040 Think Big Radio: An Entrepreneur Chat with Kelly Pruneau, Women’s Capital Connection

In the investment field, women don’t have quite as big of a presence as men do.  In fact, only 10-15% of angel investors and venture capitalists are women.  But Women’s Capital Connection (WCC) based in Kansas City, Missouri is looking to change that statistic.  In this episode of Think Big Radio, Derek sits down with Kelly Pruneau, network manager of the Women’s Capital Connection to learn exactly what the WCC does, how it is changing the investment industry, and just how important women investors are in the Kansas City area.

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040 Think Big Radio: An Entrepreneur Chat with Kelly Pruneau, Women's Capital Connection

In this podcast, Derek asks Kelly questions such as:

1. How did you get involved in Women’s Capital Connection?
2. What types of companies or industries does WCC invest in?
3. What are some of the companies you currently invest in?
4. Why is there a need for something like Women’s Capital Connection in Kansas and Missouri?
5. Does Kansas City have enough investment recourses?  Why?  Why not?
6. How does WCC solve the “lack of capital” problem?
7. Why are there more men angel investors than women?
8. What is Women’s Capital Connection doing to increase the number of women angel investors?
9. Why do women make great angel investors and venture capitalists?
10. How do you Think Big?  

Listen to other podcast episodes!  Check out Think Big on iTunes.  

020 Think Big Radio: The 10 Questions Every Venture Capitalist Will Ask

Every entrepreneur is nervous to pitch to investors.  No matter what you do, your palms may sweat, your hands may shake and your voice may quiver while delivering your ever-important pitch.  And you should be nervous—you’re talking to the people who could potentially invest in your company!  But there is no need to look nervous when under the startup microscope.  Think Big is here to help.  In this episode of Think Big Radio, you’ll get insight into the top 10 questions that venture capitalists almost always ask during the question-and-answer session of a pitch.  Questions include:

1. Where did you get your idea?  If it’s so great, why hasn’t anyone else done it?
2. Are you funded?  Who, other than yourself, has invested money into your idea?
3. What is your monetization strategy?  In other words, how will you make money off of this idea?
4. How big is your market?  Are there enough people that want to spend money on your idea?
5. There are risks involved in any startup, but have you thought of yours?
6. Have you heard of ______?
7. How big is your team?  How much money are you spending to currently operate?
8. What is your exit strategy?
9. Tell me more about yourself.
10. What did you do before this idea came along?  What are your prior experiences?

So listen up, tune in and Think Big!  This is Think Big Radio, and we’re here to help you perfect the grueling investor question-and-answer session.

020 Think Big Radio: The 10 Questions Every Venture Capitalist Will Ask 

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8 Things to Take Away From iKC; How to Get Funded

Entrepreneurial growth has steadily been on the rise in recent years since the economy took a turn for the worse in 2008. But this surge in entrepreneurship means growth of businesses and more new jobs. Many startups have great ideas that aim to make our lives better. However, every entrepreneur faces a huge obstacle that can plague a business: funding. Some have it; many don’t. Even for those that do get funding face headaches and problems.

Plus, entrepreneurs have to ask themselves many questions in the funding sphere.  Do you go for crowdfunding or look for local investment? Do you try to find an angel investor or seek out a venture capital group? The questions are endless and the answers will vary depending on the business model. The following is valuable insight into the world of funding gathered during iKC panel, Geocashing Players from Pawns: Finding the Power Players to Invest in your Company. 

