Good news for startup entrepreneurs looking for funding, a seed stage funding group, the Colorado Capital Group, has been launched in Boulder, Colorado.
Marc Silverman (pictured right), the former Executive Director of CTEK Boulder, is one of the partners at CCG. Some of you may have heard at the time that Marc left CTEK Boulder that he was going to start a seed stage funding group called Mountain Angel Capital. Mountain Angel Capital changed its name to Colorado Capital Group (CCG). I interviewed Marc to in order to learn more about CCG. Heres the interview:
Q: Marc, thanks for taking time out of your busy schedule to do this interview. First off, lets start with your background. Please, give us a brief background of your entrepreneurial journey.
I worked as an engineer for five years, moved to product management for a few years, then the business development side for a few more years, and joined a company that went public 18 months later. I then ran a medical informatics business unit, which I helped sell to a public company. I worked hard and contributed a lot, but was very lucky to be in the right place at the right time. I couldnt have predicted the chain of events.
I started my first company in the early-90s. We raised money initially from high net worth people (we called them rich guys, not angels), and then raised VC money. Sold that company in 1995. I licensed the IP back, and started another company. Retired in 2006. Began angel investing in 2006, learned a lot, and here I am.
We didnt know very much with the first company. We had the foresight, luck and tenacity to stumble into a good idea at exactly the right time. It was a constant state of chaos, iteration, and brute force. I also was very fortunate to meet a few amazing mentors that really changed my life.
Q: Thats an interesting history indeed. After your retirement, what made you want to become an angel investor?
It seemed like a good idea at the time. I look at business with an entrepreneurial perspective, I love start-ups, and I like working with entrepreneurs. I like being involved in the process, and I like the idea of offering more than money.
Q: You are starting a new seed stage funding group, Mountain Angel Capital. Can you tell us a more about Mountain Angel Capital?
Sure. First, Ill tell what we are not. We are not traditional venture capitalists, and we are not passive angel investors.
Also, we recently changed the name to Colorado Capital Group. We like the idea of capital and group. We are a group of successful entrepreneurs dedicated to bringing capital and hands-on mentorship and discipline to early-stage companies.
Q: Who are some of the members of the group?
Tapesh Yadav is a successful serial entrepreneur and CEO. He has 15 years experience in building start ups from zero to leadership in diverse markets ranging from devices and clean energy to materials and nanotechnology. Hes a prolific inventor with over 50 issued patents. Tapesh brings insights in market-focused innovation and IP strategy. Hes led and expanded his businesses globally, attracting tens of millions dollars in corporate investment and multiple acquisition proposals from some of the worlds largest and most successful companies. He has successfully led, negotiated and closed exits.
Rob Geller, has been an investor, co-founder, executive, and board member with numerous emerging growth companies in the industries of software/internet, alternative energy, healthcare, and hi-tech manufacturing. He has experience with angel, VC and public financing with a successful track record of investor returns.
Well add a few more people as we go along
Q: When will CCG start operating?
Q: Are you going to be funding startups in companies in a specific market?
We focus on what we know medical devices, software, sustainable energy, and nanotech/devices. We are very small and regionally focused.
Q: When you mention software, is that limited to Web 2.0 software or you are pretty much open to any and all software out there?
Were pretty much open.
Q: You were quoted by the Boulder County Business Report as saying your new group will try to bring more structure to the often frustrating process of raising money for a startup from angel investors. How is CCG restructuring the process? What should the startup entrepreneur look forward to once CCG is up and running?
Its very tough for first-time entrepreneurs to establish a base of angel investors. The process is time consuming and chaotic. A lot more people talk about angel investing than actually write checks. Its tough for the entrepreneur to know who is for real, and its equally tough for the angel investor to individually complete the necessary due diligence and other items on their own. Ive personally found the angel investing process (in Colorado) to be very fragmented, inefficient, and extraordinarily risky.
There are a number of local angels that really know their stuff, have incredible networks, and get companies funded. Unfortunately, there are not enough of them to go around. Its difficult for the non-superstar entrepreneur to wade through the angel clubs, making 8-minute pitches to marginally interested people. Its equally difficult for potential angel investors to listen to the pitches and figure out whats what.
Our goal is to bridge that gap with access to capital and high quality advisors. We are dedicated to bringing the capital, insight, expertise, oversight, relationships and connections necessary to help mitigate early-stage risk, and to help position companies for the next stage of their growth.
Q: How will CCG make the path to funding easier for a non-superstar entrepreneur?
Well listen, be candid, and make decisions. And, if it makes sense to us, well be the lead investor, and help you through the process.
