Jim Coonan of Venture Catalyst, Caroline Cummingsof Palo Alto Software and Robert Wiltbank of Montlake Capital comprise the investor panel for today’s Southern Oregon Angel Investor Conference at Bigham Knoll in Jacksonville.
“What’s your traction,” is a key component of understanding start-ups, Cummings says. “Invest in people first and ideas second.”
Wiltbank says he works backwords from the end result to the starting point.
Coonan says revenue is always good at the beginning.
“What I really want to see demonstrated is the customer willing to pay for the product at the designated price? I want to get to that answer as soon as possible,” Coonan says.
“Go make that first dollar, get some revenue,” Cummings says.
“The metrics I look at a lot are “dollars per yes” they’re hard to get,” Wiltbank says. If you have to spend $10,000 to close a $5,000 deal, that’s not good.
Current customer base is best form of advertising in the early stages of sales, Cummings says.
JettStream wasn’t asking too much, but creating a product to solve a problem, Wiltbank and Cummings says.
“What I’d like to see more of is the recurring revenue,” Cummings says.
How are large providers going to be influenced to buy thousands and thousands of units, Wiltbank says.
As to PopDek, Coonan says, it’s an alternative to a real problem, whether your are a do-it-yourselfer or contractor.
“It still has execution risks,” Coonan says. “It’s more costly, but the overall cost is less.”
Cummings wants to know if there is a letter of intent and more information concerning the relationship to Parr Lumber.
“If we invest and the company takes off, how do we keep the other competitors in the market at bay?” wonders Wiltbank. “There is a control issue. Can you keep Parr long term?”
The Digits presented to scope of the problem they are solving, Wiltbank says. “Show the massive whole and what you are doing to fill it. If there is a way to add instructions, step by step, it would make it easier to sign up for that on investment side.”
Digits does have revenue, didn’t get that at first. There’s a 5 percent conversion on Kindle, that’s a huge rate,” Cummings says. “I would definitely like to see more on the marketing side.”
People invest in people and make decisions on relationships and that’s what makes for successful business, Coonan says.
“I still didn’t understand the pricing? How do you make a buck on $10 a year?” he asks.
You need advisers, you don’t want to take dumb money, you want money that comes with expertise, Cummings says.
The Farming Fish needs more on financials and presentation.
“You do have revenue, how are you scaling that,” Cummings asks.”Share your story on your website.”
What is different from what you do than others, including Asian fish farms, Coonan asks. “What are you bringing to the party that gives you an advantage over the other companies, other than first to market?”
Wiltbank wants to know what it takes to land a big distribution deal. “As you get into retail, they’re willing to go down on price premiums, but have to know if it will hit the small bulls-eye.”
Cummings wants to know how will revenue grow with each new greenhouse?
Concerning Watch Technologies.
“There are a lot of people thinking it’s a good place to put money, but the devil is in the details,” Wiltbank says.
“I’ve seen companies get money and they can’t spend it fast enough,” Cummings said. “I want to see the irrigation gates look more sexy. You’ve got the traction and revenue.”
One area I saw is there unfair advatnage you have, Coonan said. “Here’s the old technology and here’s our technology.”
Angel Investors have gotten tired of waiting for years, factoring might be an answer.
If you have traction, lead with it, Wiltbank said.