It was the first pitching session of D.C. Entrepreneurship Week, a time for entrepreneurs to present their new companies to investors in hopes of getting growth money. Venture capitalist Jonathon Perrelli was looking for CEOs whose startups are likely to be successful. So naturally, he asked them about their failures.
“Failure is good, because it means they’ll probably never make the same mistake again,” Perrelli said Monday before he took his seat at the center of a crowded boardroom in the Microsoft building on K Street NW in Washington. Perrelli is founder of Fortify.VC, a Virginia investment company, and said he’s seen his fair share of failures as the former head of multiple startups. “We look for failure in the history of an entrepreneur. It’s a badge of honor.”
Unlike Silicon Valley types, however, Washingtonians don’t like to admit defeat, Perrelli said. Which might have been why the founder of a children’s audio book app was slightly taken aback after he gave his pitch. Perrelli’s first question to him was, “How have you failed?”
“Wow, this is a really personal question,” said William Weil, whose company is called Tales2Go. He then told the story of how getting rejected from Harvard Business School gave him the inspiration to move to Los Angeles and work in entertainment.
“What that time showed me was that when you face adversity, you have to take risks,” Weil said. “Business is about making bets, and if it doesn’t work, you move on.” (Weil was later accepted to and graduated from Harvard Business.)
This was one of several pitching sessions that will be held during Entrepreneurship Week, a five-day conference that brings together entrepreneurs and investors to swap business cards, war stories and life lessons. For this session, five entrepreneurs like Weil had 15 minutes to get Perrelli to believe in their fledgling products — “like speed-dating,” said Eric Bell, one of the pitchers.
The competition is fierce: Fortify said they saw some 700 firms pitch in the past six months. Of those, they most likely funded five to 10 , said Ben Wan, a Fortify adviser. Most of today’s startup ideas are Web-based, with a good dose of social media and software thrown in.
Jim Kovarik was general manager of AOL Travel before he founded CarTripper.com, a Web site and app that aims to help users plan long trips. It factors in the price of gas in various states using a so-called “Galculator.” Perrelli asked Kovarik how he planned to make it profitable (search engines and partnerships with other travel sites, mainly). Then he gave Kovarik just two words of advice: “Trademark ‘Galculator.’”
Kovarik was one of the most experienced of the bunch, Wan said, but youth and energy count for nearly as much in the startup world.
Wan was impressed by Zuhairah Scott Washington, another Harvard Business grad and founder of Kahnoodle, a mobile game that will allow couples to rack up virtual points for performing acts of kindness toward one another.
“She had great energy and a good eye for small details,” he said. “You’ll want that in a CEO.”
Perrelli was also wowed, saying the game would help lazy husbands keep the romantic spark alive. “I love it, and your mojo is en fuego,” he told Washington.
According to Wan, it’s ultimately not the product they’re investing in, it’s the person. The tech world evolves so rapidly that entrepreneurs often have to “pivot,” or change strategies, long before their products become well-established, so it’s important that a CEO be flexible. Self-deprecating doesn’t hurt either, Wan said.
The last presenter was Eric Bell, a 28-year-old from Little Rock whose product is a personal finance Web site for young people.
“First of all, I didn’t go to Harvard,” Bell said. “I’m a redneck from Arkansas.”
Bell worked in private banking at Citigroup before he founded YoBucko, which gives users a “financial checkup” and provides them with a road map to grow their wealth.
Bell said he was nervous during his pitch — he hadn’t expected the other presenters to be so strong — but that overall he thought he did well. He invested his life savings in YoBucko, but even if he doesn’t get funding from Fortify, Bell said he would be happy just to get some advice from Perrelli and his team.
“They understand the pain and the potential of the startup life,” Bell said. “I feel like I could learn a lot from them. I just want a second date.”