it apart from other tech scenes throughout the nation.

1. Community

Gusto

Personally, I have been involved with Verge for about 8 months and I’ve heard this community receive high praise from everyone who comes to know us–from IEDC President Eric Doden last night, to reddit.com co-founder & best-selling author Alexis Ohanian just a few weeks ago. And what we have in Indianapolis is special for many reasons beyond our tech talent. Yes, Indianapolis is the Marketing Technology Capital of the World. Yes, Indiana is second in the nation at attracting out-of-state talent to our Universities. Yes, Indianapolis is positioned to launch some of the nation’s coolest tech startups, but that alone isn’t what makes Indy great.

Our community came out in a big way last night. 500 techies joined to help launch a new brand that is in a position to revolutionize the way we view email and personal storage, and that’s what this community is best at. Supporting one another and lifting each other up.

 

2. Access to Talent

A common refrain for Shawn throughout the process of building Gusto was “Go Big or Go Home.” He wasn’t going to half ass this app, so he found five of the best developers in the state, grabbed the best branding agency and PR firms he could find, and shelled out some serious dough.

Well, one of those is a lie.

Shawn talked last night about how the talent we have here in Indianapolis is as good as anyone in the world, but here you don’t have to pay the premium. You can get world class work done for half the price of Silicon Valley or New York.

3. Analytic and Marketing Capacity

Indianapolis is uniquely positioned as the Marketing Tech Capital of the World, and Shawn used every bit of that capacity he could find. As an analytically-driven person, he’s running thousands of marketing campaigns with this launch, micro-targeting every single one with the ultimate goal of making the advertising as personalized as possible.

This highly-analytic, yet creative, approach is a quintessential Indianapolis move that takes advantage of technologies that didn’t exist until recently. While this is definitely the more difficult path, Shawn doesn’t flinch at the task. He understands that this is what you have to do if you want to tango with big data.

I was extremely proud of the Verge community last night. It was incredible to see such a large group of people come out and support Shawn and the Gusto team. This community is why people like Shawn are choosing to launch in Indy as opposed to at SXSW, and it’s why so many new Indy-made companies have so much forward momentum right now.

And we aren’t showing any signs of slowing down.

What else makes Indy a great place to build and launch tech? What opportunities do we have to step our game up to the next level? Drop your thoughts in the comments below!

Startup Investor Insights: Elevate Ventures’ Ting Gootee

When you score as much as the Seahawks did in the Super Bowl, the way people refer to you starts to change. They call you things like “dominant,” “effective,” and “the best.” 

Elevate Ventures has been called many of those things.

That’s why I was so excited to hear what Elevate Ventures’ Vice President of Investments, Ting Gootee, had to say about what she considers when evaluating deals–and what startup founders should know about how Investors approach deals–on one of our recent Investor Panels.

Startup Investor Insights: Elevate Ventures’ Ting Gootee

Investor Insights Elevate Ventures Ting Gootee

Ting Gootee, VP of Investments at Elevate Ventures

Not All Money Is Created Equal

If Firm A agrees to the same terms as Firm B, why would their investments be any different?

Because, as Gootee pointed out, not all investors bring the same resources, network, and commitment level to the table.

“Look at it as a partnership,” Gootee urged founders. “When you take money from someone, they are in this with you for a reasonably long time.” Startup funding is not marriage, but the investor panel agreed: it’s close.

As with any relationship, Gootee said, you’ll want to look for three Cs when evaluating your potential investors.

The Three Cs of a Healthy Investor-Startup Relationship:

  • Competence. Do your due diligence on your investors. You can bet they’ll be doing theirs on you.

  • Character. You’ll depend on

  • Chemistry. Are your goals aligned well, or is it more of a loose fit? You’ll want your investors to be in lock-step with your goals so you can leverage your relationship with them effectively.

“Know that you are in this for the long term, and know that there will be bumps in the road,” said Gootee. But, as she illustrated, if you have kept the Three Cs in the front of your mind as you secure funding, you’ll encounter those bumps in the road with the confidence that all parties involved want the same result.

What Makes Investors want to Invest?

As Gootee pointed out, you should not ignore the human side of the investor-startup relationship. And her investment team at Elevate certainly doesn’t.

  • Gootee looks for “Someone that is comfortable managing the human side of business. As early stage as they are, there is a lot of subjectivity in finding the right fit.”

  • The second thing Gootee and her team at Elevate Ventures look for in a founder is leadership. But, as Ting so rightly asked, “What does that mean?”

    • When she evaluates a founder, Gootee wants to see servant leadership. “It’s not just about you, as the founder,” Gootee said. “It’s about the resources you can bring to your team.” That, Gootee said, is how companies can really grow and scale.

