Not Yet Touched by an Angel: An Entrepreneur Tries to Sniff Out Cash in the World of Virtual Capital
by Tom Bunzel (email@example.com)
Twenty years ago I arrived in L.A. to pursue a serious screenwriting career, and found an entire industry devoted to helping me succeed, at my own expense. Folks who would get me an agent, a meeting or a deal–for a price–were waiting for me. Now I'm involved in a high tech start-up, and not much has changed.
About two weeks before the April 25th iBreakfast called ``Touched by an Angel," I sent in a short synopsis of an Internet venture in which I am involved, thinking I might pitch it to venture capitalists at the event.
Shortly thereafter, I was invited to attend the breakfast as ``press," an invitation I accepted figuring it would save me $60. But a few days later the iBreakfast notified me that I had been accepted as a presenter at the event.
At this point I reviewed the list of panelists and found that two of the five were basically consultants, which meant that they were out to sell their services (help us with our business plan, etc.) and probably had no real money to invest.
A third panelist was a marketing person, so again, he had no investing dollars but a desire to sell services. The angel on board was really no angel–he was head of an angel ``network." Not much of a network though because it had no Web site I could find online. He most likely had no money to invest.
So I notified the event planners that I had the free press invitation, which I would use, unless they would let me present and also attend for free. As I anticipated, they said that presenters needed to be paid attendees–the breakfast cost too much to put together.
So I decided to go as press.
The morning of the event I almost blew it off–7:45 is kind of early for a writer of any sort to appear in a suit and tie, even for a free breakfast. But it was at the Beverly Hilton, so I figured what the hell. I registered as press, and thought nothing of it when I discovered my name, and my venture's information, in the printed program.
I figured it had been too late or just too expensive to remove. I went networking. Professional panhandlers beg for spare change–I was looking for $200,000. As it turned out, that was small potatoes.
Scanning name tags for the words ``venture," ``investor" or ``bank," I asked half a dozen folks point blank if they had any money. I mean, why mince words? The answer was uniformly no.
I pressed on, stopping at a table with six ``suits." ``Any of you guys have any money?" I asked. They all laughed, but their pockets were empty and checkbooks put away. I asked a fellow journalist if he had discovered any genuine investors in our midst–he shook his head.
The event began and the moderator asked for a show of hands. How many entrepreneurs? About 50. Journalists? 40. Service providers? The same. Venture folks or investors? One. One women at the table in front of mine raised her hand.
I turned to the guy next to me and said, ``She'll be popular at the break."
And it began–the first two pitch people were excellent and I thought to myself how worthwhile this was–I was learning a lot of interesting things. I marveled at the way the panelists–folks with no money to invest–could bust these poor presenters' chops.
Halfway through the third presentation, the money women got up to leave. No fool, I followed the only person with a supposedly fat checkbook out to the foyer. After a brief introduction, it turned out that, she had misunderstood the question, and had not a dime to invest. Perfect.
I felt a hand on my shoulder–it was my friend Donald. ``Tom, they just called your name," he said. ``You're up."
It took a second for it to register. I was suddenly expected to present–an audience of around 150 well dressed but not so well heeled new media types were expecting me to tell them about my venture. Community Vision.
But I was here as a journalist. I had no slides, no presentation, had done no preparation. Three hundred eyes turned expectantly in my direction as I re-entered the ballroom. I approached the podium–the moderator smiled at me.
``Allison," I whispered, ``I emailed your office and we agreed I wasn't going to…" I looked out at a crowd waiting to hear something singularly significant from me. ``Screw it," I said to myself. Here goes.
I apologized first, explaining that I was at a disadvantage in that I was attending the event as a journalist, not expecting to present. I had a slight conflict–I am also director of corporate communications for Community Vision, a venture based in Las Vegas with an office here in Los Angeles.
I explained that our team of programmers in El Segundo, using the new Linux operating system, had created a suite of groupware applications comparable to enterprise solutions that are sold to corporate clients for upwards of $100 per user. ``But by selling these services to an entire community, and using a shared revenue model based on e-commerce, we can offer these services at $1 per user per month, and they become totally free as use increases."
Jesus Christ, I thought to myself, these people are actually paying attention. What else do I tell them?