• Put your own skin in the game: Starting a business is a major risk.  By not investing your own money, you’re sending a message of doubt to potential funders. If you think, “Hey, I’m investing my time. That’s got to be worth something,” you’re still not investing enough. Your time is the measure of your effort. Your money is a measure of your passion.  As panelist Kelly Pruneau of Women's Capital Connection put it, “If you don’t put your own skin in the game, what makes you think I will?”
• Ask people you know: Friends & family—we all have them. When you have an idea that you’re passionate about and you know could be big, don’t be afraid to ask. Whether it’s a well-off uncle or a friend from college, the worst that could happen is that they say no. These people may also have wisdom in that field that will allow them to help in other ways
• Look to the crowd for answers: The great new trend for startups is to get crowdfunding. Sites like Kickstarter, Fundable and Gust all allow you to pitch your idea to millions of people who, in turn, can become potential investors. However, according to Rachel Qualls of Angel Capital Group, it’s important to “gather credible local investors first before looking to crowdfunding”. She also suggests, if possible, to accumulate 90% of your projected needed capital. This way, you’re dealing with people you know. You’re more likely to hear from the person who gave $5 rather than one who gave $5,000. She went on to say that due to the popularity of these sites, it is becoming increasingly harder to “rise above the noise”. Giving insight into the mind of potential angel investors that view funding portals, she says, “Don’t pay for extra listing fees that promise to increase visibility. Investors don’t care for it.  Instead, they look for what has already be raised and how quickly it can become liquid.”
• Know the rules before you get into the game: The recent popularity of crowdfunding has brought about the good folks of the Security Exchange Commission. On May 7th, 2012 they issued guidance to prospective crowdfunding intermediaries under the Jumpstart Our Business Startups (JOBS) Act (H.R. 3606). This measure was taken because the current crowdfunding space looks a lot like that of the stock market prior to the major crash in 1929. A full list of SEC guidelines for crowdfunding is available here.

Let’s say crowdfunding isn’t your cup of tea, mainly because you don’t like a bunch of random peoples’ hands in your tea.  That’s where angel Investors and venture capitalist firms come into play. Much like an elusive white-browed shortwing, these groups can easily be turned off by your actions so it is imperative to know how to deal with them.

• Know everything:  Investors understand that you are passionate about your business.  Don’t spend 14 minutes of your of 15-minute pitch only talking about how cool your business idea is. The investors aren’t really investing in the business. They’re in vesting in you. They want to know if you can do what you say you will. Have you done a reasonable financial forecast? Have you researched the market and potential competitors? What role do you expect from them? These are some of the questions that investors want to know the answer to.
•  Don’t just look for a check: You want to find a sophisticated investor, someone who has already had success. Nine times out of ten, their wisdom is more valuable than their money.
• Don’t be afraid to Think Big: There are many obstacles you may encounter along the way, but that shouldn’t get you down. When you have the opportunity to pitch to angel investors, be optimistic and fearless.

Getting funded is a major undertaking.  You may hear the word “no” 100 times but one “yes”. That “yes” is all it takes to make your idea a reality. Whether you ask friends and family, seek out angel investors, or look to crowdfunding, there is one thing that is universal: people invest in you.

Pitch Camp Grooms Midwest Startups for Think Big's Flyover Field Trip

Imagine receiving one-one-one pitch mentoring, collaborating with other entrepreneurs and participating mock question-and-answer sessions just 3 weeks before one of the most important moments in your entrepreneurial career: your pitch to investors.

Going through this process would probably make your pitch more clear, concise and compelling to those investors, wouldn't it?

That's why Think Big Partners held its first Pitch Camp this week; to prepare those Midwest startups selected to participate in the Flyover Field Trip for the scrutiny of Bay-area investors, the excruciating business plan questions and the nerves that many of them would face while pitching.

The Flyover Field Trip is a highly-intensive, multi-day pitchfest for entrepreneurs who live in the Midwest and want to get in front of investors from startup hubs such as Silicon Valley, Boston and New York.  At the end of March, those selected startups will join Think Big Partners and travel to Silicon Valley for the Silicon Valley Showcase and the Think Big Showcase in California, where they will have the chance to get in front of Bay-area investors to make their final pitch.

Pitch Camp, held this week at bizperc, prepped those entrepreneurs participating in Flyover Field Trip by incorporating a number of different coaching and mentoring sessions.  Because when you only have one shot to get in front of investors, you have to make it count.

