Venture capital attracts minds to share ideas

Entrepreneurs wanting venture capital should have an articulate “elevator pitch” primed for any moment of opportunity, several investors said at a venture capital event last week at The Broadmoor.

Venture capital provides seed money for budding businesses.

The event brought investors from California to Texas together with Colorado Springs start-up companies and business leaders here.

“We’re like Social Security for the Colorado workforce, except we have money.”

– Greg Smith,

Colorado PERA

Investors also look to the personnel gathered by the entrepreneurs.

“If someone can articulate it very well, your elevator pitch is as important as how you get in touch with me,” said David Cremin, founder and managing partner of DFJ Frontier, a firm focusing on West Coast and New York media and technology investments.

“We have extended dialogue with the entrepreneurs,” said Bill McAleer, founder and managing director of Voyager Capital, with $370 million in capital. “We look very carefully at the teams.”

“We spend several months getting to know the partners,” agreed David Odom, principal of Arsenal Venture Partners, an investment firm with a focus on power and energy, IT and communications.

Cremin also encouraged keeping the founder at the heart of the company.

Successful people tend to reinvest, said Bill Miller, founder and managing partner of PV Ventures, a Colorado Springs-based venture capital fund focused on investments on Colorado’s Front Range.

Investing in Colorado businesses is more difficult for a venture capital firm based in Seattle, the home of McAleer’s Voyager Capital, he said.

It’s entirely possible, but “You have to be careful,” McAleer said. “You have to know the entrepreneurs well.”

McAleer also said referrals are “a big advantage.”

“Don’t waste your time making a business plan,” Miller said. “PV Ventures will do one investment this year; we’ve screened 40.

“It’s hard to get attention,” said Miller, who encouraged attendees to refine the pitch to 25 words. “If they’re compelling enough, they’ll get a look.”

What doesn’t work?

Using buzz-words doesn’t work obtaining venture capital, said McAleer. Instead, he said, “I really want to know what this is going to do for our customers.”

Telling the venture capitalists there is no competition doesn’t work either, said David Odom, principal of Arsenal Venture Partners.

A “deal-killer” for Kirk Holland of Access Venture Partners, is an entrepreneur saying, “I hadn’t thought of that yet,” to a question. Access Venture Partners is an early-stage venture capital fund.

PERA funds

Colorado’s Public Employees Retirement Association manages $43 billion in investment capital, said Greg Smith, executive director. Returns last year exceeded 12 percent.

“We’re like Social Security for the Colorado workforce, except we have money,” Smith said.

Smith explained the Colorado Mile High Fund is a $50 million co-investment program designed to invest in Colorado companies.

“The introduction of the Colorado Mile High Fund is the result of PERA working in conjunction with Gov. Hickenlooper to address the goal of making capital available for Colorado-based businesses, and this effort benefits the Colorado economy as well as the Colorado PERA membership.”