Former Managing Director, Investments
Douglas Roth Director, Investments
Russell “Russ” Tweeddale, an engineer, Marine, and investor with Connecticut Innovations for more than three decades, sat down this week to talk shop with Douglas Roth, CI’s director of investments. Over the course of their hour-long chat, during which they covered everything from fuel cells to the importance of strong advisory boards, Russ imparted some hard-won pearls of wisdom he gained while investing more than $75 million in numerous Connecticut companies. Russ’s notable successes include many of today’s industry leaders, such as Affomix, AxioMx, Proton Energy Systems, CuraGen Corporation, Genaissance Pharmaceuticals, Bio-Plexus, International Telecommunication Data Systems, Open Solutions, and Ipsogen.
Capital is the lifeblood of any startup. Because of this, too many entrepreneurs blindly charge forward raising money without understanding the importance of the process. Raising capital is generally not a skill that most startup executives have. Why? Well, for starters, fundraising is not something an entrepreneur does every day. It’s also a distraction from the important effort of launching and operating a business. A young company needs money and generally needs it now, but many entrepreneurs fall victim to the belief that four quarters from one funding source is the same as one dollar from another. But smart entrepreneurs aren’t so cavalier about something so important! Not all money is green. The sources from which you raise capital can make all the difference between success and failure.
Connecticut Innovations yesterday announced that it served as lead investor in
NovaTract Surgical Inc.’s Series A round of financing of $2,375,000, which included money from new investors Vital Financial, Golden Seeds and Enhanced Capital. NovaTract continues to progress its dynamic retraction device to promote laparoscopic surgeries with limited or single incisions. This Yale-based technology is headed toward market rollout in 2013. CEO Ellie Tandler has advanced the company from startup, to pre-seed, seed and Series A funding rounds in just two years! Well done NovaTract!
NovaTract is also the first of CI’s portfolio companies to have progressed from a Pre-Seed Fund investment through the pipeline to receive Series A funding, a significant achievement.
See link to our press release here.
Managing Director, Investments
CI's Patrick O'Neill (far right) with executives from ASOCS, an Israel-based chip manufacturer.
Last week I was able to attend a conference featuring technology companies from Israel. The event, hosted by youngStartupVentures, featured some interesting panels, and some promising companies. I was impressed with the breadth and depth of companies that originated from Israel, a country about the size of New Jersey. Life sciences, IT, mobile, and clean tech sectors were all well represented at the event.
One of the panels featured some experienced VCs who gave their take on the best way to present a company, and what they look for. One investor recommended a maximum of three slides. The first with the company’s name, the second with the company’s idea, and the third stating why the company had a “Glimmer of Greatness” (i.e. that one aspect (or the many aspects) of the company that would give him reason to think that the company just might be able to be the next Google. This was the same gentleman that told the story of someone in his partnership declining a company because he did not like its name. As the story goes, the partner asked: “Who in their right mind is going to buy a company called ‘Yahoo’.”
Another exchange showed how many of these experienced VCs were more concerned with the person than the product that the company was going to sell. Who is this person? What have they done? What have they accomplished? These were the first three questions they asked themselves. And then came the real shocker. Thanks to Facebook, LinkedIn, Twitter, etc., all you ever wanted to know about your potential CEO is right there for everyone to see.
So the major takeaways for me:
- It might be time for you to scrub your online profiles.
- If you are looking for VC money, be sure that your resume fits an entrepreneur/CEO profile:
- Have you taken risks?
- Have you been the “decision maker?”
- Have you held significant responsibilities commensurate with those of a startup CEO?
- If the answers to these questions are not immediately clear in your CV or resume, perhaps it needs some work.
Finally, if you are presenting your company, here are three simple pointers to help you convince an investor to part with his or her money:
- You need to know your company better than anyone else on the planet – never mind in that room. You should be able to give your presentation blindfolded. Practice it, know it and be able to recite all of your facts, figures and the story at the drop of a hat.
- Keep it simple. Do not get lost in the details in the presentation. Most VCs are generalists, which means they know a little about a lot of things. What they want to know is: what your company does, why you are better, who is your team, how you will make (lots of) money, and how the investor will be able to exit the company with a healthy return.
- And most important, show that you have the drive, the energy and the passion to make your company a success.
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