Young CEOs Sharpen Funds Pitch Before Venture Forum
Bassil Dahiyat is trying to pitch his Pasadena biotech company like a polished salesman, but the 28-year-old PhD isn’t quite there.
“Slow down,” said one of the 10 venture capitalists who gathered last week to critique Dahiyat’s presentation at a “financial boot camp” for chief executives, held in preparation for the Southern California Technology Venture Forum on April 22.
“Maybe I don’t have enough brain cells to understand what your protein models do. . . . It’s important to let us know where your dollars come from,” said Eric Hardgrave of Acuity Ventures, based in the Bay Area.
“I don’t quite understand the business model,” said another potential investor.
“What makes you outstanding as a development-stage company?” asked Jim Cole, partner at Windward Ventures, based in Westlake Village and San Diego. “You didn’t talk about competition at all.”
Wednesday’s all-day event included presentations from 11 Southern California companies, including Xencore, the firm Dahiyat founded in 1997.
All considered, Dahiyat’s biotech presentation was strong, the VCs agreed, noting however that he has a tough sell as investors increasingly gravitate toward Internet firms.
“Given where the biotech sector is right now, part of your job is to convince everyone that there is a lot of excitement here,” said Tom Clancy, general partner at one of Southern California’s venture firms, Enterprise Partners.
For his part, Dahiyat said he learned from the criticism, adding that the feedback will make his job easier when he makes his pitch for real, in front of hundreds of investors at the forum.
“I was a little flustered,” Dahiyat said. “I got stuck on the freeway in the rain, and by the time I got here all my prepared comments just went out the window.”
The fifth annual forum will be held at the downtown Los Angeles Marriott hotel. Entrepreneurs from all 21 participating start-ups were slated to practice their pitches at two dress rehearsals last week.
“This is the best crop of companies I’ve ever seen here,” said Jon P. Goodman, director of the EC2 Incubator Project at USC, a program designed to promote entrepreneurship. “The sophistication of these companies, the stage of development and the level of investors--well, it says a lot about what’s happening in our Southern California economy. It shows what’s been happening under the surface in the past few years.”
Sponsored by the Los Angeles County Development Corp. and the Los Angeles Regional Technology Alliance, the forums have helped raise more than $60 million for companies.
In past years, participants have included EToys Inc., the Santa Monica firm that sells toys over the Internet and could go public as soon as this week.
“Not only did it sharpen my business pitch, but it helped strengthen my connection to the venture capital community,” said Toby Lenk, chief executive of EToys, who honed his spiel last year.
One company that generated excitement Wednesday among the venture capitalists is Cooking.com of Santa Monica, which sells cookware and offers recipes over the Web. Although the firm raised $15 million in venture funds last week, the CEO decided that more practice could only help the firm in the future.
“Cookware shopping is a chore!” Chief Executive and founder David Hodess, 37, told the VCs, stressing the convenience of online shopping. The $16-billion-a-year cookware business exceeds the market for retail music sales, he noted.
Founded in 1998, Cooking.com has 35 employees, including several, like Hodess, from Walt Disney Co.
Though impressed, the venture capitalists had some advice.
“There are a lot of sites that do what you do. How is yours different?” wondered David Cremin, a partner with Los Angeles-based Zone Ventures.
“When you say things like, ‘Our goal is to be this,’ or, ‘We expect 1999 to be. . . .’--instead make those positive statements, like, ‘We are this,’ or, ‘1999 will be. . . .’ ” said Ken Deemer of Tech Coast Angels, an Orange County venture group.
Another presenter, Bridget Karlin, president and founder of Thinkque Systems in North Hollywood, told venture capitalists that the sales-force automation firm, whose software links sales teams with manufacturers and customers, is already attracting such big clients as Taco Bell and Nestle.
The capitalists liked her crispness and simple-yet-detailed business plan.
“I wouldn’t change a thing,” said Cole of Windward Ventures.
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Debora Vrana covers investment banking and the securities industry for The Times. She can be reached by e-mail at debora.vrana@latimes.com.
