By Robert P. Baker
The regular monthly meeting of the Venture Association New Jersey (www.vanj.com) was held on Tuesday, September 11, at the Marriott Hanover, Whippany, NJ. The featured speaker was Brad Svrluga, General Partner, High Peaks Venture Partners (www.hpvp.com), who discussed the criteria his firm uses to decide in what startup companies to invest.
“Our strategy is to focus primarily on Information Technology (IT), especially on new Applications that that are poised to fundamentally revolutionize an industry – disrupting it with game changing technology, a radically different economic model, or a value proposition that fundamentally changes the way customers behave,” he explained. “We are seed and early stage investors and look for capital-efficient companies, primarily those located in the Greater New York area.”
Svrluga cited a number of statistics documenting the fact that we are in an era of Mass Disruption. For example:
50% of all mobile phones are now smart phones.
50% of all the web-connected devices in the world are mobile.
One billion people are now on social networks.
The cost of launching an interconnected business is now 90% less than it was 20 years ago.
“A major factor driving these statistics is a phenomenon we call Convergence between Business and Consumer Applications,” Svrluga insisted. “Successful Consumer Applications, for example, are all about empowerment, or making compex tasks simple and easy. An example is Uber (www.uber.com), which consumers can use to eliminate the hassle of hailing a cab in a major city. Within minutes, a professional driver in a sleek black car will arrive curbside and the fare will be automatically charged to a credit card on file, tip included.
Successful Business Applications, on the other hand, are about simplification. An example is Dropbox (www.dropbox.com), which allows large files to be stored in a central location available to any web-enabled device, eliminating the need to store them on multiple devices. Johnson & Johnson is currently partnering with Dropbox to develop a proprietary corporate version.
Both Consumer and Business Applications are driven by the difficulty of performing complex tasks on a small screen, which they address by storing data in The Cloud. An example of a Cloud-based Consumer Application is RouteHappy (www.routehappy.com), a social review site for air travel, helping flyers differentiate and value their options such as WiFi availability, leg room, etc. in addition to traditional variables such as price and flight times. With access to these consumer preferences, the company can aggregate and sell the data to other businesses.
An example of a Cloud-based Business Application is Field Lens (www.fieldlens.com), which allows construction personnel on a job site to eliminate the need for clipboards and written notes, which must then be manually filed, by using a smart phone to take notes and photographs that can be instantly e-mailed.
“Of course, even if you have an Application that you think would interest me, you still need to play by the rules,” Svrluga emphasized. “I still need to know the size of your market and the demand for your product, as well as its importance and dependability. I still need to see your business model and meet your management team.”
Svrluga then offered some guidelines for entrepreneurs seeking investment:
· Manage your approach to potential investors. Be introduced by a trusted third party instead of cold calling or mailing a document.
· Do your homework. Be sure that your company matches the criteria used by the investor to make a decision.
· Anticipate the fact that the investor will perform due diligence and be prepared to answer any questions that may arise.
· Act like you have been there before. Be prepared to convince the investor that you are familiar with all the ins and outs of the marketplace.
· Expect something from the investor. Ask questions about which the investor has much greater expertise than you do.
· Know that it’s all about you. The investor is far more interested in having confidence in and being comfortable with you than your numbers.
Next Meeting October 23
The next regularly scheduled VANJ meeting will be held on Tuesday, October 23. The featured speaker will be serial entrepreneur Jack Kaplan, founder of Datamark Technologies (www.datamark.com), who raised millions for three successful high tech companies. Kaplan is the author of “Patterns of Entrepreneurship” and “Getting Started in Entrepreneurship” and an Adjunct Professor at Columbia Business School.
Advance reservations can be made by calling Clara Stricchiola at (973) 631-5680, faxing (973) 984-9634 or e-mailing [email protected] and mailing a check ($35 for members, $55 for non-members) to VANJ, 26 Main Street, Chatham, NJ 07928-2402. Registration at the door is $75 after 12:00 Noon on Monday, October 22.
Life Science Elevator Pitch Olympics November 12
For the first time, our popular twice-a-year “Elevator Pitch Olympics” will feature startup companies specializing in Life Science/Healthcare/Medical Devices. Presenters will have two minutes to make their presentation, which will be judged by a panel of expert investors. The winners will have an opportunity to obtain funding from Angel and Venture Capital firms seeking investment opportunities. Further information is available on the VANJ website at www.vanj.com. Space is limited, so be sure to sign up early.

