Startups Pitch Angel Investors at Capital Factory Demo Day
October 11, 2012 by 1 Comment
When the presentations were through, investors said there were definitely companies they would be looking into and possibly writing checks for.
“I completed my first round of funding before leaving the room,” quipped Bryan Menell, CEO of SubtleData which integrates apps with point of sale data streams. He’s also head of AustinStartups.com and in charge of Austin High Tech Happy Hour. He’d made a dinner date with one investor who showed great interest in his company.
“I’ve seen a lot of those companies before. I’ve been following them,” said Rudy Garza, founder and managing general partner of G51. “Some of them are getting closer. We expect to write a check by the end of this year or early next year.”
Rick Timmins, Chairman of the Central Texas Angel Network said Josh Baer did a good job bringing in companies “that have what we’re looking for, in short, product and customers.”
“These companies have traction in their markets, they’re at very good stages of development,” Timmins said. “They have what we look for which is not how big the market opportunity ‘should be.’ I want you to show me how you’re going to acquire customers one, two and three….I have a company I invested in recently, approximately $750,000 because they had acquired two customers. Their revenue from the two customers was less than $200,000. But what they were selling was disruptive enough to get people to stop what they were already doing and switch.”
Timmins said he would investigate a couple of the companies more deeply and probably write a check because of the event. But he planned to discuss the presentations with his fellow investors first.
“I will share my thoughts and ideas with several folks,” he said. “I’ll make up own mind but I’ll consult with the other investors here. I’m not competitive at all with other angel investors.”
The only investors present were those invited by Capital Factory because they’d recently written checks, according to demo presenter Bart Bohn. Bohn is founder of AuManil which provides analytics for game studios on the most lucrative online and digital game players.
Because of the theme of the event, no startups were seeking more than $1 million. The theme was startups that could reach $1 million in revenue with less than $1 million in funding. As Joshua Baer, founder of the event pointed out, too many companies don’t bother with small funding amounts they have an 80 percent chance of getting because they’re hoping for a giant investments they have 10 percent chance of getting. But if a company can build itself to profitability on smaller investments, sell for $20 million—a tiny amount by Silicon Valley standards–and reap $10 million out of the deal, they still have $10 million. That’s the sweet spot for Austin.
It’s a strategy Silicon Valley could learn from, according to investor Larry Chiang who lives in Palo Alto, teaches tech entrepreneurship at Stanford and loves Austin for its ecosystem of music, entrepreneurship and community.
Garza called it “fishing where the fish are.” Both the numbers of intriguing startups and the numbers of investors are building in Austin, with each piece of the ecosystem spurring growth in the other areas. Austin’s ecosystem, he pointed out, has players at every level. There are companies like his, Capital Factory, Austin Tech Incubator and Tech Ranch that can offer seed money. Then there are the venture capitalists like Austin Ventures and Silverton Partners. Then there are the heavy hitter investors. Austin’s growth in the startup world is building as each of these players gains substance.
Frankly, Garza said, the seed capital is “the funnest part.”
“Everybody’s hair’s on fire. Checks are coming in to the bank…building a company from zero to $5 million is the best part.”
Besides AuManil and SubtleData, Other presenters included Compare Metrics, Engine, Kin Valley, Rockify, Smart Picture Technologies, Stormpulse, Taskbox, Visible Health, Vivogig, Whoosh Traffic, Zing Checkout and One Spot.