In Philadelphia, where finding a start-up investor is as tough as finding a Cowboys fan — or at least one who will admit it openly — the Angel Capital Expo could be considered an entrepreneur's dream come true.
The annual event by Keiretsu Forum Mid-Atlantic brings together the private-equity community with entrepreneurs looking for funding — generally $1 million to $2 million.
If recruitment goes according to plan, the group's sixth expo, on Oct. 17, will draw its biggest investor crowd yet, expected to reach 250, up from 160 the first year. Twelve companies each will have a shot at impressing investors enough to commit capital to their ventures in the Lincoln ballroom at the Union League of Philadelphia. The move upstairs this year was prompted by last year's standing-room-only turnout of 220, said Howard Lubert, Keiretsu Mid-Atlantic cofounder and president of the Philadelphia-area chapter.
There's a very good chance the day will end with most, if not all, companies leaving with funding commitments, Lubert said, because they have been through substantial preparation, including pitching in front of investors at monthly Keiretsu meetings and undergoing mandatory coaching.
"I'd say 10 out of 12 walk out of the expo knowing there are people who have committed to write checks," said Lubert, a 30-year veteran of venture capital and private equity.
While still soliciting investors for next week's expo, Lubert was thinking deeper into the calendar.
"I'm hopeful that next year we will convince our counterpart angel groups in PAN [PA Angel Network] to come together and jointly run our own one-day expo, where all our angel groups can come together and share our deal flow … where we can focus on the best of the best angel investment opportunities in the entire mid-Atlantic region and certainly here in the Delaware Valley," Lubert said. "The motive is to get all the deals funded and share syndication of deals."
Lubert said a combined expo would give angel groups — many of which limit their investments to early-stage companies in a single category, such as tech or life sciences — an opportunity to get in on deals they might not otherwise consider or even see. Keiretsu has 31 chapters in North America and 22 in Europe, Asia, and Australia. Its 3,000-plus members are typically interested in Series A and B rounds, later stages than typical angels.
PAN consists of 22 angel-investor groups, many of which participate in an annual pitch-fest with considerably older Philadelphia roots than Keiretsu — Angel Venture Fair, held each spring, also at the Union League. This year's event was AVF's 20th.
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Marc Kramer, who as executive director of Private Investors Forum organizes the AVF, said he was open to the idea of a joint expo.
"There's no shortage of people trying to get money," he said. "Anything that's going to help the region attract more quality companies and more capital to grow those companies has got to be a good thing."
Kramer just doesn't want to run it. Securing sponsors has become "hard work" since AVF's early years, he said. "There's a lot less sponsorship money than there was 20 years ago."
Law firms, insurance brokers, banks, and accounting firms all "want a good return on investment." Start-ups — 34 presented at this year's AVF in May — don't have a lot of money to spend on professional services. Consequently, pitch events for such early-stage companies aren't widely considered fertile ground for lucrative business prospects, Kramer said, criticizing that view as shortsighted.
Lubert doesn't know how much buy-in he'll get.
"I really haven't started to push it hard," he said. "My plan is to start talking it up at the PAN meetings after the [Keiretsu] expo."