During the New Jersey Economic Development Authority’s (EDA) “Founders & Funders” event, entrepreneurs had the chance to go on ten minute, one-on-one “speed dates” with potential investors. The “couples” discussed business strategies and funding opportunities, and Jim Gunton of Tech Council Ventures explained why the event is so beneficial for everyone involved.
“It’s terrific because it brings together entrepreneurs and financiers in a very efficient way,” said Gunton. “The process is synergistic, and allows for more cooperation and collaboration.”
Gunton’s been investing for 20 years, and has been with his current vc firm for the last 15. During that time, he’s experienced an enormous amount of pitches, so he attends these networking events with an eye as to what to look for.
He says that the most important aspect of a pitch is customer validation, especially with entrepreneurs that are already in the market. Simply put, the best litmus test for gauging the possible success of an entrepreneur is seeing who’s buying the product.
“If you have good momentum in customer growth, that’s the biggest thing,” said Gunton.
In addition, Gunton listed off other elements he looks for in a startup or early stage venture. First, he likes to see a management team with extensive domain experience, which usually indicates prior business success. In addition, other attractive points are a growing market, strong defensible position and modest capital requirements. Too much required capital, he says, is a strong deterrent.
For every positive, he also has a list of deal breakers.
“An obvious deal breaker is not being prepared and not knowing the target market,” said Gunton. “Also, having unrealistic financial projections and unrealistic sets of terms can turn off investors.”
Gunton attended the Founders & Funders event representing Tech Council Ventures, an early stage fund that will be active later next year. Reflecting on his “speed dates” with entrepreneurs, he highlighted one specific startup that caught his attention: Orion.
Orion is a software company based out of Bridgewater. They have software that helps visualize analytics for complex asset landscapes, which provides greater transparency. Specifically, Gunton was impressed at the experience of the team, who had entrepreneurs come from places like Goldman Sachs to join the startup.
“They left well-paying jobs to take the risk of building a new business, and went a couple years without a salary,” said Gunton. “Now, they’re starting to see the benefits in terms of customer adoption.”
He noted that those connections back to the industry can be extremely helpful to entrepreneurs as they move forward into sales, since it can provide a familiarity for the current market needs. That experience, he said, was evident in their sales growth pipeline and the addition of new clients and customers they’ve been able to pick up.
The EDA holds these events semi-annually, and to date has provided more than 175 entrepreneurs the opportunity to meet with investors like Gunton to develop and pitch their startups.
