Among the legitimate complaints of many entrepreneurs are alleged investment conferences they pay to attend, only to meet a room full of service providers who solicit business from them! Here are 10 ways an entrepreneur can determine an appropriate event and calculate its value, written by an investment banker.
(PRWEB) October 11, 2005 -- Among the legitimate complaints of many entrepreneurs are alleged investment conferences they pay to attend, only to meet a room full of service providers who solicit business from them! How can an entrepreneur determine in advance an appropriate event and calculate its value?
On November 17, Starlight Capital (www.starlightcapital.com) and MJ Segal Associates (www.privateequityforums.com) will host Private Equity National Venture Forum in New York City. Eleven of the past thirteen events have sold out, and companies that have presented there have subsequently raised over $200 million. Although the event is not appropriate for all companies, and is, in fact, invitation- only for both entrepreneurs and investors, its successful format and transparent information prompts organizer and investment banker, Bryan Emerson, to offer the following suggestions to entrepreneurs who want to evaluate the best venue for them.
Ask the investment conference organizer the following:
1) Where is a list of recent attendees? Although this is historic information, it indicates the contact base of the organizers. Be skeptical of evasive answers. (Then visit the websites. If they are investors, do they invest in your stage deal and industry?)
2) Do serious investors pay to attend or is this a “free drink” social event for them?
3) Is the marketing material packed with a list of sponsors? Then the room will be, too.
4) Does the schedule offer lots of opportunities for break-out sessions and networking? “One-on-one personal conversations provide crucial feedback, missing from a Power Point presentation to a silent room.”
5) What publicity about the entrepreneurs (as opposed to the event) is provided before, during, and after the conference?
6) What follow-up support exists?
7) What presentation preparation occurs?
8) Does the organizer make money only on from registration fees, or is he invested in the entrepreneur’s quest for financing? (This would be legal only for NASD registered investment bankers. Others cannot receive “back-end” fees.)
9) What has happened to prior presenters? Have they raised money, been acquired, gone out of business, or revised their business plan based on feedback from investors? Can you call a prior presenter?
If the audience appears appropriate, Mr. Emerson encourages entrepreneurs to calculate the value of the event by assessing the cost of meeting such people separately over a logical length of time. For example, a recent private equity raise by Starlight Capital required 1500 phone calls by three people to result in investments by 40 parties.
What resources does the entrepreneur have to spare? Raising money is often a full time job. In a feasible scenario, an entrepreneur might meet 12 legitimate investors over three months, only to discover that all think the current business plan unworthy of funding. Meanwhile, the entrepreneur has been drawing no salary and paying office expenses. By calculating the cost of that time (and lost opportunities), one can determine the value of meeting 100 serious investors in one day.
“Although entrepreneurs certainly want investment, sometimes they realize that “no” from knowledgeable investors saves them time and puts them on the right track,” observes Mr. Emerson. “Corporations pay consultants for that all the time.”
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