'Venture fairs’ offer start-ups places to pitch

'Venture fairs’ offer start-ups places to pitch
By D.C. Denison
Globe Staff / December 15, 2009 


www.boston.com/business/articles/2009/12/15/venture_fairs_offer_start_ups_places_to_pitch/

Terry Swack, cofounder of a new software company, quickly set up her laptop on the podium. Her opening PowerPoint slide splashed on to the large screen at the front of the charmless hotel function room.

She paused for just a few seconds as an official placed a small digital alarm clock on the podium.

Now she could begin. She had exactly seven minutes before the clock would start beeping, loudly and annoyingly.

Swack, the chief executive of the Cambridge start-up Sustainable Minds, was one of 66 entrepreneurs giving presentations earlier this month at the New England Venture Summit at the Dedham Hilton - an event promoters said was “one of the premier venture conferences’’ on the East Coast.

The entrepreneurs were there to win over the venture capitalists and investors who could help them raise millions to get their new businesses going.

All of the presentations appeared to be well attended by conservatively dressed men and women, paying polite attention between furtive glances at their smartphones and laptops.

But for Swack, and many of the other entrepreneurs in attendance, such “venture fairs’’ are a calculated gamble. The business owners pay handsomely for the opportunity to pitch their companies to a crowd of potential investors ($1,400 in the case of the New England Venture Summit), in hopes they will find financial backing.

It seems counter-intuitive to pay to meet potential investors in New England, which generally ranks as the second-largest market for venture capital activity in the United States, after California’s Silicon Valley.

In Greater Boston, venture capitalists are not difficult to find.

Many maintain high profiles, speaking and judging at frequent free events at business schools. Nonprofit groups like the Web Innovation Group and the MIT Enterprise Forum host regular free events for start-ups to pitch business plans.

YoungStartup Ventures, which hosted the Dedham event, could not be reached for comment.

At least one prominent, venture-backed, West Coast technology executive doesn’t think anyone should pay to present an exciting business concept to people who are looking for investments.

Last fall, Jason Calacanis, chief executive of the Web-based start-up Mahalo.com, declared a “jihad’’ against the business of holding events at which entrepreneurs pay to meet investors, saying one company was charging start-ups between $4,000 and $6,000 to make eight-minute presentations to audiences of angel investors.

Yet after Terry Swack finished her presentation, which she smoothly wrapped up just as the alarm clock started its digital bleating, she said that paying a presentation fee was a worthwhile investment.

“All you can hope for from a seven-minute presentation is to capture someone’s imagination,’’ she said as she sat among the empty chairs in a now near-empty function room. “You want to interest someone just enough so they will walk up and give you a card, and say ‘call me’ or ‘send me your executive summary.’ It’s just a foot in the door.’’

Swack’s strategy makes sense to Howard Anderson, a lecturer at the Massachusetts Institute of Technology’s Entrepreneurship Center.

“What’s worse than paying to present is doing nothing at all,’’ he said. “You’ve got to get your idea out there.’’

Anderson, a former venture capitalist, said these conferences do deliver the promised audience of serious investors.

“It’s efficient,’’ he said. “A VC can spend a day at one of these conferences and see dozens of start-ups.’’

Kevin Stover, is cofounder and vice president of sales and marketing at VanDyne SuperTurbo Inc., which is building a company around a fuel efficiency device, happily made the trip from Fort Collins, Colo., to present at the New England Venture Summit.

He did not object to the $1,400 fee.

“In a utopian world, everybody would have equal access to money,’’ he said, “but in fact it’s very difficult to get a venture capitalist’s attention. This gives us an opportunity to say we’re here, we’re exciting, we’re innovative. Would you like to join us?’’

So was the trip from Colorado worth it?

“I got an awful lot of business cards,’’ Stover said, “and I made a lot of contacts that I’m going to be following up with.’’

Swack also felt that time and the fee was worth it.

“I got a couple of good leads,’’ she said, “and I met a few companies that may turn out to be worthwhile to work with.’’

Although Swack has attended a number of free venture capital events this year, she said it also makes sense to do events like the New England Venture Summit, “because you don’t know who you don’t know.’’

D.C. Denison can be reached at denison@globe.com.