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


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


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


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.


costs $4 to $5 to answer an E-mail in the United States," says

Pirog. "In India, it’s $1." With corporations receiving


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


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, who has not yet been to India, is a graduate of Douglass


(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


takes legacy information from mainframes and puts it onto the


"This is a big issue with the insurance and telecom


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


"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


NJTC Venture Fund. Still, her experience has given her a window into

the world of angel investing — and how start-ups can best


on it.

Get out there. "It’s a very closed world," Pirog

says of the angel network. She made both of her investments with


she knew. Those hoping for angel money need to cultivate contacts

with likely early-stage investors.

Stay in contact. Making new friends is far more difficult

than 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 good

at telling which entrepreneurs will make it, which will fail, and

which probably will make it — but not yet. Not without a couple

of interim failures. The difference, she says, often comes down to

experience. The days when a bright youngster with a new Wharton MBA

could attract angel capital are, in most cases, over.

Line up capital. Money can attract more money. Showing

an angel that you have access to other sources of capital can be


Sharpen the business plan. Be prepared to make a sound

case for the market for your technology — and how you plan to

reach it.

Praying could not hurt either. There are an awful lot of angels

with singed wings. Getting one to commit again is a mixture of


great technology, business savvy — and a bit of serendipity.

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