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ATTENTION: INVESTORS
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Less
than a decade ago, Midwestern entrepreneurs in search of venture
capital were on their own. They had no formalized vehicle to
help get them in front of potential investors, and there was
nothing to show those investors the value of investing in high-growth
companies in the Midwest.
The St. Louis RCGA and Missouri Venture Forum recognized the
challenge presented by this void and decided to do something
about it. In 1999, they joined forces to launch InvestMidwest
Venture Capital Forum.
Then the Danforth Foundation in St. Louis and the Ewing Marion
Kauffman Foundation in Kansas City were enlisted. The two eminent
foundations committed seed funding for the program and the first
InvestMidwest capital forum was held in St. Louis in May 2000.
Since then, InvestMidwest has provided an annual venue for high-growth
businesses to present their opportunities to investors, with
the location rotating between St. Louis and Kansas City. The
2007 Invest-Midwest will be held at the Sprint National Headquarters
in Kansas City on April 10 and 11.
The event‘s first year saw 20 St. Louis and Kansas City companies
presenting with local and regional investors attending. Since
then, the event has shown the same kind of growth as the entrepreneurial
companies that it showcases.
Mark
C. Pydynowski,
co-founder, Somark Innovations |
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InvestMidwest initially presented only companies in Missouri
and Kansas. As Chris Walsh, executive director InvestMidwest,
visited other venture forums she met with investors who had
attended InvestMidwest. “The feedback I received about InvestMidwest
was positive,” she says, “but they expected the forum to showcase
companies that represented the broader Midwest, as the conference
name implies.”
That triggered the event’s enhanced outreach efforts.
“After the first two events, we accepted applications from companies
in neighboring states, and in the last several years our application
campaign has grown to include any company within the central
United States,” Walsh says. “Last year we had applications representing
17 states throughout the greater Midwest.”
The number of presenting companies also has increased. For the
first four years, the event showcased 20 companies annually.
“It became apparent that to continue to attract the venture
investor to Invest- Midwest, we needed to provide them a larger
number of companies—without sacrificing quality—to see at one
venue,” says Dr. Robert J. Calcaterra, president of the Nidus
Center and an InvestMidwest board member. “With the growth of
the life sciences industry in both St. Louis and Kansas City,
our region has developed a depth of companies in the life sciences
area that are great investment opportunities.”
Since 2005, InvestMidwest has showcased 30 companies each year,
15 in the life sciences industry and 15 in technology and general
business.
Tom
Melzer,
managing director, RiverVest Venture Partners
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As InvestMidwest developed the two industry tracks, they were
able to showcase more high-growth companies. This has made the
event more focused for the venture capital community, whose
members tend to concentrate on specific industries.
Attracting the best of the Midwest’s fast-growth companies to
present at the investment forum requires a tremendous effort.
InvestMidwest is in regular, year-round contact with more than
80 business, investment, technology and life sciences organizations
throughout the nation’s midsection to maintain their awareness
of the venture forum. Applications usually come in from about
100 high-growth companies—firms projecting revenues of $20 million
within five years. Two committees of regional venture capitalists
and professionals in the life sciences and technology fields
screen the applications of the firms, which typically seek $1
million to $10 million in funding.
Presenting companies are selected based on clearly defined criteria,
with a maximum of 15 firms selected for each of the two tracks.
Personal coaching clinics are set up for the presenting executives
of the selected companies.
“We hold dress rehearsals for each presenting company before
the actual event,” says Walsh. “At the dress rehearsal, presentations
are video-taped before a panel of reviewers, who suggest improvements.”
Presenters are limited to 10 minutes each to describe their
business opportunity.
“Making a compelling case for your company in that short period
is a tremendous challenge,” Walsh says. “We make every effort
to help the presenter perfect that crucial presentation.”
Numerous past presenters can attest to the value of the experience,
including Mark C. Pydynowski of Somark Innovations.
“InvestMidwest helped us apply a critical focus to our business
strategy and to build our presentation from the investor’s viewpoint,”
he says. “The investor is interested in our technology, but
is especially interested in the value of the technology in the
marketplace.”
The InvestMidwest forum also facilitates networking among venture
capitalists and others in the investor community. The networking
helps build relationships among firms that ultimately may co-invest
in projects, a common practice in seed investment rounds.
“InvestMidwest in many ways serves as a facilitator for us to
meet and get to know others in the field,” says Tom Melzer,
managing director of RiverVest Venture Partners and an InvestMidwest
board member. “The event provides us opportunities to network
and to discuss our priorities and investment focus. It promotes
the building of relationships among investors that is necessary
to encourage the co-investing in start-up opportunities.
Not surprisingly, Invest-Midwest leverages the presence of national
and regional investors in St. Louis to showcase the region.
“This year, the InvestMidwest program and the RCGA created a
video to highlight the entrepreneurial strengths of the St.
Louis community,” says Walsh. “In one 24-hour period, we strive
to give the venture investors an experience that not only reflects
great Midwestern business opportunities, but also positions
our region as a great place to invest.”
In the last two years, the program has reached out to angel
investors, groups or individuals who provide early funding for
many high-growth companies. Most communities in the Midwest
now have angel groups, such as the recently formed St. Louis
Arch Angels and the Midwest Angels in Kansas City.
At this year’s conference, angel investors were able to attend
a seminar on company valuation and a private networking event,
in addition to the InvestMidwest program.
“We try to provide the companies that present at InvestMidwest
every opportunity to meet members of the investment community,”
says Walsh. “Clearly, angel investors are an important component
in investment funding.”
InvestMidwest’s activities are guided by its board of directors,
with members representing major players in the economic development
and investment communities in St. Louis and Kansas City. In
addition to the strong support Invest-Midwest has received from
the Danforth and Kauffman foundations, its sponsor base includes
private firms and public entities that seek to promote the growth
of entrepreneurial companies.
Ralph
Clermont,
managing partner, KPMG |
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“InvestMidwest has been fortunate to have key sponsors who believe
in the InvestMidwest mission and support our efforts with their
professional time and expertise, in addition to their financial
commitment,” says Dick Fleming, president of St. Louis RCGA.
“This is a community effort to help build the entrepreneurial
economy.”
Sponsors clearly see real value in their support of the event.
“We believe in promoting business, and developing and strengthening
the entrepreneurial environment,” says Ralph Clermont, managing
partner of KPMG and a sponsor of InvestMidwest since 2000. “When
you raise the tide of the economy for some, it raises for everyone.
Our association and investment in the InvestMidwest program
is integral to helping raise that tide for all of us.”
“The main goal of InvestMidwest—to help high-growth companies
secure funding—has not changed in the last seven years,” says
Walsh. We have just broadened our efforts to attract great companies
to showcase to a growing audience of investors.”
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InvestMidwest
Board Members
as of July 1, 2005
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Randy
Buseman, Ernst & Young LLP
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Jeremy
Degenhart, Advantage Capital Partners
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Bob
Calcaterra, NIDUS Center for Scientific Enterprise
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Steve
Johnson, St. Louis Regional Chamber & Growth Association
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Dick
Fleming, St. Louis Regional Chamber & Growth Association
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Bob
Grant, The Greater Kansas City Chamber of Commerce
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Tom
Melzer, RiverVest Venture Partners
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Maria
Meyers, KCSourceLink
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Michele
Weigand, Kansas Technology Enterprise Corporation
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Mitch
Woolery, Kutak Rock LLP
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