Check out what the Flyover Field Trip entrepreneurs experienced this week at Think Big's Pitch Camp:


Day 1: The Deck

Entrepreneurs brought their "finished form" decks for review, discussion and refinement.  Think Big mentors made sure that all essential components were included in the deck and that the startups were presenting information in a clear and compelling manner.


Day 2: Turning the Deck into Presentation Knowledge

Entrepreneurs began the day by presenting segments of their pitch in group environments which helped them realize things about their presentations that they may not have realized before.  In this phase, startups underwent intense mock question-and-answer sessions and were evaluated on their ability to present information relative to their overall goal.


Day 3:  The Pitch

Practice makes perfect!  In this phase, each startup practiced their pitch over and over again until perfection.  Startups practiced their elevator pitches as well as their 7-8 minute presentations until they were clear, concise and compelling.

A few photos from Pitch Camp this week:

Startups were split up into groups to present their pitches.

A Pitch Camp group on the 6th floor of bizperc.

Willow of InvenQuery discusses her pitch strategy.

Herb Sih of Think Big Partners welcomes the Pitch Camp group.

Entrepreneurs' pitches were video taped to emulate a high-pressure experience.

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You Won't Believe Who's Looking For the Next Big Entrepreneur

One of basketball's legends is looking for an entrepreneur's next big idea. 

Professional basketball player.  All-Star MVP.  Sports commentator.  Author.  There are a lot of words that describe Charles Barkley, but a lot of people wouldn't expect "investor" to be one of them. 

TNT's Charles Barkley announced last week that he was launching Earn Chuck's Bucks, a contest designed to provide a business investment to anyone with a good idea.  Contestants can sign up by visiting CharlesBarkley.com.  By submitting their business plans, contestants will enter for the chance to win $25,000 cash from Barkley himself.  Registration runs through July 18th and the winner will be announced in September. 

So, entrepreneurs, we are asking you: are you ready to launch your next big idea? This might be your opportunity to do so.  Why not start today with Charles Barkley?  Good luck and Think Big!

Written by Allison Way.

@AllisonThinkBig

Yes, Dorothy, We ARE in Kansas and the Whole World is Flat!

Why this is GREAT for entrepreneurs, angels and the U.S. economy.  Our guest blog post from Scott Mize. 

As attendees prepare to gather tomorrow at the Kansas City Convention Center for the 2nd Annual Think Big Kansas City conference, my thoughts have turned to how the “flattening” of the world is impacting the entrepreneurial sector of our economy.  This is the flattening popularized in the book entitled “The World is Flat” by New York Time columnist Thomas Friedman.  The basic thesis of the book is that the internet and other information technology (e.g. new mobile devices) have created a level playing field for businesses worldwide. Increasingly, the historical hierarchies and barriers of geography, resources and markets are disappearing and becoming increasingly irrelevant.  Although the focus of the book was globalization and its cross-border impact, there are many ways in which this transformation can benefit places like Kansas City.  It also might be an important key to solving the problem of job creation in the U.S. and around the world.

We all know that the overwhelming proportion of new jobs come from small and medium-size high-growth companies.  They are the primary engine of economic growth and prosperity.  The Great Recession has dealt a serious blow to this job creation engine.  Although we technically came out of the Great Recession in 2009, the so-called recovery has been nearly jobless.  It is also showing every sign of going sideways at best for the foreseeable future.  To battle this inertia, it is essential that we focus on regaining serious job-creation momentum.