Gootee’s fellow panelist, Gerry Hayes of Slane Capital, agreed with Gootee and explained that the difference between a founder and a CEO can mean the difference between whether or not an investment will be made.

Both investors concur that the founder may not be the person to scale the startup–which really gets at a key insight I got from this panel:

  • When they’re evaluating founders, investors want to see someone who is willing to acknowledge that, although they built “their baby” until a certain point, in order for it to grow bigger than themselves, they may need to assume new, different roles. Be humble.

7 Startup Community Takeaways and Photos from The Innovation Showcase

The Innovation Showcase is one of the rare opportunities we have as entrepreneurs to lift our focus from the everyday, take pause, and remind ourselves why we love what we do. On July 11th, over 600 entrepreneurs, investors, and professional service providers came together to celebrate problem solvers, connect with inspiration, and (hopefully) find the right funding for young companies. Attendees were united by a shared pursuit of excellence and innovation, and the entrepreneurial energy at The Innovation Showcase was strong and apparent.

Entrepreneurs, investors and service providers packed the house at Dallara.

Entrepreneurs, investors and service providers packed the house at Dallara.

Welcome from Lt. Gov. Sue Ellspermann

The Dallara Indycar Factory was chock full of game changers. Companies and investors from Indianapolis, the Midwest, and the coasts were there to validate innovation across different markets and understand new approaches to familiar challenges. Lt. Governor Sue Ellspermann and Venture Club of Indianapolis President John Hanak officially opened the event at 2:00.

 

Lt. Gov. Ellspermann

Lt. Gov. Sue Ellspermann, and entrepreneur herself, has done much to benefit Indiana’s entrepreneurs.

Verge’s Bright Future

Then, just before the day’s first panel, Matt made the announcement that I am Verge’s new executive director from The Innovation Showcase’s stage. It’s a responsibility I am honored to take on, and I can’t wait to grow our amazing community with you.

Verge New Director

Matt Hunckler officially announces Alec Synnestvedt as Verge’s new Executive Director.

Entrepreneurial Hotspots Panel

The Entrepreneurial Hostpots panelists provided great insights into what Indiana’s startups can do to leverage great local resources like coworking spaces and accelerators. Anecdotes from the excellent panel packed plenty of humor into actionable info for entrepreneurs.

Entrepreneurial Hotspots Panel

Startup Pitch Competition

The startup pitch lightning round was fast-paced and hard-hitting. 60 seconds wasn’t enough for some entrepreneurs, but it was just enough for many. Keep an eye out for more from the pitches hitting the Verge blog soon!

 

Pitch Competition

A rapt crowd watches each minute-long sprint of a pitch, evaluating possible investment opportunities.

pitch3

The Investor Roundup Panel

The Investor Roundup panel yielded excellent discussion and plenty of takeaways for the audience. A few soundbites:

The Winners

Thanks to our amazing sponsors, many companies walked away as winners of opportunities to pitch for Elevate, Stepstone, P3 Alliance, Gravity, Allos, xCAP and Halo.

Best Seed Pitch: Emphymab Biotech

Best Startup Pitch: Revive Electronics

Best First Round Pitch: BlueBridge Digital

Elevate Pitch invitations: Revive Electronics, Enfront

Halo Diligence Interest: BoxFox, IP Software, CloudOne

Grand Prize Honorable Mention (Formstack Max plan for one year, Executive coaching & pitch review with Eric Anderson of Scientifically Speaking, one month consulting services with Ryan Pfenniger): Revive Electronics

2013 Innovation Showcase Company of the Year: Emphymab Biotech

See you next year!

Crowd2 Crowd

Next year’s Innovation Showcase promises to be even bigger and better. See you for the next one on July 10th, 2014!

 

 

Announcing more Companies to Pitch and Exhibit at Innovation Showcase

Innovation Showcase

The Innovation Showcase is shaping up to be a fantastic event! On July 11th, 60+ fundable companies of varying stages will share their story in the Dallara Indycar Factory exhibit hall and give their 60-second pitch for a chance to win $60K in cash and services. Attendees get a chance to see the pitches, tour the hall, and attend two great panel discussions before the winner is announced at the end of the day.

60-innovation-showcase-companies

Grab your attendee tickets to catch all the action!

And in case you missed it, watch Showcase participant PocketCab on Inside Indiana Business:

PocketCab pitches on IIB

PocketCab pitches on IIB

We’re thrilled to announce the next group of Innovators to watch:

ShopTalk was founded in September 2012 to solve the most talked about pain point for online retailers today – how to best capitalize and engage potential customers through Facebook. ShopTalk’s subscription-based product gives retailers exposure to their customers’ social network by providing shoppers an instant discount (or other direct incentives) for sharing their purchases to Facebook, while also providing retailers analytics behind customer profiling and the reach/interaction of posted products.

