Leading venture capital firm visits SkySong to discuss faculty startups

“If you want money from a Venture Capital firm, start by asking for advice.”

That’s the advice Sam Kingsland, managing director of San Francisco-based Granite Ventures, provided – for free – to faculty attending a session regarding startup funding options held at SkySong last week. Kingsland and Granite Ventures Principal Brian Panoff came to SkySong at the invitation of Venture Catalyst at ASU, which helps faculty, students, alumni and ASU-linked companies launch new startups or accelerate existing ventures.

Kingsland said university research remains the number one area of startup creation in the technology industry, but there is plenty of competition for investor dollars. His firm typically assesses 1,600 investment opportunities each year, closely examines 50 of those, and makes only five to 10 investments annually.

“The key is to be part of the group that gets from 1,600 to 50,” said Kingsland. “And there are proactive steps you can take to make that happen.”

Kingsland’s opinion is that the business plan is an “anachronism” at this point. It’s really all about the PowerPoint presentation.

“Have eight, 20 and 40 slide versions of your pitch,” suggested Kingsland. “Start with the eight-slide version, make your pitch in 20 minutes, then say: ‘Give me a reaction. Is this interesting and relevant to you?’”

“The key is getting out and talking to people who can give good advice, iterating your pitch based on those discussions, and then talking to them again.”

Panoff provided a positive counterweight to recent negative reports regarding the state of venture funding in Arizona.

“There’s plenty of capital available for the best ideas in [the technology] space,” said Panoff. “More than 50 percent of venture investment happens in places that are less than an hour away from ASU. The primary limitation VCs face is time, so that proximity is good.”

For faculty startups, which are typically based on intellectual property generated in campus labs, Kingsland offered a cautionary note.

“There can be real ‘gotchas’ with IP,” said Kingsland. “It’s important to treat IP in a thoughtful, calculated fashion so patentability is preserved.”

At ASU, Arizona Technology Enterprises (AzTE), the university’s exclusive intellectual property management and technology transfer organization, works to help ASU researchers protect and commercialize their inventions.

Kingsland and Panoff also described some things faculty should look for from VC firms when they are deciding where to seek investments, including a strong track record of successful companies, stability among the firm’s partners, and relevant experience and networks.

“You’re looking for investors who are active and engaged enough to provide value, but mature enough to avoid micromanagement,” said Kingsland.

After the session, Kingsland and Panoff met with selected Venture Catalyst clients and ASU faculty in a series of six private pitch sessions.

Granite manages over $1 billion in venture capital and has invested in more than 90 private companies. Learn more at www.granitevc.com.

The next Venture Catalyst Faculty Workshop will be held at 8 a.m., Feb. 24.  The topic is how commercialization is different in the capital-intensive cleantech industry.  Email Barbara O'Connell for more information or to RSVP.