It’s been a while since I’ve written anything of consequence, but this past week has inspired me to spew more of my thoughts and rants on virtual paper. I have began the process of networking among the entrepreneurs here in the land of enchantment.
This week I attend a conference on starting a high-tech business in New Mexico with a local tech incubator, Technology Ventures Corporation (TVC). They run a series of seminars called Center for Commercialization & Entrepreneurial Training (CCET). Started in 1993, TVC was an effort to commercialize technology developed in our national labs (Sandia and Los Alamos). Lockheed Martin runs Sandia National Laboratories here in Albuquerque and in Livermore, CA. They went fishing for new business opportunies within the Lab hence TVC was born. TVC provides services to start-ups wishing to commercialize their technologies into products. They will analyze business plans, mentor and introduce you to venture capitalist if your product or idea proves worthy of an introduction.
This weeks seminar was about writing a business plan. One of the Project Directors Suzanne Roberts, gave a great presentation. I’ve spoken with her one-on-one before and she seems extremely knowledgeable.
One of the speakers that got me most excited was John Chavez, President of the New Mexico Angels investment group. His presentation on the Venture Capital industry from an angels perspective was eye-opening. In his view the conventional VC model is broken. It is much too focus on 30x to 10x returns on its portfolio. So VC’s are shifting their investing into later stage funding rounds of a venture. Most of their portfolios are filled with dogs that the fund is force to continue to finance. That leaves little money for new ventures. In 2007, 258,200 angels pumped $26 billion into 57,120 U.S. companies. Now this figure is pre-recession however, it does show where lots of money resides for early stage ventures.
And what are regional Angels and VCs looking to invest in? Mr. Chavez’s group is looking for companies doing software, database storage and retrieval, as well as early stage medical device and drug makers. You would be surprised how much of this stuff happens out here in the desert. The labs here specialize in the material sciences and supercomputing to support the nuclear weapons stockpile security mission. That produces lots of data and new methods to store, retrieve and process it.
There is also lots of “Green†tech that starts in our labs, however these are usually too capital intensive so they often require “Big” VC funding combined with government grant money to scale. Angels, at least out here, don’t go there. New Mexico Angels typically invest during a seed round at no more than $500,000. The New Mexico Angels are having a Angel Bootcamp on April 19th that I’ ll be attending. There I hope to do some good old fashion networking to see if I can highlight some innovative New Mexico start-ups.