Innovative Photonics Technologies, LLC Increases the performance of electronics systems used in communications and computing networks by miniaturizing current fiber optic architectures onto photonic integrated circuits (PICs). Development work has included fiber-optic architectures for analog-to-digital and digital-to-analog converters (ADC / DAC), photonic switching, and optical processing of multiple simultaneous radio frequency (RF) communications and radar signals for antenna arrays. The first product InPhoTec is bringing to market is a high-speed and high-resolution all-optical ADC based on an architecture developed by Dr. Siahmakoun that takes advantage of the reduced path lengths and high-speed devices available in photonics chips to achieve market leading performance. Currently raising funds to complete implementation of this photonic ADC.

DermaLife, LLC provides advanced skin care solutions. Since our company’s founding in early 2010, we have focused on launching in the U.S. an improved formulation of a classic French remedy that generates $50M in annual revenues and is used in over 70% of French households for burns, wounds anti-aging. Since Dermal Life achieved FDA clearance on May 1, 2013 and recently launched LaFONTAINE to achieve revenue generation, we are pursuing both strategic private-label partnerships and strategic angel-investor funding of up to $1 million to launch Rx indications into radiation oncology and dermatology market segments.

Infinite AI, Inc. builds intelligent end-to-end automation systems for supply chain operations and healthcare organizations that utilize artificial intelligence, robotics, RFID and high performance computing.

MYTM8 is a management tool for youth sports teams that simplifies the lives of parents and coaches. The application was developed to alleviate the day-to-day management and fundraising challenges uncovered by conversations with local sports teams. In the past several months, we have built and beta tested a functional team management application. MYTM8 is currently expanding our user network and engaging the feedback of our existing member teams.  To build upon this success, MYTM8 is working to enhance the fundraising potential of youth teams – enabling team parents to give back to their organization through everyday purchases on their smartphone. Within the past few weeks, we have developed a relationship with the state’s governing soccer body, the Indiana Soccer Association, to eventually test and promote our fundraising application to their member base of 60,000 players.

Envigilator We solve the problem that teachers don’t have any insights into the methodology or steps their students use in completing assignments by recording data and syncing it to the cloud for further analytics and review. You might remember us from the Innovation Showcase last year. At that time, we were capturing data for the purposes of cheating prevention. We’ve learned that there isn’t much of a market for cheating prevention software. However, our users loved using our recordings to help students who struggled in their classes. So we listened and now we’re working on building Envigilator into a complete assignment level learning analytics system to help students and teachers discover and correct the difficult points in the learning process. Do you know educators that give computer-based assignments? It could be coding exams, graphic design, or even english or history papers written on a computer. We’d love to talk to them!

Curvo Labs, LLC Hospitals and surgery centers purchase $200 billion in medical devices each year. Medical device companies spend more to sell a product than to manufacture it. Hospitals and surgery centers need to save money. Medical device companies need to sell products efficiently. With Curvo, they both win.

MedDiary.com solves the challenge of remotely managing patients with multiple chronic conditions by enabling healthcare providers to truly “prescribe” a personalized health management plan directly to their patient’s mobile device. The idea for MedDiary.com originated when the Founder of the company was diagnosed with a second chronic condition, after having launched an app (MyGiTrack) specific to his first chronic condition (Crohn’s disease). The Founder didn’t want to use two different apps to manage his health. The MedDiary.com health management platform has evolved into an enterprise-level SaaS-based system, supporting population management and care coordination for patients with multiple chronic conditions. The MedDiary.com system will soon receive approval from Allscripts to integrate into their Enterprise EHR system. We are now pursuing partnerships with regional hospital groups for clinical evaluations.

Bookacoach For decades, the $6B sports coaching market has operated on an archaic and unsafe process of finding, booking and buying private instruction. The complexity of managing private lessons for one athlete involves the use of yard signs, word of mouth, cash/check, and lengthy email exchanges. With more than 700K active coaches and 40M athletes ages 6 to 18 participating in sports instruction in the US, growth is expected to exceed $7B by 2017. bookacoach is an online mobile responsive web app platform that offers a simple and robust solution to the complexities of managing private lesson instruction for both coaches and parents. Coaches receive their BAC Safety Certification thru our exclusive background check API, offering parents peace of mind while booking. Upon launch, we were the featured trending story on mashable.com and since then have taken bookacoach to over 600 coaches in 33 states and 200 cities. This number continues to grow at a 50+ % growth month over month.

