Venture Capital Investment - Is my business attractive enough to attract VCs? A MetaCityOnline Editorial
Harris & Harris Group, Inc., Presenting.
Nortech - February 2007 event
Harris & Harris Group presented a program on venture capital at the Holiday Inn in Independence. Essentially, they used their own operation as a sort of prototype for other venture capital operations. In truth, this makes as much sense as any other present approach. VCs (venture capitalists) vary a great deal in funding sources and investment profiles. One VC reported thoroughly and accurately makes a better report than a thousand VCs reported purely on conjecture.
Harris & Harris is first of all, publicly funded. This means they are actively traded on a stock exchange, in this case NASDAQ under the ticker TINY, and is subject to SEC rules and regulations. Naturally, the presentation had a "safe harbor" statement, directing investors to consult the prospectus prior to investment. TINY reflects their focus on "tiny technology" - nanotechnology, MEMS (MicroElectronic Machine Systems). They provide both early "seed stage" and "expansion phase" funding. The investment leadership comes from scientifically trained professionals, in keeping with the need to be able to critically review the science and technologies that form the basis of the prospects business plan, and mark the prospect as unique and difficult to duplicate. This technical diligence is balanced by financial diligence as required in keeping with fiduciary trust.
Newcomers looking for a fast charging white knight will be disappointed. While the expertise exists to operate with due deliberate speed, the nature of the risk tends towards syndicated pools of VCs. Harris and Harris may LEAD, but they are unlikely to be the sole investor. They will generally venture between $100K-$4M to the syndicate. The timeline is often a long one - 4 years till the first deal is considered fast, and 7-8 years is customary.
MCOL editorial comment: VC technology deals require a lot of confidence in the honesty, business realism, and technological acumen of all parties. This ain'ta gonna happen over night. If you are a prospect, VCs expect you to make mistakes in technology, human relations and finance. One big question is in how well you learn from these and institute SYSTEMIC correctives. They want to observe how this process operates well before they commit investors' money.
Supplemental: We also followed up with inquiries with a couple of other VCs. One was Jump Start, a State of Ohio revolving fund and the other is Mergenthaler, operating out of New York City. We asked them what they like to see on a prospects website.