March 5, 2010

An Investor’s outlook on Social Media

Damon Kirchmeier

I had the pleasure of interviewing Damon Kirchmeier—Managing Director of InnoVentures Capital Partnersabout social media. Why him? He’s affable, amiable, amicable, approachable… (and every other synonym for ‘friendly’ contained in the thesaurus). Interviewing nice people makes my job a lot easier!

He’s a truly genuine fellow: he’s out on the road every day carefully investigating the state’s newest ventures. He’s ‘all business’ and works harder than anyone else to identify and fund great startups.

Quick anecdote: He identified Fezzari bikes way back when. He not only offered them funding (they didn’t end up needing it) but also offered to help design bikes!

Here is our interview

FundingUniverse: You’ve got the most eclectic resume I’ve ever seen. You used to work as a nuclear plant engineer, managed Navy & civilian personnel at a dual reactor plant, medaled in World-Championship Downhill bike racing, designed bicycles for Fezzari… and now you’re Managing Director at InnoVentures Capital Partners. Does your wife need to start lacing your breakfast cereal with Ritalin?

Damon Kirchmeier: yes

FundingUniverse: Why Venture Funding?

Damon Kirchmeier: Because it’s cheaper than other sources, you want to preserve equity, or you don’t fit any other source. Banks want 3 years of profitable operating history and collateral and equity investors want 10x their money in 5 years – lots of good companies don’t fit these criteria.

FundingUniverse: Has anyone ever contacted you about funding via social media?

Damon Kirchmeier: No

FundingUniverse: Is Social Media a good way for entrepreneurs to seek funding?

Damon Kirchmeier: I think it’s a good way to narrow a search or find potential funding sources. For a fund like mine, I am already flooded via traditional sources like phone and email.

FundingUniverse: What advice do you have for entrepreneurs in using social media to find investors?

Damon Kirchmeier: I wouldn’t necessarily assume an investor is going to review your info until they are way down the line.

FundingUniverse: what advice do you have for entrepreneurs in using social media to impress investors?

Damon Kirchmeier Your online image is a reflection of you as a person so make sure it says what you want it to.

FundingUniverse: Have you seen social media waste entrepreneur’s time & money?

Damon Kirchmeier: Mostly time.

FundingUniverse: What did they do wrong?

Damon Kirchmeier: Blogging on topics they do not fully understand or blogging on controversial subjects which may offend a potential investor.

FundingUniverse: Have you seen social media used effectively by small businesses?

Damon Kirchmeier: Yes, I love the “Will it Blend?” series from Blendtec on YouTube. They found a very fun way to show the product capabilities.

FundingUniverse: Which social media networks do you find most effective?

Damon Kirchmeier: LinkedIn, Facebook, YouTube

FundingUniverse: Which social media networks do you find to be a waste of time?

Damon Kirchmeier: MySpace, Twitter