The Pitch for Angel investment

This is a forum for those who don’t want VC. If you are funding your own startup yourself, be it with credit cards or whatever, you are in a sense your own Angel investor.

Last week I attended an event in which five companies made a pitch for an Angel investment. The driving force behind the idea was Boulder’s David Cohen, who wrote about the event on his Colorado Startups blog. It was also reviewed by the mysterious 5280 Angel. I think I saw that guy in the audience, though it was hard to make him out behind the fake glasses, nose and moustache.
The audience got some play money, and got to “invest” in one or all of the five companies. My only complaint with the format was that they lined the investors up and you put the cash right in their hands. A little awkward.

I was surprised by my own reaction to the companies. If I read a story about lice, or even Genetically Modified food, I get itchy, queasy or otherwise squeamish. Two of the five were medical companies, and I thought both of them would be solid investments.

The panel of experts picked Livengood, which makes essentially a glorified cart for use in hospitals. The presenter was Dr. Livengood, I presume, and he was anything but polished, but he showed one slide of a patient in a hospital trying to take a walk surrounded by an IV pole, a walker, a nurse, and aid and a family member. He said something like, “Anyone who’s ever been in or visited a hospital has seen this scene many times.” Everyone in the audience nodded, in fact I think I saw the fake nose almost come off of the 5280 Angel guy. His contraption basically puts all the stuff that hangs on or near a bed in one place. They’ve had some customers, and those customers helped with the second version of the product, and now they just need money to build some more units and do some marketing. Great investment, I think.

The other medical one was Torii Medical, which had a great patch that basically makes a patch that holds any tube that gets stuck into your body much more securely and cleanly than tape, which hasn’t advanced much in 40 years. The presenter was the weakest, making the deadly sin of reading every word on every slide in the presentation. The product, however, was awesome. Just as with the other one, it fits in the category of medical advances where they are really needed. I know PET scans and all the new drugs are all super, but there seems to have been very little advance in the more mundane things like enabling a patient to take a walk or keeping an IV tube where it’s supposed to be.

The audience winner was Chaperon, which has built a tool that makes offshore coding slightly more secure. The concept is that an offshore coder would have to use this software when writing the code, and this software prevents a person from copying and pasting the code to steal it. I think this company is on to a serious problem in a big-picture way, especially as made clear in China Inc. Intellectual Property protection is a huge issue, and will be for a generation.

One of the others, Kerpoof, probably has a great chance to make money, but they are involved in something I would never put money in: figuring out new and clever ways to get advertising in front of 3- to 5-year olds. Any business plan that carves out any demographic and then tries to figure out how to get advertising in front of it is inherently foul to me, but doing it with pre-schoolers is especially opprobrious.
The other was Magic Home Entertainment, which makes a kind of a glorified iTunes interface for very high-end home audio systems. I like country music on AM radio, so I just don’t get it, but that probably says more about me than about that company.

Seeing the presentations was also an important reminder that anyone running a business should be able to make the business case for their business clearly and quickly at any time. It’s not just a mind-game; it’s being clear about goals, which is a crucial first step to reaching them.

OK, back to work!