Fund: Allegis Capital
Posted by anonymous on 2007-07-22
I have pitched to Allegis in several past startups and have known many of the partners for about 5 years now. We just closed a seed round of funding with them in our Preferred A.
Negotiations on terms were fine - we were very realistic going into the deal, so there were no problems in the negotiations. Allegis is very practical in their approach to funding terms, and very fair and up front.
Allegis is ethical in their approach to your competitive data. They have never sent me any competitive data from companies that have pitched to them. In my past companies, they have always been up front in telling me when they already had an investment in this space. I believe they would never let you come pitch to them, just to give your slides to one of their companies.
Lara Druyan listened to our presentation and liked what we were working on. She liked the market, and our competitive approach, but we were way too early for venture capital funding at the time. We did not have enough traction, and she could see some areas that we could really use some help in course correction and advice. She was blunt and open enough to give us direct feedback. (Never argue when you are getting feedback like this. Just listen with an open mind. Open feedback is a valuable commodity that you rarely see from VC's. Oh - and by the way - reaction to this feedback is a test - openness to new ideas is critical in their evaluation of entrepreneurs.)
Lara opened up her impressive Rolodex of connections and knew the right people to introduce us to - experts that could help us develop our business plan and product. These contacts respect Lara and were very responsive to her introductions. She was willing to help us and put time into advising us, when she and Allegis were not yet ready to invest. She proactively called us back and set up follow up appointments to get an update on our progress and then suggest areas we should continue to develop. When she sees the potential, she is willing to cultivate the business to turn it into something valuable that Allegis will want to invest in. This made her an invaluable partner long before we fit the profile of an Allegis investment. This kind of support is so rare, and you will never see it from the "top-drawer" big VC firms. Big VC's don't believe they need to get involved early to cultivate value in your company, or prove their own value to you.
Jean-Louis Gassee met with us on several occasions to review our plan. He is bullsh-t proof. By that I mean he can see crap coming from a mile away. If your plan is not well thought out he will catch you on it, and he will tell you, and rather bluntly. He will not waste your time or his. There is a great quote from Jean-Louis that I always like to remember. He told me: "when it comes to VC's, no response is a NO response." Lack of feedback, or lack of questions or follow up is a very loud answer of no.
Be prepared - Jean-Louis will test you. One time we had an appointment with him, and set up our PC to do our standard pitch. He came in the room and told us to shut off the projector, shut our PC, and to then briefly explain to him what we do. We were a consumer-oriented company and he knew that coming in. He told us to explain it as though we were talking to his wife. No slides, no elaborate pitch - just tell him the value. This is harder than you might think, and was an incredible test of how much we really understood the value of what we were delivering to the end user.
At another meeting, we pitched an Internet advertising business plan, and Jean-Louis said - "So you're ad pimps - that's your plan"" At first we did not know how to answer such an open ended comment. Did that mean he did not like the business" We realized after the meeting, that he was testing what we knew about the Internet advertising business and the competition. If we could defend our business plan as "ad pimps" he was fine with that.
Pete Bodine is on our board. He provides a lot of value, particularly in his understanding of the market. The afternoon after we pitched to the partners - Spencer Tall went over to one of his companies to go set up a partnership for us. They had not even finished deciding on how much or when they wanted to invest and Spencer was helping us with a new biz dev deal.
Bottom line - these are the kinds of financial partners you want.PRIVATE: Members Only (1070 Characters)