3 Rivers Venture Fair to link capitalists to early-stage companies
At 10:10 sharp Thursday morning, Scott Sneddon will get nine minutes to persuade a few capitalists to sink $2 million into his South Side company.
He is CEO of Sharp Edge Labs Inc., a biotechnology company that produces medical dyes and other biosensors that are used to determine the efficacy of new drugs. It needs the money mainly to build out its lab and expand production.
“You only have nine minutes to tell your story, so you have to figure out what you really want to say,” Sneddon said.
About 40 companies are making such pitches at PNC Park on Thursday as part of the 3 Rivers Venture Fair. The gathering of early-stage company presenters and venture capitalists has aimed at marrying the two parties since 2002.
“It starts with the idea if you have a great idea and have a great person selling that idea, you have a leg up for getting investors,” said Kelly Szejko, president of the Pittsburgh Venture Capital Association and the venture fair.
Sharp Edge Labs, for instance, says its testing methods more quickly and inexpensively detect whether new drugs are effective. The company needs more money to expand production to meet expected demand from two global deals it is negotiating.
“We try to give a clear picture of what will happen to our company if we get this ($2 million) investment,” said Sneddon. “If you ask for a certain amount of money, people want to know how far you can go.”
The Pittsburgh region has run counter to a national trend in venture capital dollars and deals in recent years, according to a report by Ernst & Young and Innovation Works, which invests in early-stage tech companies.
In 2012, 190 early-stage tech companies in the Pittsburgh region drew $329 million in venture capital. That was up from 123 companies and $327 million in the year earlier.
Nationally, 3,363 companies drew $29.7 billion in venture capital last year. But that was down from 3,505 companies and $35.1 billion in the year before.
“The investment community is recognizing that there are great companies here and that Pittsburgh has globally competitive strengths in software, life sciences, robotics and other sectors,” said Innovation Works President Rich Lunak in a statement.
Venture capitalists invested 42 percent more in this region last year than in 2008, when they invested $231 million. In contrast, the national total decreased 10 percent from $33.1 billion in 2008.
The report said software companies around the Pittsburgh area attracted the largest share of venture capital in 2012, followed by makers of medical devices, energy technology companies and health care information technology companies.
The venture capital association set up a “boot camp” six weeks ago to coach people to show presenters how to “put on their best face for the fair,” said Szejko.
One of the many presenters using such coaches was AllFacilities Energy Group LLC. Based in Forest Hills, the company maintains a web-based platform for commercial and industrial energy customers to tap into rebates, tax credits and financing for energy-efficient projects. The platform also helps makers of such systems sell their products.
“It's a lot of standing at the home office and talking to the wall,” said Steve Moritz, president of AllFacilities Energy, describing some of the prep work for his presentation. At noon on the dot he will make a pitch for $2 million. The company also has an office in Philadelphia.
“The reason we're at the venture fair is that there are 40 other states that have energy funds or incentives, and we want to be able to expand nationally,” said Moritz.
The 3 Rivers Venture Fair, which is expected to attract about 600 people, also draws presenters from eastern Pennsylvania, Ohio and Michigan.
One of them is Graphene Frontiers LLC, a Philadelphia-based producer of graphene sheets, a highly conductive form of carbon that is one-atom thick.
“The 3 Rivers Venture Fair is sort of our coming out party,” said CEO Mike Patterson, whose company is partly funded by the National Science Foundation.
Patterson will seek $1.2 million at 11:05 a.m. The CEO, who has done “10 different pitches” in the last 18 months, wants to add equipment and two or three researchers.
“You can have the best technology and team in the world, but if you can't get your idea across to your funders, you're probably dead in the water,” said Patterson.
Thomas Olson is a staff writer for Trib Total Media. He can be reached at 412-320-7854 or firstname.lastname@example.org.