Veteran Executives Add Seasoning to Venture Capital Market

Raj Sharma's eight-minute pitch for venture capital sounded like a plea from one of the younger, floppy-haired executives at last week's Capital Connection venture fair. His company is little more than a promise: no customers, just some new software and some lofty projections.

But Sharma, 6-foot-3 with huge hands and a rich baritone voice, had an edge over many of the other executives looking for funding at the region's premier venture capital networking event, where hundreds of investors come to find a next new thing. Sharma, after all, had done this all before. In fact, this was his third such pitch since 1998.

By my count, 14 of the 40 companies making so-called elevator pitches during the annual event were represented by chief executives like Sharma: veterans of the tech bubble and bust, former chief executives or founders of start-ups that received venture funding and are now trying to do it all again. Nearly all of the other 26 companies selected to audition by the Mid-Atlantic Venture Association have executives on their team with deep experience in tech start-ups. Only a handful were novices trying this without the safety net of seasoned team members.

That's one reason local VC investors, despite their frequent complaints about how hard it is to take a young tech company public, are as optimistic as they ever have been.

Serial entrepreneurs are nothing new. But in conversations at the event, venture capitalists repeatedly hit on the growth in executive experience at the presenting companies.

"The region is maturing," said Art Marks , a longtime early-stage venture investor in the region, now at Valhalla Partners in Vienna. "There's a good mix of companies and proven entrepreneurs" that wasn't there when he started in the business 22 years ago.

The many repeat entrepreneurs presenting, or just mingling, at the Mandarin Oriental hotel underscored how the region's business creation climate has ripened, even if on the surface the event was similar to the late 1990s, the glory days when venture capital and the dot-coms and telecoms they poured money into were ascendant. Among the familiar faces from that era who are still in the game, Proxicom founder Raul Fernandez gave a presentation about how he collected a board of directors for his current technology company. And CareerBuilder founder Rob McGovern gave a speech about hiring the right talent for a start-up.

Marks likened the venture community in Washington to sommeliers dealing with increasingly familiar wines. "You know that this particular Bordeaux is going to work, because it came from the right hill, had the right grape and the right season. It gives you confidence that you can buy it and it will work because you have experienced how it worked in the past."

Experienced executive talent is one thing that bigger VC markets, such as Silicon Valley or Boston, have in spades.

"Everyone knows that Silicon Valley firms get better valuations because of where they are," said Jonathan Wallace of Reston's WWC Capital , an investment banking and venture capital firm.

By valuation, Wallace refers to the crucial economic estimate of a start-up company's worth that determines how big a piece of the company a VC firm can take and at what price.

"The bench in the Valley is so big. Venture investors there can call upon any number of executives to take companies through each stage of their development and growth. I think we're now seeing that here."