VC Panel Discussion
TIE HOUSTON VC PANEL DISCUSSION ATTRACTS SELL OUT CROWD
 

Ram Velidi – Sevin Rosen Funds opening comments while panel looks on. From left to right: Ashok Rao, Krishna Srinivasan – Austin Ventures, EAlliot Bouillion – Murphree Venture Funds and Aruna Viswanathan – Aegis Capital Partners

TiE (The Indus Entrepreneur) Houston held its August monthly event at The Monarch room at the Westin Galleria on 2nd of August, 2006. The event was part of TiE’s series of high profile speaker events. Through this series of events, coupled with bi-weekly mentoring round tables, TiE Houston aims to revive its commitment to fostering entrepreneurship, mentoring aspiring entrepreneurs and provide networking opportunities for a wide spectrum of business professionals in the greater Houston area.

The Venture Capital panel discussion on August 2nd attracted an impressive audience of over 150 entrepreneurs and business professionals. During the social hour prior to the panel discussion, venture capitalists mingled with business professionals and entrepreneurs, networking and engaging in invigorating discussions of new business ideas. A laid back, yet energetic, atmosphere allowed attendees to approach high-profile and difficult to reach VCs - Krishna Srinivasan from Austin Ventures, Ram Velidi from Sevin Rosen Funds, Aruna Viswanathan from Aegis Capital Group, and Elliott Bouillion from Murphree Venture Partners.

Sell out crowd of 150 registered (paid) attendees pays attention to VC presentations

The VC panel addressed a wide range of topics. Ashok Rao, the president of TiE Houston, moderated the panel and the Q&A session that followed. Different styles of investing emerged between Houston-based Aegis Capital and Murphree Venture Partners, Austin Ventures, and Dallas based Sevin Rosen Funds. Investment strategies differed vis-a-vis industry focus, geographical scope, investment size and stage of a start-up company’s maturation. VCs from the larger firms, i.e. Austin Ventures and Sevin Rosen focus primarily on technology related businesses, while the smaller Venture Capital firms, i.e. Aegis Capital and Murphree Venture Partners tend to diversify their holdings. The larger firms typically invest upwards of several million dollars, and the smaller firms invest as little as $250,000.

The major takeaways for entrepreneurs were:
1. VCs look for well-articulated, sound market opportunity stories.
2. They prefer referrals to them rather than going to them directly. Don't waste your and their time contacting them directly!
3. A short summary will get their attention better than a business plan (initially). They discount your plan anyway, so why bother with the details!
4. They need to have a go-to-market plan. They are not looking for how well you manage your money but how well you can exploit market opportunities
5. Management team, especially board of advisors makes a big difference. Subtle way of saying, don't be a Lone Ranger - we need a collective wisdom working on this business.
6. Showing that the firm has an understanding of risks and how they are being managed/mitigated will increase valuation.
7. A majority were looking for consolidation plays rather than independent startup firms. Their investments need to fit into a grander plan and vision. IPO's are rare these days, and exits are typically take an acquisition route, into some large firm, with a painful gap in its offerings.

All the VCs agreed on the importance of TiE events. Krishna Srinivasan recounted how his most successful investment to date originated out of a chance meeting at a similar TiE event in Dallas.

At this event, Mr. Rao also announced a new youth mentorship program (Young TIE – “YT”), which will allow YT members to create their own organization within TIE to serve the specific needs of aspiring entrepreneurs under 30 years of age. Members of YT will have access to mentoring and advice from veteran entrepreneurs. TiE Houston will continue encouraging fresh business ideas and business start-ups through this program with a contest for new business ideas, culminating in a cash grant to the winning proposal at TiE’s annual conference and gala in Q2 2007. Future TiE Houston events in 2006 will feature speakers such as John Hoffmeister, Pramod Haque (rated by Forbes as the world’s #1 VC) and C.K. Prahald. More information on all upcoming TiE Houston events can be found at www.tiehouston.org.