Investors' Forums Gaining in Popularity
August 3, 2012
Mass High Tech
The following is the article in Mass High Tech as written by Jim Schakenback.
Despite whatever’s happening to the economy, there are always entrepreneurs looking for funding and investors looking to invest. According to data from the Angel Capital Association, angel investors pour $20 billion into start-ups annually, while venture capitalists contribute another $300 million. Much of this investing begins with investor forums - business communities organized to bring investors and entrepreneurs together to network, provide support, and make deals.
In New England, there are dozens of investor forums scattered throughout the six states. Most are in Massachusetts, and for good reason.
“We have the highest innovation density in the country,” Mark Solomon, a principal in Concord-based intellectual property law firm Hamilton, Brook, Smith & Reynolds PC, tells Mass High Tech, “which is why there is such a strength here in these groups.”
So what makes them so popular?
“Forums are a very good experience for entrepreneurs, even if they don’t get funding,” says Ken Merritt, chair of the Vermont Investors’ Forum, which is hosting its 20th annual investors’ event Nov. 7 on the campus of the University of Vermont in Burlington. “It’s a learning experience in how to put a presentation together, getting coaching, and connecting with other resources, not just funding.”
John Seiffer, president of the Angel Investor Forum of Connecticut, believes the rise in popularity of investor forums has much to do with the healthy profitability of the technology market, which creates a dynamic environment for both entrepreneurs and investors. “Some of the popular high tech companies have been sold for gazillions of dollars, such as Instagram,” says Seiffer, “and since the stock market hasn’t been doing that well recently people are looking for other ways to invest their money.”
“There are a number of advantages to investor forums,” says Deirdre Sanders, Principal in Hamilton Brook Smith Reynolds and chair of the WPI Venture Forum, Worcester, “including the educational aspect where people can learn from each other and make new connections and relationships as well as build an entrepreneurial community and be a part of it. The ability to share experiences and pains and stay aware of what’s going on is valuable.”
While investor forums are all about business, they can be fun, too. Take, for instance, the “Piranha Pond Pitch Party,” hosted by entrepreneurial networking organization 128 Innovation Capital Group of Waltham, where entrepreneurs get a chance to make a five-minute pitch to potential investors (something the WPI Venture Forum also does annually at its popular Five-Minute Pitch Contest every June).
Both the Five-Minute Pitch Contest and the Piranha Pond feature panels of investors who evaluate and critique presenters’ pitches, providing valuable insights and suggestions to help them improve their presentations and hopefully their chances of attracting funding.
“My goal is to make everybody successful,” says Annette Reynolds, executive director of 128 ICG. “The investors are looking for opportunities, the entrepreneurs want to get in front of the investors, and the audience appreciates the education.”
Other major investor forums include the MIT Enterprise Forum, which has 27 chapters worldwide and produces hundreds of networking and educational events annually, and the upcoming 7th Annual New England Venture Summit, Dec. 5 in the Hilton Boston/Dedham.