North Carolina investors from Pappas Ventures and the Inception Mirco Angel Fund (IMAF) discuss “The Art of the Deal” with the Council for Entrepreneurial Development (CED). Their answers reveal stories about unusual investment approaches; provide insight on how local investors uncover deals; and offer advice for entrepreneurs seeking funding.
In this interview on “The Art of the Deal” with Eric Linsley, an experienced operating executive and venture capital investor with Pappas Ventures, Linsley discusses his approach and criteria with investment opportunities.

CED: What is the most important factor you consider before investing?
Linsley: The three most important factors to consider before investing in a company are management, management and management. After confirming that an appropriate management team is in place, we consider other factors, such as market size, the strength of the intellectual property and competition. We also are seeking to invest in truly revolutionary technology.

CED: What is the most unusual approach an entrepreneur has made to you for investment?
Linsley: The most unique approach we have received was from a potential partner of one of our portfolio companies who approached us, which was different in itself since most of our investments are based off referrals. The company approached Pappas with flattery, mentioning that with Pappas’ strong strategic investor base that we should invest in them. After extensive diligence, we in fact saw that it was a perfect fit and an attractive investment.

CED: What is the most important characteristic you look for in an entrepreneur you are considering investing in?
Linsley: Aside from management, the entrepreneur should have a clear alignment of objective on what they are trying to accomplish. They need to be thinking where they want to be in 5 years, 10 years, etc., and what their role will be through the years.

CED: How do you find most of your investments? Are conferences and programs, such as CED’s Venture Conference or FastTrac Tech helpful?
Linsley: We receive many referrals from the San Francisco, San Diego and Boston areas. However, a big piece of our geographical focus is in the underserved areas like RTP, Indiana, Greater Maryland, etc., where organizations like CED help us identify the companies to invest in.

CED: What advice or tips do you have for entrepreneurs looking for money?
Linsley: Have your two-minute elevator pitch down pat. Be able to tell someone why they should invest in two or three sentences. Entrepreneurs should also understand how VCs assess their investments and only make promises they can deliver on.  Be open to constructive criticism and feedback.

In this interview on “The Art of the Deal” with Timothy Janke, an executive fund director with the Inception Mirco Angel Fund (IMAF), Janke discusses what he looks for in an investment candidate and offers guidelines for entrepreneurs.

CED: What is the most important factor you consider before investing?
Janke: The most important factor IMAF considers before investing is the potential of the deal and the company’s management team.

CED: What is the most unusual approach that an entrepreneur has made to you for investment?
Janke: [chuckles] Nothing terribly unusual, most commonly applicants come through our Web site by filing executive summaries. Some, however, come to our Web site and neglect to read that we focus primarily on life science companies so every now and again we receive applicants like country western singers looking to raise money to put out their next album.

CED: What is the most important characteristic you look for in an entrepreneur you are considering investing in?
Janke: Coachability. Entrepreneurs must have enough backbone to defend their position but be flexible enough to take outside advice.

CED: What advice or tips do you have for entrepreneurs looking for money?
Janke: Be prepared. Your executive summary should be crisp and current and your pitch should be well rehearsed. You should be able to describe what your company does in about 30 seconds.