Name: Matt Pernichele

Title: Venture Consultant

Matt Pernichele brings a wealth of personal entrepreneurial experience to the FundingUniverse consulting department. He helps clients prepare for and approach investors for capital and works to refine many different aspects of their businesses in the very important foundational stages (pre-funding)

Matt is our longest-employed consultant and is usually talked about in glowing terms by the entrepreneurs he consults with.

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What’s the biggest mistake you’ve ever made in business? I was given a “management” position and equity share equal to that of the founders in a software startup. I agreed because I really liked the product and the market. With each principal having an equal share and no other arrangements, no one was in charge and no one was accountable. Ever. I recognized this from day one but stuck with it for two years while the company spun its wheels in the hope that I could get my partners to impose some organization on the business or that it would, magically, succeed without it. Needless to say, it did not.

What’s the best business advice you’ve ever received? After the above example, I was told by a friend about the idea of “fast fail” that is, when you enter an endeavor make sure you will be able to tell pretty quickly if it will be a failure or a success so you don’t waste too much time on it.

Where did you work before FundingUniverse? Most recently I was doing some accounting work for Consonus.

What drew you to FundingUniverse? I found the idea of working with startup entrepreneurs exciting. It’s a great job where I learn useful new things every day and meet a lot of committed, creative people.

How will you help FundingUniverse grow? Hopefully by getting people in a position where their plans can get funded and by directing investors to real, quality deals I will help FundingUniverse become the place where good deals can get good exposure.

What’s your favorite things about FundingUniverse? Learning about my clients businesses.

What do you do when you’re not working?
Hike and take care of my high maintenance children.

How has FundingUniverse helped you grow professionally? Working at FundingUniverse has exposed me to a lot of different business models and personalities that I would not have otherwise encountered. I have also learned a great deal about my clients industries; from aircraft manufacture to SaaS to men’s hair care products.

First, talk about the Economy….Let’s call it a ‘fortune of reversals’

First it was housing, banking, and insurance. Now, retail and automotive. Not a good time to have big stores, big shelves and lots of goods from manufacturers who want to get paid. With the credit crunch, big ticket item sales are near impossible, everyone clobbered but the category leaders… i.e. Circuit City and Linens ‘n Things have been slammed. If smart, Walmart, Target and Costco will find ways to get by. Next, it’s clogging auto dealers who sit with big inventories. No one’s buying a car that doesn’t need one right away. I hear 2009 autos are sitting in the ports waiting for 2008 autos on the lots to clear out. Not going to happen this year. And it’s no solution to throw money at them, the big-3 need to change big-time. They need some kind of structured re-organization. If we as citizens must invest in them to keep the entire Midwest economy from crashing, the big-3 must find a way to make better cars, have fewer dealers, and dump their legacy obligations. Sorry, I think big unions (more mouths to feed), big stores and big inventories should be jettisoned. And I say, down with expensive marketing plans, good products should sell themselves!

My travels

This week, I hit Flagstaff (think Grand Canyon) and Tempe (mainstreet for ASU). First, we dedicated the new Northern Arizona Center for Emerging Technologies and AZ Governor Janet Napolitano cut the ribbon of this new 10,000 square foot incubator, which by the way, is already filled with ten awesome technology companies (more about these companies next time). Later that day, the new Northern Arizona Angels group met at the ultra beautiful Pine Canyon Golf Club. Investor presentations were made by Protein Genomics (they make skin), Norchem Drug Testing (like they say, drug testing), Density Investments (new age green building), Ambature (super conductor material) and Visible Energy (making sense of energy).

Spressions

“Be careful what you wish for”… remember when we longed to get rid of our biggest problems: high gas prices and the Iraq war? Don’t you wish we were back there now?

Accordion to me…This week’s advice to entrepreneurs

Looking to fund your company? Wherever you are, there are probably angel investor groups in your region. While November and December may be shot, if you have a killer company, you should apply to the angel group(s) in your area and then, others nearby too. [ look at their directory at http://www.angelcapitalassociation.org/ ] Get some professional advice, know your domain, make sure your company can exploit its unfair competitive advantage, and know your true valuation boundaries. Concentrate on proving the details on how your sales will be brought in. Very few companies know enough how they will get their sales. And…don’t talk about fast exits or IPO’s. Of course you are open to the right liquidity event, but right now, no one knows when, how and where. Ah, but you must be ready and wise. Got an idea or something you need help on? rick@hotventures.com

The tables could barely hold the number of investors that attended our Speed Pitch event on November 4th in Salt Lake City. Traditionally we have 10 tables with about 2-3 investors per table, but at this event we had at least four per table and some had more than that.  We truely had investors spilling into the aisles!

The flood of investors attending was telling for two reasons.  1.  We are in a downturn economy which typically means that investors are more tight fisted with their resources.  To have so many of them at our event was intriguing and 2.  The strength of investor turnout is a tribute to FundingUniverse and their ability to bring quality and certified companies to the table.  It takes a Hurclean effort to put these events together but the results for both the Investor and the Entreprenuer are immeasurable.

I am excited to report that EVERY company that pitched was offered invitations for follow up meetings, were given referrals to other investors or in most cases were given both.  Shortly after the event, we asked all entreprenuers to share some of their thoughts on the event.  Here are just a few of the we received.

Fantastic!  Great experience, great opportunity.
- Jason Izatt, CEO, Izatt International

Do what you can to get into this event.
- Shane Willard, CampusBook

Pony up the [dough] and attend.
- Alan Martin, CEO, CampusBook

It really helps to hone the pitch.
- C. Lunceford, Miralinx

Must do. If not for the money then for the experience
- Cary Snowden, CEO, ListPipe

Our next speed pitching event will be on December 12th and we are excited to end this incredible year on a high note.  If you are interested in learning more about how your company can present at one of our events or if you are an investor looking for qualified, certified deals contact one of our representatives at 877-638-3616 option 1 to learn how you can attend our next event.

