InvestNet: Matching investors with entrepreneurs

Posted: Tuesday, February 08, 2000

Trying to match investors and entrepreneurs to finance homegrown business ideas has been slow going so far.

But a variety of seminars in Juneau, Fairbanks and Anchorage are intended to stir interest in the 17-month-old Alaska InvestNet program, said Deborah Marshall, director of InvestNet. Marshall works for the Juneau Economic Development Council, which administers InvestNet.

``We're definitely fledgling, but I see a lot of good potential in this,'' Marshall said. ``I'm adamant about small business being the answer to a lot of our woes, in terms of diversifying the economy.''

InvestNet is a confidential matching service but doesn't actually broker deals. Rather, it tries to attract ``angel'' investors to projects that are typically midway between research-and-development and traditional financing.

Accredited investors - with $1 million in assets, plus an income of $200,000 or more a year - sign up to review business plans that entrepreneurs develop with assistance from InvestNet. Investors pay $500 a year to join the network; entrepreneurs pay $250.

Matches don't necessarily take place through the network, however. That, and the strict confidentiality of InvestNet, makes it hard to judge its success to date.

``We need one success story, which we don't have yet, in high tech,'' Marshall said.

About $2.5 million in potential equity funding is available through the nine investors currently listed by InvestNet, and about two dozen business plans have been shopped around, so far, she said.

Recently, InvestNet sponsored the Juneau forum, ``How Much is Your Business Worth?'', in which Anchorage accountant Michael Hanrahan spoke on market, income and asset approaches to valuing a company.

Next week, investors will attend a reception in conjunction with a meeting in Juneau of the Alaska Science and Technology Foundation, a quasi-state entity that provided the $400,000, three-year budget for InvestNet.

And in Anchorage on April 3 and 4, InvestNet is sponsoring the 2000 Capital Investment Conference, with a keynote address by former Gov. Wally Hickel.

Up to 10 entrepreneurs will be flown to Anchorage, all expenses paid, to present their products to investors.

InvestNet recently opened an Anchorage satellite office, and Marshall has been traveling there on a regular basis.

Although there are some private investment clubs, InvestNet is largely alone in trying to match viable business plans with like-minded investors in Alaska, Marshall said. ``We don't have active venture capital in the state. We don't have a way for entrepreneurs to finance in Alaska, except through their friends and family. . . .

``The money is here. There are some very good ideas out there. But the hole, the gap, is in the talent pool - the management team to pull these deals off. We need to educate the entrepreneurs and the investors.''

Allan Johnston, an InvestNet board member, said that investment has been hampered by an attitude of ``What's in it for me immediately?''

Established chief executives, who make up a large part of the pool of potential investors, need to recognize that while there might not be quick payoffs for investment, they can leave a legacy and even have some fun in providing capital for new business start-ups, said Johnston, a securities manager with Wedbush Morgan in Anchorage.

Marshall was once an entrepreneur herself, and so she understands the difficulty in finding start-up money. She launched the Fiddlehead Restaurant in 1978 with the assistance of friends and family, financing half of the cost through venture capital and half through loans.

Marshall, who recently sold the Fiddlehead, hopes to tap into ``a real sense of civic entrepreneurship'' with InvestNet. Providing venture capital is riskier than investing in the stock market or in bonds, but there's more potential payoff, too, she said. ``It's off-the-chart rewards if it happens.''

In Alaska, there is isolationist mentality that can work against venture capital, with some entrepreneurs resisting the idea of others owning part of their companies and having a say in how they're run, Marshall said. But at the Fiddlehead, ``The advice I got from my shareholders was more important than the money.''

Trending this week:


© 2018. All Rights Reserved.  | Contact Us