Anthony Hayward, 44, and Shoba Purushothamaman, 41
New York City
Sales: $2 million
Founded in April 2000, The Newsmarket Inc. is a news video archive company that digitally transmits data to TV outlets. After investing all their savings to get the company off the ground, Anthony Hayward and Shoba Purushothamaman sought $3 million in first-round venture capital in 2002 to increase their distribution capability. To achieve the company's financial goal, Purushothamaman got an "in" with some investors at the Springboard Venture Capital Forum, a competitive, bootcamp-style program that brings women entrepreneurs together with venture capitalists.
Describe the process of finding funding through the Springboard Venture Capital Forum.
Shoba Purushothamaman: They selected 23 finalists from the 240 that applied. Once you've been [chosen] as a finalist, you're trained for about six weeks. You're assigned a VC coach who trains you to deliver your pitch. You go up on stage [on] the big day, then the VCs interested in your business follow up with you, or you go out proactively to people you've identified in the audience as your targets and engage in conversations. There were 12 to 15 VCs [I met at the forum that] I really focused on; I did a lot of research and e-mailed and called those individuals persistently. The investors that funded us were the ones I called half a dozen times before I got anywhere with them.
What do you think made the difference for you? What sealed the deal?
Purushothamaman: I would say there were five factors that played a role. One was that the amount of money required in this business was not huge; we were looking to raise $2 million. I think the investors were attracted to that. It was not a business that was going to require millions upon millions to build. We had a very strong revenue model--a subscription-based model with recurring revenue. And [it was a] business that had low capital expenditures and fixed costs.
The other very clear thing was there was a lot of value placed on domain experience. This is the second business [for my co-founder and I]. We had built another company over a 12-year period and had successfully sold it. So people felt comfortable that we had some of the key experiences needed. And there wasn't a whole lot to fund out there in terms of companies that had revenues going for them.
What advice do you have for other entrepreneurs trying to get capital in a tough market?
Purushothamaman: I really think it's sticking with it. You've just got to keep trying, and never give up. --N.L.T.