The Washington Post

For start-ups in need of funds, conferences offer a tricky opportunity to navigate

Klaggle CEO Stephen Candelmo, left, greets angel investor Richard Litofsky at TechBuzz during Capital Connection, an annual conference hosted by the Mid-Atlantic Venture Association. (Jeffrey MacMillan/Capital Business)

Stephen Candelmo finds a quiet nook at the JW Marriott Hotel where a navy blue couch serves as his invisible audience. He paces nervously and gestures emphatically as he reads aloud the pitch he’ll make to investors in less than 30 minutes.

The delivery is near perfect after he polished the speech until 3 a.m. the night before. His company, Klaggle, which aggregates online product reviews, is one of 26 start-ups chosen to give a four-minute presentation at TechBuzz.

“The challenge is how do you make a significant impact in four minutes without getting too fancy with animations or anything else,” he said.

The event is the first of its kind at Capital Connection, an annual conference hosted by the Mid-Atlantic Venture Association. The organization aims to appeal to the region’s more active community of angel investors and the firms they fund.

The other companies vying for attention hail from a breadth of industries. Social media plays, data analytics firms and e-commerce start-ups will share the same stage and pool of financiers.

“It’s a competition, right? We’re not only trying to get mindshare about what we’re doing with Klaggle but also rise above all the start-ups here. And you never know what will resonate with an investor,” Candelmo said.

Klaggle launched in 2009 to provide small online retail outlets with a way to aggregate online product reviews that users often turn to Amazon or other big Web sites to find. The company signed its first customer in December, but needs $750,000 from investors to grow.

When it came his turn to present, Candelmo’s delivery at the podium was free of any major flubs, technical glitches or other uh-oh moments. But as he described before the pitch, the real measure of success will be whether he gets “a second date” with any investors.

The executives at Klaggle admit the likelihood of connecting with the right investor is a bit of a “Goldilocks and the Three Bears” scenario. Some just don’t invest in their sector. Some invest in more mature companies. It’s tough to find one that fits just right.

But in a planned networking session after the pitches, there appears to be some traction. Richard Litofsky, head of Rockville-based cyScape and an angel investor, had met Candelmo at a dinner party six months prior. He sees promise in the company.

“It helps level the playing field for small retailers in that space to be competitive,” Litofsky said. “I think the market has spoken volumes in terms of how important reviews are.”

One investor who focuses on later-stage deals suggests he may know a guy. Another conversation yields a business card and the casual “drop me an e-mail” refrain. That may mean more than you think, Candelmo said, because investors rarely show a tremendous amount of interest in the presence of their peers.

“It’s a dance that we’re all doing, but you have to know the steps,” Candelmo said.

Indeed, it’s a dance that Haidee Calore, senior vice president of marketing and development, finds difficult to enter. She huddles with Candelmo and co-founder Brian Vosburgh, visually sweeping the lobby for pockets of investors.

Calore points out an entrepreneur doing what she calls “the hover,” lurking somewhat awkwardly near a group of people waiting for the right moment to interrupt the conversation.

Candelmo stays at the conference while the other executives return to work, but his attention is divided for the rest of the day between the agenda and the stream of e-mails on his iPhone.

A round table with other chief executives generates a few unexpected business leads, but generally it’s the events where he can shake hands and rub elbows that take top priority.

“It’s important to be targeted because you can only meet so many people,” he said. “One of the great traps when you’re focusing on fundraising is you take your eye off the ball in terms of the business.”

But as the afternoon grows late, Candelmo sinks into the sofa where hours earlier he had practiced his speech. Visibly exhausted and with more work that needs to be done, he departs before the cocktail party to pick up his daughter.

“Everything’s about balance,” he said. “It has to be.”

Steven Overly is a national reporter covering federal technology and energy policy with a focus on Capitol Hill. He previously covered the business of technology, biotechnology and venture capital.



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