Start-up executives prepare to lure investors on eve of Seattle forum

Lone Wolf Technologies Chief Executive Chris Noble
stands at the podium, his hands touching only at the
fingertips. He addresses, rather confidently, a roomful
of empty chairs.

By Monica Soto
Seattle Times technology reporter

"We install networks at a fraction of the cost in less
time," he says, slipping a laser pointer out of his
pocket to illuminate the words "1-2 weeks" on a
PowerPoint slide. Two men in the sparse hotel
ballroom make eye contact and nod in agreement.
The laser pointer, apparently, was a nice touch.

This is dress rehearsal for the third annual Early Stage
Investment Forum, which starts today in Seattle and
gives 10 companies a chance to woo investors
interested in providing financing for their enterprises.
The rehearsal is a last chance for the start-ups to
receive tips on how to perfect 10-minute pitches they
hope will lead to funding, especially in an economic
environment in which it’s tougher to win backing.

Were it only about technology, the winners — the
ones who win financing — would be predetermined.
But the big moment has as much to do with a good
technology and a sound business plan as it does with
oomph.

"It’s a lot like putting on a play," says Keith Cochran,
an event coach and partner with the Seattle office of law firm Orrick, Herrington & Sutcliffe. "You
have to suspend audience disbelief that you’re just two guys in a garage. How do you create the
image to investors that you’re the world’s greatest company at something? How do you buttress that
premise?"

For the presenting companies, the rehearsal is the culmination of three coaching sessions, where
they were judged on everything from how they stand to whether their speech makes sense.

The most common mistakes, coaches say, are too much technological detail, wordy PowerPoint
presentations and nervous demeanors. Any one element can distract from the presentation and
leave a start-up empty-handed.

For this reason, the coaches can be tough.

"They were brutally honest with us," says John Richards, co-chairman of Bellevue-based Stardust
Technologies, which embeds anti-piracy technology into anything from sweaters to backstage
concert passes. "They told us to switch speakers."

After Lone Wolf’s Noble makes his presentation, the coaches summon him back to a table.

Attorney Neal Suggs, another coach, mentions that a particular slide is blurry. He also suggests
Noble omit a part of the speech in which he tells potential investors they’re getting in at a good
price.

"I’m very uncomfortable with that," Suggs tells Noble. "Stick to: ‘You’re following smart money.’
Let’s not get squirrelly with that."

Noble nods in agreement. "I’ll just say ‘following smart money.’ "

Noble says later that the hardest part is choosing what to say.

"The toughest thing," he says, "is getting a one-hour presentation down to 10 minutes. You have to
get the salient message across."

Noble, for instance, didn’t get into the background of the company, which was founded in the late
1980s. The company originally developed technology that helped amphitheater equipment, such
as soundboards, amplifiers and equalizers, talk to one another.

It received $5 million from Paul Allen’s Vulcan Ventures in 1993. But after receiving $18 million in
funding in all, the company shut down in 1997, he says.

Noble says the original founders used the same technology to create software that helps manage
and control devices or software connected to an Internet network. The start-up is targeting network
engineers at big companies.

One coach suggests Noble play up the Vulcan Ventures tie, but he’s not sure where to place it.

"If I mention it in the first slide," he says. "They think ‘restart.’ "

Richards of Stardust Technologies says he is ready for the presentation, but he plans to change a
couple of things. One coach told him to de-emphasize the part about raising $5 million in Japan.
During the run-through, he tells the audience the company could have raised four times that
amount. One of the coaches referred to that comment as "puffery." He also has to pace himself; no
rushing at the end.

Richards says his confidence comes from the company’s technology.

"My philosophy is this: You have to learn sizzle, but it helps when there’s steak," he says. "We think
we have steak."

Monica Soto can be reached at 206- 515-5632 or [email protected].

Copyright © 2002 The Seattle Times Company

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