Colorado Company Looks at Raising Capital in Silicon Valley and CO

Back in the 'dotcom' era, Matt McAdams raised raised capital. Today, Matt is Founder and CTO of TrackVia and pointed out that in 1999 it was a great deal easier to raise venture capital then it is today. TrackVia is a client of Mark Weakley, Partner at Holme Roberts & Owen, Boulder. Mark and Matt discussed some very important 'do's' and 'don'ts' about raising capital in the Silicon Valley vs. Colorado. Here are a few questions that were covered. How did you go about getting meetings with VC firms? Is it effective just to submit a business plan through the firm’s website, or did it require personal introductions and/or more creative routes of reaching the firm? Does it matter whether you’re meeting with an associate at the firm, or with one of the partners? In other words, should you push to have a partner attend your meeting? What was your experience like in Silicon Valley, as a Colorado-based company? Do you think it’s more effective to identify a list of just a few VC firms that look like a great fit, and really work on those firms, or is it better to cast a very wide net and take every meeting you can get? Matt feels strongly about management teams, personal introductions, persistence and improving what you are selling. VCs currently want to see real business traction from startups, in the form of product users/customers. Listen to Matt's discussion and you will hear some very practical, pragmatic thoughts from an entrepreneur who has raised money recently, as well as back in the dotcom boom days.
Related Links: TrackVia || PodCast Directory || It's the Law Channel || Holme Roberts & Owen ||   > Bytes: 15767715 > LISTEN 9/2/08

Comments

[Dan D. Gutierrez]

By Dan D. Gutierrez
CEO of HostedDatabase.com

I would tend to disagree with Matt that in 1999 it was easier to raise venture capital than it is today. Funding depended to a great degree on your technology. My firm launched the web's first Database-as-a-Service offering in 1999, before Trackvia, before Quickbase, before all other competitors around today. We went for VC funding during that time, but it was a bad climate for something as mundane as a database in the cloud.

At that time, VCs were looking for something sexy. It was true that money was flowing but the project had to be something that was on the hot list passed around by VCs at the time: iVillage, DrKoop.com and the like; all of which went bust because they had no hope of making money. When we showed our subscription-based service to VCs, we got question marks. "Why would anyone want to place their data on the web?" Subscriptions? The VCs couldn't comprehend why anyone would pay for services on the web.

Remember this was a time when everything on the web was free and business models consisted soley of getting "eyeballs" to create market awareness. Banner ads were the sole source of income for many of these companies. So companies would get VC funding and then soon shrink out of existence when the money ran out and there was no revenue to keep operations going. We knew at the time that any viable company needed revenue so we stuck by our subscription revenue model. VCs wouldn't listen.

Fast forward nearly 10 years, and HostedDatabase.com is going strong. We're still self funded and we feel fortunate.