I have long felt that we really need to have more than one word for investing.  In much the same way that we could use more words for “love” in the English language (the Ancient Greeks had four!) we need at least two for “investing”.  One would refer to the type done on the stock market.  This is not IPOs or other offerings wherein an issuing company takes in the investment.  I mean the overwhelming majority of the transactions wherein investors buy and sell existing stock from each other in a global speculation casino.  This type of investing may create wealth for some investors, but is creates few jobs directly.  The other would refer to what angel investors and venture capitalists (VCs) do - buying stock from a private company itself and having that money applied to building the business, which creates jobs quickly, many of them very high-value jobs.  Diverting a relatively small percentage of the current investment in the stock, bond, commodity and/or foreign exchange markets into startup investments would have an extremely positive impact on job creation.

VC firms are often perceived as the key to funding early-stage companies.  The reality however is that the overwhelming majority of businesses will never get any VC money because they do not fit their target profile in one way or another.  I don’t have the room in this post to go into the reasons in detail, but Mark Suster of GRP Partners has written a couple of great posts about it here and here.  On top of that, the venture capital sector in the U.S. continues to shrink and has generally delivered lackluster returns.  Many observers believe that about half of the venture firms that have been active over the past few years will soon go out of business.  This makes increasing the level of angel investment more critical than ever.

Angel investors have always been important to fueling start-up companies.  Over the past decade, there has been strong growth in angel investing (despite a pullback during the Great Recession), and broad proliferation of angel investment groups.  According to the Angel Capital Association (ACA), the number of angel groups has tripled since 1999.  According to the Center for Venture Research at the University of New Hampshire, in 2010 in the U.S., 265,400 angels invested $20.1 billion in 61,900 companies creating 370,000 new jobs.  This puts angels at rough parity with VCs, who according the National Venture Capital Association invested $23.3 billion in 2010.  There are now angel groups in virtually every city in the U.S.  The ACA has over 150 angel groups as members from 49 states and 6 Canadian provinces.  Although data is harder to come by outside the U.S., there are many indicators that there is good growth in angel investing around the world.

In order have the greatest success at creating new jobs, ensuring economic prosperity and solving the major challenges facing humanity, we need more angel investing.  The good news is that there are two key factors that poise us for a boom in angel investing.  First, the ACA estimates that the potential number of angel investors (defined as those with over $1 million in net worth) is approximately 4 million.  Second, in much the same way that the global competitive environment is flattening due to advances in information technology, so is the start-up funding environment.

There is a huge opportunity to make angel investors of a good chunk of the 4 million high net worth individuals that are currently sitting on the sidelines.  The ACA and Angel Capital Education Foundation have made a great contribution by creating a professional association for angels, which among other many other things compiles and disseminates best practices for the field.  Both are spinoffs of The Kauffman Foundation and are based in Kansas City.  The proliferation of angel groups makes it easier for high net worth individuals that are new to the game to find a community in which they can get up the learning curve and plug into deal flow.

Software-as-a-Service (SaaS) applications like AngelSoft make it easier for angel groups to aggregate deal flow and syndicate deals.  This is good for both entrepreneurs and investors – taking down traditional barriers and limits and thus flattening the investment process.  The ability to aggregate deal flow from multiple sources dramatically increases the number of deals to which an angel investor has access.  Workflow management capabilities enable angels to more easily collaborate and use their collective intelligence in sourcing deals, performing due diligence, and overseeing their investments.  The angels thus have unprecedented access to more and better start-up investment opportunities.  This type of application is also good for entrepreneurs because they have access to a much wider range of potential investors than ever before, and therefore unprecedented access to investment capital.

It is the common wisdom in many quarters that globalization and the “flattening” of the world spells doom for the U.S.  To the contrary, by using these same forces creatively we can stay in a leadership position.  Activating the sleeping potential of angel investors and embracing these new technologies can produce exciting entrepreneurial successes, powerful new product and services, robust job creation and a myriad of ways to address the pressing challenges facing humanity.

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Written by Scott Mize.  Scott is a Silicon Valley Venture Development Executive and is the moderator of the Think Big Kansas City panel on “Lessons Learned from Kansas City Entrepreneurs You May Not Have Heard Of”.  He can be reached at ayesem@earthlink.net.