Courseload, the leading innovator in the aggregation, delivery and use of digital course materials in higher education, helps institutions increase student access to course materials, improve affordability and enhance learning outcomes. Courseload eliminates the barriers that have impeded the print-to-digital evolution in academia through a business model inclusive of all stakeholders, an innovative platform incorporating study tools and analytics to enhance learning and pedagogy and a team with deep experience in implementing educational technology solutions. Most recently, Courseload was identified as the leading contributor to a 12.5 percent increase in student retention at one of our partner institutions, Berkeley College. In addition, the IMS Global Learning Consortium recently awarded Courseload and its partner, Indiana University, with a Gold Learning Impact Award. Courseload has also been identified as an Indiana Company to Watch and Best Place to Work (2012,2013).

7PSolutions, LLC  delivers one comprehensive GPS-GSM monitoring solution to the pharmaceutical, biotech and life science industries for the transportation of climate control cargo, with integrated security and quality management. This technology is also being recognized by high-value and time definite manufacturers and service providers. Our company was founded in 2010 to fulfill an unmet need in the life sciences and transportation industries. Our management team consists of logistics, quality assurance and operations veterans who have cold chain and pharma experience. Our current clients include small and medium sized trucking companies, manufacturers of climate controlled cargo carriers, cargo airlines and major couriers. We are currently expanding our product offerings to include telematics fleet management for small vehicles, and enhancing our software to provide greater visibility to our clients of their location and environmental data.

Sapphire Education, LLC is using analytics and social collaboration to improve student academic performance. By allowing students to forecast their grades and share their academic knowledge with one another, we intend to use social metrics to enhance learning. We have seven confirmed high schools and colleges ready to beta test our software in the fall. Currently we are working on an algorithm that screens the web for relevant education content.

IN3 is a digital products company in West Lafayette that focuses on developing paperless solutions. These solutions include a note taking tool for conferences and classrooms named paperlessMe; survey tools; mobile documents; and directory applications.

Wasatch Photonics Wasatch Photonics is developing an imaging device using Optical Coherence Tomography(OCT)that will provide new information and evidence to physicians to aid diagnoses and treatment of vascular disorders. Cardiovascular disease (CVD) is a major complication of diabetes – about 65% of people with diabetes die from heart disease and stroke. Our product development is driven by trends in medical care requiring higher value physician patient interactions along with the growth trend of vascular disorders mirroring diabetes.

Wasatch Photonics (WP) was founded in 2002 in Logan, Utah to build volume phase holographic (VPH) gratings initially for the telecom industry. In 2010 Wasatch Photonics expanded into optical systems with the acquisition of Kiara Biosystems. This systems division has been focused on optical systems for Raman spectroscopy and optical coherence tomography. In the OCT space we have sold systems to researchers and OEM’s.

Evacua is using the ride-sharing business model to create an evacuation marketplace during emergencies of all kinds. Members can get out before a hurricane strikes, or even avoid missing that important meeting when their commercial flight gets cancelled. Resource sharing during these scenarios can lead to exponential savings, and improved efficiency. We have already secured sponsorship of the Global Congress of Travel Risk Management, and have been mentioned in articles surrounding travel startups on Tnooz and Skift.

SpeechVive enables people with Parkinson’s disease to speak louder and communicate more effectively through a spontaneous reflex (the Lombard effect). Parkinson’s disease is a degenerative disorder of the central nervous system which affects over 1.5 million people in the U.S.
90% of people with Parkinson’s (PWP) have hypokinetic dysarthria and cannot speak loud enough to be heard. SpeechVive has 4 years of clinical data which demonstrates the ability of the SpeechVive device to revive the patients voice immediately in over 75% of cases. Another 15% show significant improvement after wearing the device for 8 weeks. One patient recently commented, “I am tired of people talking over me as if I didn’t exist.” She is excited to try SpeechVive as soon as it is commercially available along with thousands of other PWP.

Animated Dynamics’ Biodynamic Imaging platform is a breakthrough biomedical technology that is like putting vital signs monitors inside living tissue to measure its health and how it responds to drugs…simply by shining light on it. It has applications for the selection of personalized cancer therapies, the discovery of new drugs and improving the efficiency of in-vitro fertilization.

