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You are here: Experts > Business > Small Business Information > Venture Capital & Stock > Venture funding
Expert: Jim D. Ray
Date: 11/13/2006
Subject: Venture funding
Question
11/13
Hello Jim - I've been the CEO of as specialized Internet marketing company in Santa Barbara, CA for 11 years. We've used the same marketing techniques as most other online firms including affiliate, SEO both paid and organic, AdWords/Sense, clickthrough, popads, PPC, CPM, CPA etc. That is until we found Pay Per Call several months ago. I don't know if you're familiar with Pay Per Call (PPCall), but here's how it works:
Consumers searching the Internet for products and services see ads in the search engines that link to a 'landing page', a microsite featuring an advertiser's products and his toll-free phone number. Advertisers pay for phone calls they receive from prospects rather than clicks to their web site. Conversion rates for telephone sales can be 15 times higher than conversion rates for web sites. Phone calls work because motivated buyers want immediate answers from knowledgeable salespeople and advertisers are looking for qualified purchase inquiries.
The Kelsey Group, a strategic analysis research company <http://www.kelseygroup.com> predicts PPCall will be a $1.4 - $4 billion marketing niche within 3 years.
Question: Where can we find serious investors and investment groups interested in Internet startups? We're not a bunch of kids with a cocktail napkin idea - we have a 50 page business plan and a complete handle on the industry.
Earl Brown CEO
ValueLeads LLC
e: ebrown@valueleads.com
v: (805) 569-2678
w: http://www.valueleads.com
PS: Here's a good article on Pay Per Call:
http://www.usatoday.com/tech/products/services/2005-09-05-pay-per-click_x.htm?PO...
Answer
Tuesday, November 21, 2006
10:35 PM CST
Hello, Earl:
Excellent question -- let's get right to it:
First off, this sounds exceptionally proprietary. This way of doing business is totally unique, and frankly, it could revolutionize any market segment you choose. Any existing competitor would generate billions and dominate the market until the innovation runs its course.
Therefore, the very first thing I would do is throw that business plan in a safe, and pretend it doesn't exist to your investor pool. Why?
You've got to look at investors as partners, not the angels of money they're painted to be in every SBA brochure. Finding an investment-partner is a lot like dating, and you’re going to need to go on several dates to find the right one. From an intellectual property perspective, at this critical stage, you do need to protect your interests until you feel comfortable with a partner-to-be.
To be honest, I act downright dumb when I'm meeting a prospective investor-partner. As the entrepreneur, I want to know everything about the investor as to identify potential compatibility with my goals. Even though they'll want a synopsis of your business concept, ultimately, you'll need to get the investor to expound upon their experience, to know if you can proceed with dissemination of the obviously valuable information you possess. Investors are economic warriors -- and they all have their own war stories and standards of business.
Remember: if you're in possession of extraordinarily valuable information, you're in the power seat. Nothing can change that. Don't give away valuable information as a selling point of your interaction.
I'm about to go into a biomedical venture, and I'm going to need about $4 million to get the project on track. But I won't go into a first meeting with more than an executive summary at the absolute most. I don't elaborate on my procedure, and I don't drop names. If anything, I'm going to ask this guy about his experience in various capacities as they relate to my business goals. If he asks me about more than I’ve outlined in the summary, I’m clueless (“I don’t have that answer immediately available, however it is detailed in Widget’s business plan. If you’re prepared to consider the venture further, I will need you to sign a cover letter-style confidentiality agreement.”).
I preface the answer to your question with the above because it is important to remember that serious (wealthy) investors are everywhere; however, your funding depends on your ability to maximize your interaction with prospective each at the start, and get that compatibility factor on the table as quickly as possible.
Your potential investor may be a daddy’s boy with extra cash, or it may be a board of several investors seeking to fund tech ventures serving a specific demographic. In either case, start by searching Google (http://www.google.com) for terms such as “venture capital firms” and “angel investor organizations” – there are many. From there, each organization’s web site will provide you specific instructions for submitting your concept for review.
The Small Business Administration (SBA) may also know of local-level resources or organizations that may be of value. To learn more or to locate your nearest branch, visit their web site at: http://www.sba.gov.
Earl, I hope this points you in the right direction. Should you think of other questions or need further guidance, please feel welcome to write me again at any time.
I wish you great success in your endeavors --
Sincerely,
Jim D. Ray
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