Monday, February 11, 2002

Community

Springboard 'boot camp' drills entrepreneurs for crucial pitch

By Scott Boyter

There were no drill instructors screaming in the faces of recruits, no 10-mile runs to test their stamina. Attendees of a Jan. 31 Springboard Enterprises "boot camp" instead were drilled on how to capture venture capital.

The boot camp is the first step in an eight-week process leading to Springboard's Venture Capital Forum, to occur March 21 in Dallas. Springboard and the Texas arm of the Forum for Women Entrepreneurs, or FWE, are preparing about 20 female start-up companies for the most important pitch of their lives. Those executives' pitches, to be presented at the forum in front of scores of potential investors, could make or break their companies' chances of survival.

Springboard was created as a collaboration between FWE and the National Women's Business Council. The organization has helped about 200 women-run companies garner more than $650 million in equity capital.

"I wanted them to walk away with an understanding that they had what it took (to get funding), but they have to learn to communicate in a way that an investor communicates," said Jamie Wyrick, president of FWE-Texas. "So many times an entrepreneur knows all about their company, market and customers, but presenting to a customer is very different from presenting to an investor."

Boot camp topics focused on key elements of a venture capital presentation, getting the most out of the Springboard program, delivering a successful pitch and "doing the deal," or the steps necessary to close a funding round.

Kim Marinucci, principal with Winning Pitch Inc. of Palo Alto, Calif., suggested attendees use props and compelling language to help cement presentations. Painting pictures with words, she said, would create a lasting impression on investors. Other tangible details should include a picture of a company's competitive landscape, financial wherewithal and management team expertise.

"Don't give mission statements - give a high-level benefits statement," Marinucci said. "For example, talk about your company's ability to deliver X product that can save X dollars.

"If there's a choice between a 5-cent word and a 25-cent word, use the nickel word whenever you can," she said. "The most effective marketing geniuses are effective because their messages are so simple."

In the "doing the deal" portion of the boot camp, a panel discussed several areas of how entrepreneurs can attract a VC's attention, and what to do after gaining the ear of a potential investor. Among the most important points executives need to communicate, according to the panel, are the problem their product solves, competition, differentiation, barriers to entry that may protect from competition and exit strategy.

Moderator Guy Hoffman, a partner with TL Ventures, said he would be more apt to invest in a company with which he has previous experience. He added he would tend to steer clear from a company with an inordinate amount of members on its board of directors.

"Don't confuse a board of directors with an advisory board - the smaller the board (of directors) the better," Hoffman said. "There should be no more than five.

"We won't get into deals with a large boards of directors - if you assemble a tribe, you will need to get rid of most of them before I will invest in your company," he said.

Nearly 200 businesses - primarily in the areas of software, telecommunications and life sciences - applied for 20 Springboard forum slots. Those that made it, such as Julie Hamrick, gained access to a team of about 50 investors, strategists, lawyers, financial consultants, coaches, and a host of other volunteers devoted to making their presentation a success.

"The number of people they assembled (at the boot camp) was very impressive, and the coaches are first rate," said Hamrick, president of Addison-based Ignite Sales Inc., which provides Web-based applications geared to help financial institutions convert Web traffic into revenue. "They really worked very well on the personal side of the pitch.

"I know I will end this process with a much crisper and clearer message about my company," Hamrick said.