Monday, June 29, 2009

Report from June iEvening

Investor Panel Included: Ellen Sandles, Tristate Private Investors Network • Mike Segal, Joshua Capital • John Ason, Angel Investor • Roy Simkhay, Greycroft Partners

After a few slow months when start-ups seemed to have left the marketplace - the tide turned. Really turned. But now, entrepreneurs are staring at another kind of challenged marketplace. The investors are back with money – since most stayed out of the stock market – but it is a buyers market, so valuations are down and investors can really afford to pick and choose.

Entrepreneurs today really have to be able to survive on their own for as long as possible. But then again, strange things happen once you they in play: one entrepreneur who pitched his plan and won an iEvening in 2008 wound up being hired by an investor on the panel to run a different, but related company.

So his start-up turned out to be his job application! We wish him well!

At this event we were oversubscribed but nevertheless managed to cram 8 new companies into the pitching arena.

First was, a moderately profitable company selling men’s closeouts at highly competitive prices. Using SEO they have developed a good Internet presence but they need to build the software to handle more precise customer needs. Sometimes its better to be pre-revenue and offer the moon than be moderately profitable and ask for help to make the next step forward.
is a seemingly needed service that informs students if their class has been cancelled for the day. Apparently, this is a frequent occurrence and colleges have no obligation to inform the students. The investors however thought much bigger things than this and wondered if it could be used for all kinds of cancellations. As it happens, the next day I found that my dentist had unexpectedly cancelled my appointment and I never got the memo. So we get the pain!

Escapeer is an aggregator of escapist and adventurist events. There are plenty of these outings and the people who seek them out – the under 40 set - are a prized demographic. As slick as the site looked and as compelling as the presentation is, it appeared that the judges needed to be told just how big this market really is.

Parent Media is a company that first appeared to us as a profitable photo-contest site for proud parents. When we discussed the plan with the entrepreneurs before presenting - as we usually do - we found that the photo site was really the hook for a much larger enterprise: a loyalty site for parents with babies and of great interest to marketers like Proctor & Gamble and so on. So the pitch was duly restated and the proposition was compellingly delivered.

is a great idea in a market that is clearly about to explode – digitized medical records. This system enables people to keep their medical records in one place and have them verified as well when being admitted with ease by a doctor or hospital. However, the issue with an idea like this – even though it only needs to be used by a relatively small number of practitioners - is customer adoption. What the investors want to know is which doctors are using it and what will it take to get more to adopt it in a cost-effective way? is an interesting non-profit that could, in a way, be a profit center. It also suggests how welfare and other government services will be cost-effectively delivered. With this site, you can pick a child, family, block or region that you want to help and how - then the site makes sure the insurance, grocer or whichever service you support is paid as the recipient needs it. The money goes out as it is used and never directly into the hands of the recipient. Unfortunately, it is tough getting angels to think of investing in non-profits or, as one angel said: “most of my investments are non-profit!” On the other hand, if the business partners paid for the service – it could be a profit center.

is a kind of hybrid music and social media site that also has a special hankering for the Philadelphia sound. Even though the presenter is experienced in the field and comes with a gilt-edged legal background, it is tough to differentiate in this market place.

is a company that serial entrepreneur, Richie Hecker, has cleverly bootstrapped with some strong players from the online ad business. The idea is to sell ads that appear during that tiny moment between website loads. So the slower your site – the more you’ll be hammered. (All the more reason to get FIOS and drop your Wi-Fi router!) This could be the most successful little ad company since Gator, but it could also be just as hated! The judges probably felt it was somewhere in between.

The judges picked Parent Media as the winner with as the runner-up. Congratulations, and good luck at Private Equity Forum.

No comments: