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Cash scan in fill swing at Springboard VC Forum
Some say venture capital heavy hitters weren't out in full force

By SALLY DUROS

(May, 14, 2001) It’s a “cash-scan.” Every entrepreneur knows it. Enter a room at a venture capital forum, like Springboard Midwest. Scan the crowd, your head swiveling like a periscope. Zoom in on the color-coded badges of the attendees with the cash, the investors. Head toward them.

At Springboard Midwest the color for cash was yellow. It was a standout in a sea of red, which was the color for businesses seeking capital.

It’s better form to wait for the investors to scan you. You start talking when the VCs come in for a closer look.

The entrepreneurs who presented at Springboard had the art of the cash-scan down cold. At the end of the day, almost every red had talked turkey with two to three yellows.

“This was the first step in proving what’s out there in terms of women business owners,” said Linda Darragh, Director of the Tech and Venture Program at the Women’s Business Development Center. “I think we have a model here, and now we have the rolodex to get people out.”

“Springboard went far beyond the event itself and will have a long-standing affect on women-owned businesses in Chicago,” said Lisa Flashner, Managing Director of William Blair New World Ventures, one of Chicago’s most prominent venture capital firms.

“This is all about networking,” Flashner said. “There’s a stronger link now between the Women’s Business Development Center/Springboard and the venture capital community. I hope they continue to build on that visibility.”

Darragh said about 100 venture capitalists signed up in advance, and about 80 were in attendance.

The 27 businesses that presented at Springboard 2001 – Midwest were seeking an aggregate $151.7 million in funding. Most were looking for second-stage financing.

If true to form with other Springboards, these CEOs should raise between $50 million to $75 million in the next few months, said Amy Millman, Executive Director of the National Women’s Business Development Council, which sponsors Springboard nationwide. The capital is almost secondary to the potential for strategic alliances.

“With venture forums, maybe 10% get funded.” Millman said. “For ours, the mean is 50%.” And results remain strong despite the economic adjustment. She attributes this to the strength of the businesses that are accepted by Springboard.

Springboard Midwest featured three biotech firms; no fewer that 5 software companies; eight technology-based business and financial services companies; as well as firms specializing in e-publishing, media, wireless, medical devices and marketing services.

Scott Glickson, co-founder of Gordon & Glickson, whose firm provides legal services to companies and was a sponsor of Springboard said that the quality of the investment opportunities presented was very good

“The mix of IT (Information Technology) Biotech, Financial services, they were very good quality companies,” he said. “Some of them were later stage than I expected.”

Flashner agreed. “I saw most of the industries that are relevant to me, and I saw a couple that I am interested in.”

Springboard augments high-level networking with six weeks of intense coaching and critiquing, improving the odds that both VC and CEO are talking the same language. You’ve got to talk cash to get the cash, and the conversations go a lot faster.

Terry Pahl, CEO of Armeta Incent Inc., is a seasoned CEO who learned her trade working for AON founder and chairman Pat Ryan.

Her technology firm has developed a dynamic interface used by banks and other financial institutions on their websites. It allows consumers to educate themselves about key financial and insurance products, and then brings sales people into the process when a well-informed consumer is ready to buy.

Springboard was the first time Pahl presented her company after a recent acquisition of another firm. She said Springboard helped her get focused at a crucial time.

“I've changed my pitch to, “Here is why a financial institution will want to buy this. Here is why salespeople will love it, and here's exactly what it does. And, you know, here's our exit strategy, and this is why this is a tremendous
opportunity for an investor at this time.”

Armeta Incent is seeking $10 million in Series B funding, and Pahl said she could be receiving her next investment within days.

Several others have begun discussions that could bear fruit. Darragh and the WBDC will track the participants’ progress.

But some entrepreneurs felt the ratio of red badges to yellow was high and that Chicago’s venture capital heavy hitters sat out Springboard. “Coaching is great. But what we need is the cash,” said Susan Bergman, founder and CEO of PreviewPort.com.

Others, speaking off the record, agreed that the top women investors showed up in full power, but the showing from some heavyweights was thin. The big firms were represented, but not necessarily in the twos or threes more typical at a venture capital forum.

The venue at Northwestern University’s Allen Center in Evanston, with a parking lot under construction, may have slowed attendance. Chicago’s venture community was out in force at the previous evening’s cocktail party downtown.

Sally Duros is a Chicago-based business writer who vcan be reached at Sally@SDuros.com.

GRAPHIC: Theresa Pahl (left) of Incent Inc. talks with Lisa Flashner, managing director of William Blair New World Ventures, during a forum to assist female entrepreneurs in assembling venture capital. ; JEAN LACHAT