Q: You mentioned that you will be bringing the connections necessary to help mitigate early-stage risk. What do you mean by that? Are you going to have a different methodology for screening deals?
Connections are one of the many things involved, and well do our best to use our contacts, as required. More importantly, we will select companies based our own, very stringent set of criteria, and well spend the hands-on time necessary to help start-ups develop and make good choices. This kind of hands-on relationship is not for every entrepreneur, but its our model, and we will stick to it.
We are operating guys with lots of entrepreneurial experience. We are very optimistic and opportunistic, but were also realistic. I think we have a great opportunity to meld our weve made that mistake before, and theres no need to make it again with the right entrepreneurs vision, drive and charisma. We will not be oppressive (Ive been on the other side of that one and its not fun), but we will help provide guidance and discipline. We dont want to run the company, or even need a majority position. We want to be engaged team members.
Q: You are going through a startup phase with CCG. How are your startup experiences now different from when you started your first start-up company?
Oh boy, Im not sure where to start on this one. Three things immediately come to mind: One, when I started my first company, there wasnt much information out there on how to do it, so we guessed, and adjusted. I had several ugly meetings with potential investors because I didnt know how to qualify them. A venerable Silicon Valley VC actually told me (as I was standing in front of the group) that I was wasting his time. I had no idea what a presentation should look like. Currently, theres a plethora of information on everything from the 10 slides for the first meeting, to what you should say at the second meeting, what you should wear to the third meeting, how to be civilized at networking events, and everything in-between. I think this is all great, but I caution entrepreneurs to process a lot of this with a grain of salt and incorporate their own personality. I see a lot of stuff that looks like everything else, because theyre working from the same playbook.
Second, producing a prototype is easier. The tools are more powerful, so its easier and quicker to produce something tangible. Development used to take more time and money, so it forced more thought and discipline (so the theory goes). Developers need to understand that just because they can create it doesnt necessarily mean that people will pay for it. I think its too easy to rationalize the thoughtless approach that well just get something out there, and the market will respond. The big successes make news, but there are a lot of wrecks along the road with this approach.
Third, I dont know if access to money is easier, or harder. Theres a lot of competition out there, but it sure is easier share your ideas.
Q: What are some of the lessons that you have learned in your years both as an entrepreneur and as an investor?
1. Think, think, think about what are doing, why youre doing it, and whether it will be meaningful to anyone else.
2. Ive received some of best advice from entrepreneurs who are serial failures
3. Do you really need to raise money? Why? How much? When? Can you explain all of this to outsiders quickly and convincingly? Try to convince your family first.
4. Raising money is really hard. Anyone who tells you differently either hasnt done it before, or has rich parents.
5. Find great partners.
6. Listen to everyone, but select your advisors carefully, and for the long haul.
7. The process takes time.
8. Try to create and follow the path of least resistance its hard enough.
9. Focus is incredibly important. Think everyday about how you can make tangible progress. Is the company different at the end of the day, week, and month?
10. Internalize the process of making money. Can you ultimately sell your product for more than it costs you?
11. Dont dwell on exit strategies. Do something meaningful, and it will probably work out okay at least youll have options.
12. Think like a customer.
13. Dont over-intellectualize youre not curing cancer, unless you really are.
14. Its a small world. Be nice.
Q: Now lets turn our attention to the local tech startup community. What do you attribute to the current boom of viable startup technology companies in Boulder?
I dont know what is viable and what isnt. The environment is certainly robust. Things are cyclic, so time will tell. However, I think that there are a few reasons for the energy:
1. Its a great place to live, and people tell their friends,
2. Theres a phenomenal support community here of senior, successful entrepreneurs graciously willing to share their insight, time, contacts, and (occasionally) their cash.
Q: What does Boulder have to do to keep growing the technology community?
Success breeds success. Hopefully, some of the startups in process will produce a handful of successes, and those successes will create opportunity, attract more talent, money, etc. And, keep your fingers crossed that we dont invade another country.
Q: From your perspective as an investor, what are the challenges in Boulder right now?
Separating signal from noise.
Q: Do you have some parting advice for aspiring entrepreneurs?
Get a real job if you havent had one. Its a great way to see what works and what doesnt. Learn your strengths and weaknesses (i.e., can you manage people? do you even like people?). Work on your startup in your spare time until you are ready to commit. Once you are ready to go, be willing to work really hard, meet with lots of people, be humble, learn to prioritize, and dont take it too seriously. You can always try again.
Thanks for the interview, Marc!