LIKE SPRINTERS THEY CHARGED into the room — 350 small-business proprietors, wearing dark suits and no hint of economic desperation. They queued up in lines two-dozen deep in front of folding tables, each waiting for a two-minute chance to make a pitch to a venture capitalist or angel investor. And two minutes really meant two minutes: A plastic yellow egg timer sat on each table.
The scene was a venture-capital conference in New York City, sponsored by the networking group FundingPost.com. These events might look familiar to anybody who’s attended one of those employment fairs where businesses meet job seekers. At these affairs, in contrast, the entrepreneurs pay for a chance to pitch their ideas. And unlike job fairs, which have been dwindling as employers ratchet back hiring in a dismal economy, the numbers of venture investment conferences is holding constant, according to organizers like the FundingPost, Red Herring and the International Business Forum. It turns out the downturn hasn’t derailed venture investing as much as it has initial public stock offerings or small-business lending. While venture investing in general dropped in 2008, “seed” investing focused on companies in their earliest stages rose 19 percent from the previous year, to $1.5 billion, according to a survey by PriceWaterhouseCoopers. That’s enough of a carrot to lure would-be billionaires and their business plans to conferences all over the country.
At this affair, in a cavernous meeting room lent by sponsor Credit Suisse, a $125 ticket bought wine, goat cheese crostini and the chance to court Mr. or Ms. Bulging Wallet. About 65 angel and venture investors stood ready to catch the pitches. These gatekeepers were unfailingly patient and polite—and young. At least half the venture capitalists were in their 20s, while the entrepreneurial faces across the tables were, generally speaking, at least a decade older. The pitchers were also, often, better dressed. One scruffy dude with a brown backpack was the odd entrepreneurial duck. The stereotypical college-dropout founder, à la Bill Gates, is so last decade; Howie Schwartz, of FundingPost.com, says the average age of the folks doing the pitching has been rising steadily.
Do these speed-dating sessions ever lead to pay dirt? Apparently. While the odds are lottery-like, the dozen or so venture capitalists we spoke to each had a story of someone they’d met at a conference and later funded. “It’s a good way to start a relationship,” says Jeanne Sullivan, of StarVest Partners, who attends a half-dozen shows a year.
We watched the evening’s proceedings and then polled the investors for some tips on what impresses them—and what makes them wish the egg timer were a vaporizing gun. The consensus is that to win at this game, business founders must clearly but passionately explain who they are, what stage of development they’ve reached, how much money they seek, and what their company will do for the world—in two minutes, tops. “Fifteen seconds is even better,” quips Sullivan. These tips can improve your shot at the brass ring.