Joel Nielsen is a Venture Consultant at FundingUniverse.  He can be reached at jnielsen@fundinguniverse.com

Hey everyone, here’s the maiden launch of my blog for FundingUniverse. This is my chance to rant and rave on the subject of Angel Investing: Trends, Deals, Happenings, Phenomena and Kooky Stories.

Where am I coming from?
You can check out my Web site at but please allow me to get this background stuff out of the way. I’ve put in 34 years of hard labor in start-ups, turnarounds and fast-growth technology companies. I work mostly with IT and BioSciences companies, investing in them, helping them find money and sometimes as a board member or advisor. I’m on the board of several angel groups, technology incubators and have advised almost 100 companies, and have co-founded several successful tech companies, and I am most proud of Knowledge Adventure, which we sold for $100 million in 1996. Soon after I was an early shareholder in Bill Gross’ Idealab, which quickly became the most famous tech incubator in the world, and recently has morphed into one of the most notable tech operating companies in the U.S. Idealab created Overture.com and sold it to Yahoo for $1.6 billion, and now runs a few dozen companies, among them the hottest solar company, eSolar, new automotive company, Aptera Motors, and robotics company, Evolution Robotics.

What me worry?
Okay, I won’t dodge the question. Worried? Well, just a little. How’s this economic disruption affecting angel investing and entrepreneurial companies? Well things are going to be more difficult… plenty. Right away, any borderline investor deals are probably going to get killed, and the deals that do get done will be at terms a lot more investor favorable. However, for those companies that have an oh-my-gosh, true competitive advantage in a large market that’s screaming for a solution, don’t worry, you’re still good. While many angels have pulled back or are waiting, there still are investors who need to keep their capital employed. I mean, even if billions of dollars of capital has been withdrawn, there still are tens of billions remaining that must be employed, right? In any event, I suggest you make plans to keep yourself busy now though mid-January, cause once we hit Thanksgiving, deal closings will be few and far between.

I like “Recession-Resistant”
There is no recession-proof. But no matter whether you’re entrepreneuring or investing, make sure your company does something truly important. No…wait, you better make sure it provides something that’s absolutely essential to the buying public. If it isn’t, go find a way. The next year or two may not be your best years, but they can be years that you survive and build. I call that recession-resistant, but you may want to look for satisfaction in simply getting by.

Question: What’s a word for high gas prices and the war in Iraq? Answer: Nostalgia
What I’m saying is if you look back six months, it looked like high gas prices and the war in Iraq were making our lives unbearable. Now… I betcha you wish those were still our big problems!

Name: Frank Poulsen

Title: Venture Consulting Manager, Investor Liason, Distance employee and king of diatribe.

Frank’s the grand poobah over the venture consulting arm of FundingUniverse. He makes sure our consulting is producing results for clients. He’s also the guy responsible for maintaining good relations with our investor network by catering to their every whim.

Frank currently lives in Idaho and works remotely. When we’re lucky, he occasionally graces the FundingUniverse headquarters in Utah with his presence.

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What’s the biggest mistake you’ve ever made in business? I think the biggest mistake was taking the second job that I did, no offense to anyone in the car industry, but I have never worked in such a crooked and upside down business in my life. Thank goodness I got out of that.

What’s the best business advice you’ve ever received? “He who knows not and knows not that he knows not is a fool, shun him. He who knows not and knows that he knows not is a wise man, follow him”

Where did you work before FundingUniverse? I worked as a business analyst with an auto group in Southeast Idaho, previous to that I worked with a joint venture between a Venture Capital firm and a regional entrepreneurial center as an analyst and consultant.

What drew you to FundingUniverse? The excitement of working in the Private Equity industry, i have always been fascinated by it.

How will you help FundingUniverse grow? By ensuring quality consulting and new approaches to our work, this will help to increase our sell-ability as the word get’s out that we are truly the best in the industry.

What’s your favorite things about FundingUniverse? Of course the people. We have a great team of young accomplished professionals that work hard and play hard.

What has been the funniest moment at FundingUniverse? Well I would have to say that Michael Jones is a terminally funny moment, get to know him, you will see.

What has been the weirdest moment at FundingUniverse? I don’t think we should talk about that publicly.

 

This morning started with a great visit to a local Angel Group’s monthly meeting.  I always enjoy seeing companies pitch to investors and am especially intent on observing nuance, which tells so much about what the investors are looking for.  I would like to share some of those observations today that may help entrepreneurs gain a more intricate insight into preparation for a fundraising pitch.

Observations:

1.  Without fail the first question after every pitch was calculated to determine the details of the offering. i.e. pre-money valuation, percentage of ownership offered, preferred or common stock, liquidation preferences etc.  I will let you draw your own conclusions but I think this means it is important to the investors.

2.  The company that received the most interest did so in large measure because of the dynamic character of the CEO.  Though the business model, market, financials, deal, traction etc. was all in order, it was the leader that created the buzz.  I heard private discussions such as “I like this guy” and “This kid knows his stuff.”  Oddly enough, the CEO of this company was the youngest of the five presenting.  

3.  One particular turn-off to the investors was either the total absence of the CEO, which happened in one case, or when the CEO deferred to a present or not-present CFO for answers on valuations, deal terms, or financial projections.  In short, the CEO must be present and he should be able to answer all the important questions.

I will leave you to draw the conclusions hear. I think it sufficient to say that it is difficult to understand everything an investor is looking for unless you can get the input of someone who sees it all the time. (shameless plug)