What our software does, I explained, is connect each community member instantly to local services, like schools, churches, businesses and other neighbors. Unlike virtual portals, like Yahoo or Excite, ours is truly localized because the scope for each service is set at the community level. So a search for a babysitter can be shared among neighborhood parents, and a search in Westwood will not yield a babysitter in Glendale.
``How much time to I have left?" I asked. A minute and a half. ``Perfect, here's how the groups work," I explained. Everyone gets a program similar to Microsoft Outlook, with a calendar, email, contact list and to-do's–but now, you can have one grouping of events for your child's soccer team, another for your home business contacts, and another for your golf game. You can email or check schedule conflicts with any of these items, filter or sort by group or plan events. And if you think about the e-commerce component, inside the calendar, one of your groups can be devoted to music, which you share with your friends, but when your favorite group puts out a CD or goes on tour, if the event is local, it's on your calendar within the scope you want–as far as Anaheim or just locally in Westwood."
``With our revenue sharing model," I concluded, ``the service starts to pay for itself after the user spends $5 online, which at this point, is ridiculously low. Users will buy through the community to get these discounts, and see their dollars go back into the community. We have an incredible distribution model which I can't share with you at this point, but our full business plan and investor presentation is available under NDA."
I figured, wow, I got through that OK. But they were actually applauding and the first panelist, whom I had contacted unsuccessfully about the venture on several prior occasions, was suddenly enthusiastic.
``This is a real community concept, I love it," she said, and asked all the right questions about what it includes and how it works. Other panelists were more skeptical about the revenue potential and shopping component, but I hardly had to respond–the other panelists actually explained it to them for me.
After a few questions that avoided the many areas I know nothing about–revenue projections, upselling, downselling, and other buzzwords for MBAs, I bounced from the stage to more applause. I even stopped off to tell another presenter I wanted to speak to him later about his product.
As the program concluded, several attendees came to me and congratulated me, and asked for my card. At this point I was no longer such a wise ass, but asked if they had any money a bit more diplomatically.
``What is your interest?" I inquired, and one guy scribbled a dollar sign on his business card.
Up on the stage the judges were conferring. What a great story, I thought to myself. And then it happened.
``The winner of today's iBreakfast for best presentation is… Community Vision… Tom Bunzel."
I was stunned–I had no slides, no PowerPoint, no notes and no business even speaking. If my friend hadn't grabbed me I might have been passed over entirely. Now I was onstage getting my award (a T-shirt) and having my picture taken.
My journalist friend Rob shook my hand and had a suggestion. ``Next time you can put together a killer PowerPoint presentation with slides of financial and stuff."
``You know what, Rob," I replied, being one who uses PowerPoint religiously, ``I was better off without it. I wouldn't have had the adrenaline or the primal fear of making a total ass of myself."
Other well-wishers came forward, I collected a dozen or more cards, and eventually went over to talk to the panel. My female champion–the one who truly ``got it"–again asked why I hadn't come to her with the venture. As diplomatically as possible I said that I had made a few attempts, but would contact her and her new partner again.
Another Angel on the panel wanted to find out more. I agreed to visit his Web site and register. There was funding available, he suggested, and his commission only kicked in if we actually got the money. That worked for us.
On the way out I spoke to the final panelist, the one who had raised the most objections to all the presenters, and didn't quite ``get" our e-commerce model. He had replaced the marketing person on the panel.
He had no money, no Web site, and was listed as being part of a network of angel investors. I asked him how one gets access to members of this network. That wasn't quite ready yet, he told me. I looked at his credentials in the program, and they were impressive in terms of organizations and committees but the bottom line seems clear–he is a technology lawyer looking for clients.
I left the Beverly Hilton in a cloud of amazement, wishing my parents could have looked down from wherever they might be and witnessed this bizarre and yet strangely satisfying event. Then I wondered about something else… because after all, the proof is in the funding, so…
… did any of these people actually have any money?
Postscript: As a result of that morning, we have entered discussions with an ``incubator." As this is written the discussions are continuing and attorneys' fees are mounting. So it goes in the land of Virtual Capital.
Note: to pitch your venture to a ballroom full of people with no funds at their disposal, go to http://www.iBreakfast .com.
Tom Bunzel works as ``Painless PC," a consulting and training facility in West Los Angeles, specializing in business, presentation and Web-authoring applications. He can be reached at (310) 286-0969 or firstname.lastname@example.org. To find out more about Community Vision, go to http://www.painlesspc.com/cvi.html
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