Mark Richey started his business like most entrepreneurs—with a nose-to-the-ground search for capital. He says he “knew better” than to count on bank financing to provide seed capital for his Internet-hosted telesales, telemarketing and customer service business. So he targeted the private investment and venture capital community instead.
“In 1997, I incorporated, and at that moment I started talking to people,” says Richey, president of Cincinnati-based Intelecare Inc.
Those discussions eventually led him to Innovest, a venture capital conference that rotates annually among Cleveland, Columbus and Cincinnati. Richey says the training he received and contacts he made after being selected as an Innovest ’98 presenter helped him complete a private placement of nearly $500,000 for his company within three months of the conference.
“It forces you to really crystallize your message,” Richey says. “I can get up on a soapbox and talk for three hours. Nobody wants to hear me talk that long.”
In fact, Innovest organizers have been known to cut off presenters who try to pitch their business plan longer than the allotted 10 minutes. A separate exhibit area at Innovest allows entrepreneurs to share detailed information with interested investors prior to and following their formal business plan presentations. That’s how Richey hooked up with three private investors who ended up putting $275,000 into his company.
“We’re about to close on another round of funding and the two vc firms we’re working with now were both at Innovest and remembered us from presenting there,” Richey adds. “It was a good foot in the door.”
Kurt Novak, president of a now-$2.1 million high-tech mapping and information company in Columbus, got more than one foot in the door after presenting at Innovest in 1995 and, again in 1997. His company, Transmap Corp., secured a $750,000 venture capital investment in 1996 from River Cities Capital Fund and another $1.3 million investment in 1998 from River Cities along with White Pines Management.
“We didn’t meet the people at Innovest,” Novak says, “but it got us some calls and we were able to develop relationships with them from that. You cannot go into the conference and expect to come out with a big check. It’s not that easy. It’s meeting people and through those people you meet other people.”
Andy Sokol met one of his business partners six years ago in Cleveland at a venture capital conference that was a predecessor of Innovest.
Sokol, who at the time owned a five-year-old consulting firm in Northeast Ohio, paired up with product developer David Smetana at the 1993 conference, and later, the twosome hooked up with investor Gerald Forstner Jr. to form UV Coatings Ltd. The company, which specializes in ultraviolet and sun-cured paints and coatings, hit the $5 million mark in revenues last year and is expected to approach $30 million this year. Sokol will present the keynote address at Innovest ’99.
“It’s a good audience, especially for early-stage companies,” says Richey, whose company has raised $1.44 million since his Innovest presentation last May. “The contacts you make could be very important. It also teaches you to have a thick skin. People are going to tell you your baby is ugly and you have to deal with it.”
INNOVEST ’99
May 11 & 12, Cleveland Marriott Downtown at Key Center
Speakers: Andrew Sokol, president, UV Coatings; Guy Kawasaki, CEO, garage.com
For more information about attending Innovest ’99, contact Teresa Kraus at (216) 229-9445, ext. 122 or [email protected].
Innovest ’99 is presented by Enterprise Development Inc., the Ohio Department of Development and the Ohio Venture Association. Host organizations are the Akron Regional Development Board; Benesch, Friedlander, Coplan & Aronoff; the Greater Cleveland Growth Association; Morgenthaler Ventures; Ohio’s Edison Technology Centers; Primus Venture Partners; PricewaterhouseCoopers; SBN and Ulmer & Berne.