Corrections or additions?
This article by Kathleen McGinn Spring was prepared for the
February 12, 2003 edition of U.S. 1 Newspaper. All rights reserved.
Convincing an Angel To Keep the Faith
Susan Pirog is an angel who works at an angel-funded
start-up. As such, Pirog — sales and marketing director for the
Forrestal Village-based Swift Response — has a few things to say
about how to attract angel backers.
On Wednesday, February 19, at 4 p.m. Pirog joins a panel discussing
“How to Fund Your Company.” The event is sponsored by the
New Jersey Technology Council and is held at the offices of
PriceWaterhouseCoopers
at 400 Campus Drive in Florham Park. The moderator for the event is
Susan Roos of PriceWaterhouseCoopers. Other panelists include
Galina Datskovsky of MDY Advanced Technologies, Elizabeth
Harper of Silicon Valley Bank, and Kef Kasin of Early Stage
Enterprises.
Swift Response, for which Pirog has worked for almost two years, was
founded in 1999. The company’s offices are at 116 Village Boulevard,
but the bulk of its employees are in India. The company’s job is
answering
all of those E-mails — 100,000 a month are not unusual — that
companies receive. For now, nearly 80 percent of responses are sent
back via E-mail, and a small percentage are handled by phone, but
a growing part of Swift Response’s business is live Internet chat,
through which a customer’s questions are answered online by a customer
service representative.
Chandra Venkataramani, the company’s founder, a graduate of Louisiana
Tech who holds an MBA from New York University, started his company,
“during the boom,” says Pirog. He relied on angel investors
to fund his company.
Operations were put in place overseas as a cost saving measure.
“It
costs $4 to $5 to answer an E-mail in the United States,” says
Pirog. “In India, it’s $1.” With corporations receiving
50,000,
60,000, 100,000 or more E-mails a month, that is no trifling spread.
The reason it is so much less expensive to site customer service
centers
in India, of course, is the cost of labor. The quality of labor is
high, too. India offers a well-educated, polite, English-speaking
workforce, which sees customer service as a high-end career, says
Pirog.
Pirog, who has not yet been to India, is a graduate of Douglass
College
(Class of 1977), where she studied mathematics. She holds an MBA from
William and Mary. In the heyday of the Internet boom, circa 1998,
she became an angel investor, putting money into one venture that
is booming, and one that went under.
The winner is Red Oak Software, a Mountain Lakes company whose
software
takes legacy information from mainframes and puts it onto the
Internet.
“This is a big issue with the insurance and telecom
industries,”
says Pirog. The company is profitable.
Less successful was TV Objects, a company founded by Andy Goren, whom
Pirog met when the two worked together at Logic Works. The start-up
was built around the development of computer language conversion
tools.
“There was some interest,” says Pirog. But not enough to keep
the company afloat.
Even with a respectable 1 for 2 angel investing record, Pirog has
had enough of the game, at least for now. She says she feels much
more comfortable with her current strategy of investing with Jim
Gunton’s
NJTC Venture Fund. Still, her experience has given her a window into
the world of angel investing — and how start-ups can best
capitalize
on it.
Get out there. “It’s a very closed world,” Pirogsays of the angel network. She made both of her investments withpeopleshe knew. Those hoping for angel money need to cultivate contactswith likely early-stage investors.Stay in contact. Making new friends is far more difficultthan keeping in touch with colleagues with whom you are friendly.You never who might have an interest in angel investing two, ten,or twelve years down the road.Get some experience. Pirog says she has gotten very goodat telling which entrepreneurs will make it, which will fail, andwhich probably will make it — but not yet. Not without a coupleof interim failures. The difference, she says, often comes down toexperience. The days when a bright youngster with a new Wharton MBAcould attract angel capital are, in most cases, over.Line up capital. Money can attract more money. Showingan angel that you have access to other sources of capital can bereassuring.Sharpen the business plan. Be prepared to make a soundcase for the market for your technology — and how you plan toreach it.Praying could not hurt either. There are an awful lot of angelswith singed wings. Getting one to commit again is a mixture ofexperience,great technology, business savvy — and a bit of serendipity.Previous StoryNext StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
