The CEO of fast-growing business software company InMotionNow estimates that over the past two weeks his team has collectively devoted at least 50 hours to the six-minute presentation he’ll deliver Wednesday morning at the Raleigh Convention Center.
“We see this as a fantastic opportunity,” said CEO Ben Hartmere. “We’re giving it all the attention I think it warrants.” The goal, he added, is “to make 6 minutes seem like 60 seconds.”
InMotionNow is one of 20 North Carolina information technology companies – mostly from the Triangle – looking to raise venture capital funding that are scheduled to make brief-but-crucial presentations at this year’s Tech Venture Conference sponsored by CED, a Triangle-based support group for entrepreneurs. At least 600 people, including more than 100 individuals representing 60 venture capital firms and other institutional investors, are expected to attend the two-day event at the Raleigh convention center.
This year’s conference is being held at a time when Triangle companies are finding venture capital especially hard to come by. The $22 million in venture capital raised by local companies in the second quarter marked the second consecutive disappointing quarter and was the region’s worst showing in two years.
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Venture capital funding is the lifeblood for many startup and early-stage information technology and biotechnology companies, which rely on venture capital dollars to develop products or expand. In exchange for their cash, the venture capital companies receive an ownership stake in the business.
Triangle entrepreneurs have long complained there aren’t enough venture capital firms based in the Triangle that are actively making investments in new businesses. That’s important because venture capitalists prefer to invest close to home because it makes it easier to track their investments and attend board of directors meetings.
The annual CED conference plays an important role because it attracts venture capitalists from elsewhere.
“This is a great way for the entrepreneurs to get to see not only the local (venture capitalists) but also the regional folks,” said David Jones, a partner in two Triangle venture capital firms, Bull City Venture Partners and Southern Capitol Ventures.
Thad Tarkington, co-founder and CEO of FilterEasy, said the gathering of so many investors in one place made the CED conference a perfect place to kick off the company’s effort to raise $5 million in venture capital.
“It will be good to get it jump-started out of the gate and get some conversations going,” said Tarkington, who also will be making a six-minute presentation at the conference. Raleigh-based FilterEasy offers an online subscription service that regularly sends air filters for heating and air-conditioning systems to your door. The company, which launched its website in May 2013, has seven full-time employees and projects that revenue will exceed $1 million this year.
Joan Siefert Rose, CED’s president, said that at least 10 out-of-town investment firms that have never attended a CED conference before have signed up for this year’s event. She calls that “a leading indicator” that shows investors are eager to find Triangle companies worth investing in.
“I’m quite encouraged this year,” she said.
Rose also said that although venture capital remains important to early-stage companies, Triangle companies increasingly are obtaining funding from other sources.
That includes corporate investments, angel investments and “family offices” – that is, groups of wealthy individuals that hire an investment professional to guide their investments.
“It’s a new set of players,” she said.
Although Rose declined to provide details, she said CED’s latest data, which it plans to unveil Tuesday, show that total funding from all sources raised by North Carolina’s entrepreneurial technology companies was up in the first half of 2014 compared to a year ago.
Rose also is upbeat that the Triangle’s entrepreneurial companies have unveiled deals this year that can’t help but impress outside investors. She cited the $1.1 billion acquisition of Furiex Pharmaceuticals and Aerial Biopharma’s sale of the rights to an experimental drug for $125 million upfront plus up to $272 million in milestone payments.
“Nothing succeeds like success,” she said. “The more we have successful companies, the more interest we’re going to attract.”
The Triangle, she added, has always had a reputation for “very efficient use of capital.” That means very profitable returns for outside investors.
In addition to the 20 businesses making presentations at the conference, an additional 60-plus information technology companies will be demonstrating their products. They’ll be networking with investors as well.
InMotionNow CEO Hartmere began his search for “at least $2 million” in venture capital funding about a month ago.
Revenue at the Morrisville company, which has 27 employees, jumped 306 percent for the 12 months that ended in June. The company’s cloud-based workflow automation software is used by creative and marketing departments at companies such as Disney, Lowe’s and Random House.
Given InMotionNow’s track record, Hartmere is confident he can achieve his fund-raising goal.
“Based on what I’ve seen so far, there are folks looking to make smart investments,” he said. “I think we fit within that category.”
That said, he’s pleased that he’s seeking what is, in the venture capital world, a relatively modest sum.
“If you went out and tried to get $10 million, I think it would be a bit of a challenge here in the Triangle,” Hartmere said.