It can be a heartbreaking search for an entrepreneur with a great idea to find an investor interested in what they have to offer.
Likewise, investors say it’s grueling to meet one entrepreneur after another who just isn’t their type.
Now, they can hookup virtually on Invertual, a global matchmaking website that promises to get entrepreneurs connected to investors.
It’s like an online dating site for entrepreneurs and investors who are serious about establishing a lasting relationship, said Jeff Thomas, co-founder of Invertual, a Colorado Springs based company that launched Wednesday.
Entrepreneurs and investors can get to know one another online by chatting and sharing financial information privately before they make a commitment.
“The thing that I have seen in the last few years, is that it really is a courtship,” Thomas said. “You have this great idea, and you think people will throw money at you. That is not how it happens. Not only does it require a great idea, it requires a relationship and trust; so, an investor can see a return on investment.”
Invertual’s matchmaking promise makes it different from its competitors, which either offer websites for entrepreneurs to pitch their ideas or offer a list of angel investors for entrepreneurs to contact.
On Invertual, an investor can join for free and list the characteristics they are looking for such as high-tech firms, or only firms that have been in business two or more years. The entrepreneur can join the site for a $40 monthly fee. And, then computer software makes the match.
“It is specifically designed and created to match the right investor with entrepreneurs who are seeking capital,” Thomas said.
Invertual.com is a Web 2.0 platform that allows investors interested in first-look opportunities to find those companies that meet their business philosophies. The site allows investor groups to discuss projects in private, through chat rooms, saving them travel time.
“Invertual has presented at five-minute pitches across the Front Range – we know how miserable that process can be – it can be expensive to fly around without assurance of a good outcome,” Thomas said.
It can also be frustrating to the investor, Thomas said. High Altitude Investors, a Colorado Springs angel investor group, has often expressed disappointment when entrepreneurs pitch ideas that are not quite there yet.
“I have been on both sides of this fence – raising capital and funding companies,” said Delray Wannemacher, Invertual co-founder. “Both sides are equally inefficient.”
Invertual will change the hookup process. Investors can rate companies using a built-in due diligence evaluation form – it’s so they can compare investment opportunities, Thomas said. It’s a chance for investors to properly vet companies, he said.
There will also be self help for those start-ups that just aren’t marriage material. They will have a chance to evaluate themselves and identify their weaknesses and areas on which they should focus.
The long-term goal is to have a tutorial and training program on Invertual for up-and-coming entrepreneurs to get started.
And, taking advantage of the new legislation under the recently approved JOBS Act, Invertual plans to offer crowdfunding, a way for entrepreneurs to raise investment money over the Internet. Crowdfunding has become popular in recent years for art and technology projects and start-ups.
Sites like Kickstarter.com have been successful with nearly half of all the projects on the site fully funded to the tune of millions in public pledges. But, that site is purely for donations. Under the new legislation, those who give money to a business are investors in the company.
Invertual software will also help entrepreneurs track the number of investors they have approached and guide them through a process of compliance with regulations from the Securities and Exchange Commission.
Jan Horsfall, Colorado Springs entrepreneur and co-chair of Startup Colorado, said the Invertual site knocks down the barriers which get in the way of the entrepreneurial and investor transactions.
“Sadly, I’ve watched so many new companies with the right product and right approaches simply evaporate due to a lack of access to basic investment capital throughout their funding cycles,” he said.
Invertual is building its investor data base now, Thomas said.
“It’s amazing the number and percentages of marriages that have happened through matchmaking sites,” Thomas said. “That is our concept. Allow folks to get to know each other … we are hoping it will create the same courtship environment as in online dating sites.”