Richmond’s Venture Forum offers start-up entrepreneurs the opportunity to make a 5-minute capital pitch at its bimonthly luncheons. Four veterans of the 5 Minute Forum returned to the Venture Forum yesterday to share their success stories and insights from the trenches of entrepreneurship.
Each of the returning veterans had a different business model – auto racing, college internships, supermarket business process software and health insurance – yet each had the same advice for start-ups looking to raise capital to bring their idea to life: Don’t give up.
Ricky Dennis, founder and president of Arena Racing LLC , the arena-based, half-scale-car racing league, said, “I had just finished my second season in Norfolk building the [Arena Racing] prototype, and I was broke.” He went on to raise $2.5M, and has successfully launched Arena Racing in Hampton Roads and Charlotte, with Grand Rapids, Mich., joining the list for the 2008-2009 racing season.
Dennis recently hired his own boss, Bob Keane, who has recently joined the company as CEO with a solid background in building and running high-growth companies. “I grew up in racing,” said Dennis, “and I recognized that I needed to bring some solid business management onboard. I think with my heart. I needed someone who thinks with his brain.”
Mason Gates, president of Internships.com, is on his third start-up. After launching Gates Communications in 1991, built with capital raised at the Venture Forum as a direct result of his 5-minute pitch, he sold that company in 1996 and went on to help build JobsDirect.com in New York. That company was sold to Korn Ferry International in 2000, and Gates returned to Richmond, where he started his current company, Internships.com.
The new company works with college students across the country to match them with internships, and is expanding to colleges outside the US. Gates said of his first visit to the Forum in 1991, “I found out about it through the Yellow Pages. I called Stan Maupin and Gary LeClair [the founders of the Venture Forum, then called the Richmond Venture Capital Club], and they guided me through the process.”
Bill Lecznar, president of Synergy Systems, Inc., a food/retail industry logistics and process software company, was seeking his first round of venture capital after starting the company with the help of angel investors. “My accountant introduced me to an investor, who introduced us to other investors.”
Lecznar also said that starting a company in Richmond has some unique challenges. “We learned that if you can give it away in Richmond, you can sell it anywhere.” He said that the beta test of their software in Richmond convinced Ukrop’s to come on board. That opened the capital pipeline for the company.
Paul Kitchen, CEO of nHealth Inc., a new group health insurance plan dedicated to consumer-driven health care, said his company was near the end of a first-round capital raise of $12M when he presented at the Venture Forum.
“We’re entering a $2 trillion marketplace, and we needed to convince investors we could take on the competition,” said Kitchen. “We’re looking to start a new revolution – consumer-driven health care.” Kitchen has taken a strategic approach to capitalization, finding investors in the pharmaceutical, dental insurance, and insurance brokerage sectors. “Most of our investors are small business owners.”
All four entrepreneurs agreed that the opportunity to present a 5-minute pitch was a win in itself, giving them the confidence to keep pitching.
Said Lecznar: “The preparation for the 5-minute pitch was great experience.”
Said Dennis: “I can talk about arena racing for two days at a stretch. This helped me think through how to tell the story in 5 minutes, in front of people. Seeds were planted then that I’m still reaping.”
When asked about the impact of a slow economy on finding capital for new business development, each of the four panelists said that good ideas will always find investors. Each also noted that the first hurdle any entrepreneur has to get over is proving his “great idea” is a workable business idea. Passion will get you rolling, but revenue generation – sales – is what will attract investors. And don’t give up.
This story was filed by R'Biz Casey Quinlan, mighty mouth and storyteller in chief for Mighty Casey Media, who handles public relations for the Venture Forum.