To gain a deeper understanding of exactly how the venture-forum process works, we interviewed two entrepreneurs on opposite ends of the spectrum. One is in the early stages of presenting to investors and the other has two appearances under his belt and high hopes for a third. Both firms are clients of Venture Point Tech Coast Small Business Development Center, the only SBDC in the United States that specifically targets companies operating in the high-tech/high-growth sector.
Irvine, California-based Venture Point has created a review process that emulates the venture forum--but with some key exceptions. Instead of seeking capital from the investors who volunteer to sit on the panels, entrepreneurs seeking help with their business plans obtain feedback and advice on how to sharpen their presentations and businesses. This help is provided through intensive one-on-one consultations and small-group critique sessions.
One current Venture Point participant is entrepreneur Richard Castellanos, who has yet to enter a venture forum. That's because he's been going through the extensive grooming process at Venture Point since November 1999. "I wanted an unbiased group to validate our opinion on [our product]," says the 38-year-old founder and president of The Flying Beverage Company, a Cypress, California, business that produces airline catering and galley equipment. "I also wanted them to help groom us to go before investors. I expected them to help review our business plan, to help ensure we had a good presentation plan and, most important, to help us develop a strategy to locate investors."
What was Venture Point's objective analysis of Castellanos' attempt? "It was obvious from his business plan that [Castellano] had spent a considerable effort trying to understand the market and the competition," says Karen Z. Gifford, director of consulting services at Venture Point. "But while he had done a lot of work, there were still some gaping holes."
In an effort to move Castellano to the next level, Gifford and her consultants pointed out the strong and weak spots and then created a timetable for dealing with them and meeting again with the Venture Point staff.
The evaluation process certainly opened up Castellanos' eyes. Like most entrepreneurs, his primary inclination had been to focus all his energies on finding the financial resources to fuel his dream. Consequently, he became frustrated and impatient when the consultants raised some unexpected questions, like "What do you and your team want out of the business?"
But that's the point. According to Gifford, helping entrepreneurs understand how such ancillary issues will affect their search for funding and the development of their business is what Venture Point's consulting is all about.