Thursday, March 04, 2004
Entrepreneurs told how to grab share of venture capital
Even those budding entrepreneurs with no competition and the next revolutionary idea destined to become a hot technology product will struggle to get venture capital.
That's the message from the money guys attending the San Antonio Technology Accelerator Initiative's funding forum at the Sheraton Gunter Hotel on Wednesday.
At the event, venture capitalists gave aspiring entrepreneurs tips on how to succeed.
In-Q-Tel, a publicly funded venture capital group from Virginia that works with the CIA, said the government wants to finance new companies with great technology particularly in the areas of homeland security, biotechnology and nanotechnology.
The nonprofit and highly secretive venture capital firm, founded in 1999, has worked with 60 companies and provided more than 50 technology solutions to the CIA, said In-Q-Tel's Sydney J. Ulvick.
So far, In-Q-Tel has made $150 million in private equity investments in Pixologic, a California search engine software company; Attensity Corp., a software company in Utah, and Qynergy Corp., a technology startup in Albuquerque, N.M., among others.
"Traditional VCs have to answer to their investors; we have to answer to taxpayers," Ulvick said.
But few taxpayers know about In-Q-Tel or what it does. Congressional subcommittees and In-Q-Tel's board of directors provide oversight and guidance, he said.
In-Q-Tel doesn't work with companies on classified technologies, and no security clearance is required to get funding, Ulvick said.
The CIA is particularly interested in new technology that can help its agents sift through large amounts of data quickly and efficiently. More information is available at www.in-q-tel.com.
Homeland security, biotechnology and information technologies are among San Antonio's strengths, said Randy Goldsmith, CEO of SATAI.
Venture capital investing in the city has been on the upswing, he said. Last year, local companies received $40 million in venture capital, and so far this year local companies have received $30 million in venture capital, he said.
Craig Fryar, a serial entrepreneur and executive vice president with Austin-based Torquin Holdings, told entrepreneurs not to use hyperbole when pitching their companies.
Entrepreneurs also need to build great management teams, chose their investment partners wisely and know the true value of their companies.
"Valuation is really driven by supply and demand," said Jeff Blanchard, the managing partner of the First Capital Group, a venture capital firm in San Antonio.
During the dot-com boom, he said, company valuations reached unrealistic levels. But now valuations are pretty low, and a scarcity of capital exists in Texas — particularly for early-stage companies, he said.
Even those budding entrepreneurs with no competition and the next revolutionary idea destined to become a hot technology product will struggle to get venture capital.
That's the message from the money guys attending the San Antonio Technology Accelerator Initiative's funding forum at the Sheraton Gunter Hotel on Wednesday.
At the event, venture capitalists gave aspiring entrepreneurs tips on how to succeed.
In-Q-Tel, a publicly funded venture capital group from Virginia that works with the CIA, said the government wants to finance new companies with great technology particularly in the areas of homeland security, biotechnology and nanotechnology.
The nonprofit and highly secretive venture capital firm, founded in 1999, has worked with 60 companies and provided more than 50 technology solutions to the CIA, said In-Q-Tel's Sydney J. Ulvick.
So far, In-Q-Tel has made $150 million in private equity investments in Pixologic, a California search engine software company; Attensity Corp., a software company in Utah, and Qynergy Corp., a technology startup in Albuquerque, N.M., among others.
"Traditional VCs have to answer to their investors; we have to answer to taxpayers," Ulvick said.
But few taxpayers know about In-Q-Tel or what it does. Congressional subcommittees and In-Q-Tel's board of directors provide oversight and guidance, he said.
In-Q-Tel doesn't work with companies on classified technologies, and no security clearance is required to get funding, Ulvick said.
The CIA is particularly interested in new technology that can help its agents sift through large amounts of data quickly and efficiently. More information is available at www.in-q-tel.com.
Homeland security, biotechnology and information technologies are among San Antonio's strengths, said Randy Goldsmith, CEO of SATAI.
Venture capital investing in the city has been on the upswing, he said. Last year, local companies received $40 million in venture capital, and so far this year local companies have received $30 million in venture capital, he said.
Craig Fryar, a serial entrepreneur and executive vice president with Austin-based Torquin Holdings, told entrepreneurs not to use hyperbole when pitching their companies.
Entrepreneurs also need to build great management teams, chose their investment partners wisely and know the true value of their companies.
"Valuation is really driven by supply and demand," said Jeff Blanchard, the managing partner of the First Capital Group, a venture capital firm in San Antonio.
During the dot-com boom, he said, company valuations reached unrealistic levels. But now valuations are pretty low, and a scarcity of capital exists in Texas — particularly for early-stage companies, he said.
