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Money: VentureNet, Southern California’s Shark Tank

October 12, 2009

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COSTA MESA, CA (RPRN) 10/12/09 — Southern California’s top venture capital conference brings together start-up companies with angel investors, venture capitalists and private equity firms

By Robin Rowe

 – In a live event similar in concept to the ABC TV reality series Shark Tank, VentureNet invites Southern California’s most promising companies and entrepreneurs to meet with investors, strategic partners and business leaders from around the country. VentureNet’s been doing it annually for ten years. The one-day conference, held on October 7th, offered a peek into the future of Southern California technology companies.

“Everyone feels the effect of the economy,” says Bessemer Venture Partners VP James Cham. “Nobody likes to see so much wealth destruction. On the other hand, the companies we’re looking at see change in the economy and find opportunity. I’m impressed with how clever people have been to find ways to work in this new environment.” Cham is one of eight venture capitalists taking pitches from southern California companies at VentureNet.

Bessemer Venture Partners is a 100-year-old venture capital firm that invests broadly in technology companies, putting in $100,000 to $25 million. At the smaller end of the scale of VentureNet investors are angel investment groups such as Tech Coast Angels. TCA deals are in the range of $100k to $500k, sometimes pushing $1M.

“I’ve gone to VentureNet for four or five years and have been involved in selecting companies for the last couple years,” says Tech Coast Angels L.A. Network president Al Schneider, who’s also the vice-chair of the Pasadena Angels. “It”s a tremendous venue both for the companies presenting and for the investors ranking companies here in Southern California. It’s a great cross-section of opportunities out there now.”

Tech Coast Angels is the oldest, largest and most active investor network in Southern California, with more than 260 investor members. According to Schneider, TCA has funded $104 million in investments in the twelve years since it was founded. It’s also attracted over a $1 billion in follow-on funding. With participation from other investors, a round may reach up to $2M. TCA anticipates funding twenty companies this year. Somewhere in the middle range of VentureNet investors is Rincon Venture Partners.

“Rincon was founded to serve what we saw as an underserved and increasing underserved part of the software landscape,” says Rincon Venture Partners general partner Jim Andelman. “That’s software and web-based businesses that don’t need a lot of capital to launch and build meaningful scale. We’re designed to do smaller capital deployments than traditional VC firms. Our initial bite size is usually around a million dollars and we reserve a significant amount to fund our companies going forward.”

“For our area of focus, early stage software and web-based businesses in Southern California, there’s not a better investment conference,” says Andelman who sits on the selection committee that chooses which start-up companies will be presenters. “One trend you see across these companies is monitizing activities that are not monetized today or are under monetized.”

“I think the days of ‘get lots of eyeballs to your website and figure out the revenue model later’ are pretty much gone,” says Technology Council of Southern California president Rick Sharga. “Look for applications that engage the user, whether mobile apps or online games, that have a revenue stream attached from day one. The exception to that is social media where we’re seeing such massive uptake in the number of consumers.” The Technology Council of Southern California (TCOSC) is the organizer of VentureNet.

Sharga is also a senior VP of RealtyTrac in Irvine. RealtyTrac publishes the nation’s largest database of foreclosures and bank-owned properties. Talk about a recession-proof business… “We’re very busy,” says Sharga. “We have a website that gets about three million visitors a month.”

TCOSC has a board of entrepreneurs with experience raising capital who know what works. “What I think is very important at VentureNet is being able to communicate concisely what the value is of your business, how you’re creating value for your customers, and what the long term return on investment is for people who invest,” says TOSC director Jon Kraft. “Some presenters make the mistake of getting enthralled with their technology and the innovation behind their business.”

Kraft is a co-founder and COO of Big Stage Entertainment. Big Stage was admitted on October 5th to the Forbes’ List of America’s Twenty Most Promising Companies. Big Stage has raised $1M so far. Its lead investor is San Diego-based Mission Ventures. “We think we’re going to do some special things in the area of custom avatars and personalized projection of self into game content and other media content,” says Kraft. “We spun our technology out of USC. We allow any consumer with any digital camera to create a 3D model of their face.”

VentureNet is the largest capital conference for technology in Southern California. It attracts companies from Santa Barbara to San Diego. VentureNet offers networking throughout the day and presents exhibitors, but the core of the VentureNet event is the ten presenting companies from Southern California. The core audience is entrepreneurs who are looking for how others are communicating about their businesses, what others are doing, what’s hot in the market, what investors are interested in.

“Different companies present every year,” says Kraft. “Every year is special. You never know when you’re going to get the next PayPal, or the next Google or the next Facebook at one of these events.”

http://www.venturenet.org/

http://www.tcosc.org/

http://www.bvp.com/

http://www.techcoastangels.com/

http://www.rinconvp.com/

http://www.realtytrac.com/

http://www.bigstage.biz/

http://www.forbes.com/entrepreneurs/promising-companies/

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