Dynamic Auto Dealer Solutions, Inc. has created a Cloud-based Dealer Management System that supports the entire Dealership Lifecycle. Both New and Independent Dealers can now benefit from Internet Technology that doesn’t require additional sotware products to run on tablets or cell phones – our products already run on them because they were built from scratch on state of the art technology. Needless rekeying of data between business units and business partners is eliminated. With crisp designs and similar screen layouts, the front and back office adoption is quick and easy. We provide CRM, Inventory, Desking, Finance and Insurance, Service, Parts, and Integrated Accounting and E-Mail. New technology allows dealerships to reduce costs, time, and errors and provides real time reporting for both Sales and Service. We have joined forces with key automotive and financial companies to create a true Enterprise Resource Planning (ERP) package that also improves upon current DMS products.

Enfront.com empowers small business owners and field sales personnel to deliver person-to-person communication to the individuals and small groups important to success, for either relationship building or revenue building. Our software platform is online, putting custom content and actionable contact “at your fingertips.” Output media includes postcards, email, letters, and 3-dimensional mail. All production is handled behind the scenes by Enfront partners. Delivery can be immediate or at pre-defined future intervals. Enfront has established accounts coast-to-coast via independent Consultant Partners and headquarters sales to National Accounts. Our multi-media capability is providing an increasingly sought-after alternative to email only marketing, and Enfront is pursuing production partnerships with email players such as Indy’s Weblink International. We believe that e-glut and related marketplace noise represent an enormous opportunity, and we are positioned ideally.

BoxFox helps small brick-and-mortar retailers appraise and liquidate their excess merchandise via its B2B marketplace. Retailers can automatically determine their inventory value through proprietary web-based software and then sell it to authorized resellers. BoxFox charges resellers a tiered subscription fee and takes a small transaction fee from both parties.

PeeqMe For employees working in the ‘people economy,’ dizzying levels of value-destroying disengagement exist because people often feel misunderstood, misused and abused. How people work matters. PeeqMe socializes the personality, behavior and talent assessments that over 100 million people have taken with the right level of intimacy and simplicity to be useful. When people understand their style and their teammates’, when they use their strength and not weakness, and when they get positive not negative feedback, people do better together. By applying the smartest science, best practices, and social trends, PeeqMe allows professionals to know themselves, show their best, and grow with crowd-sourced, positive feedback. PeeqMe launched beta in June on iTunes for our high-potential, early adopting members. We are signing up small enterprise clients to pilot in higher ed, non-profit, professional services, and high tech. PeeqMe is developing enterprise functionality for a 2014 launch.

CloudOne Driving our business (and the cloud in general) is the dissatisfaction with the old ways of information technology: buy the hardware and software up front, pay to have it installed and configured, and then make expensive maintenance payments year after year that offer few new features or updates. Organizations were stuck with whatever they owned, even as their needs evolved. We’re using our unique capabilities to address this issue: 1. It’s economical, because organizations pay only for what they use, and we operate their software in the most expert and efficient way. 2. It’s elastic, because it grows and shrinks with changing business cycles. 3. It’s global, because everyone involved can connect from anywhere, anytime: sharing data, processes and knowledge with each other. Everything about business has become on-demand: utilities, facilities, staffing – and now we’re helping customers in all industries make the move to dynamic IT.

3DLT.com There are 200,000 3D printers currently around the world, and that number is growing fast. With a growing number of printers, there will be a growing number of 3d printable content. 3DLT.com is the Istockphoto of 3D printable designs. We provide makers the content to do much more with their 3D printers. Recent successes include TechCrunch Disrupt Battlefield Finalist/Alum, SXSW V2V Venture Finalist, X-Lab Winner.

AlGalCo, LLC has the exclusive license from Purdue University to commercialize a new technology in which hydrogen is generated on demand simply by adding water to a solid alloy comprised of 90% common aluminum. The deployment of hydrogen reduces the demand for oil as it replaces gasoline and diesel when powering any internal combustion engine or fuel cell. When hydrogen is combusted, it burns with zero harmful emissions, only water vapor. Since our feedstock is aluminum, it can be recycled indefinitely. AlGalCo is currently involved in numerous applications both commercial and for the military. Weekly, we invite all interested parties to visit our beta test site located at the city of Carmel Street Department garage. We operate a standard F 250 pick-up truck partially on our hydrogen. The results are a 15% increase in mileage and a reduction in harmful emissions. Testing for Revision 2.0 of our hydrogen on demand system is also demonstrated on the test vehicle.

Tymora Analytical Operations, LLC has been established to provide new research products and reagents to Research and Development (R&D) organizations within the life sciences market. Tymora has developed a set of highly effective technologies for the analysis of protein phosphorylation that relates to the onset of numerous diseases, most notably cancer. Tymora’s flagship products, PolyMAC and pIMAGO, greatly enhance an organization’s ability to discover and develop new therapies that combat disease.

As you can see, this is going to be an action-packed Showcase. I hope to see you there!