It will take a lot more than a sparkling speech and glowing presentation to convince serial entrepreneur and angel investor Mario Casabona to invest his cash into a new or emerging business. “As much as a small business owner thinks it’s all about facts and figures and the slickest PowerPoint presentation imaginable, the truth is it comes right down to credibility,” he says. “It’s a credibility born of deep knowledge; a willingness to listen and learn.”
Casabona will be a speaker and panelist at the Princeton Mercer Regional Chamber of Commerce on Thursday, August 1, at the Princeton Innovation Center, 303A College Road, Princeton. The event will spotlight the newly formed Innovation & Entrepreneurship Council and highlight the organization’s first “Princeton Pitchstop” contest. The cost is $35. For more information, visit www.princetonmercerchamber.org or call 609-924-1776.
Other panelists include: Sean O’Sullivan, manager and general partner at SOSV; Kelly Ford, partner at Edison Partners; and Kathleen Coviello, vice president technology and life sciences investments at the NJEDA. The Innovation & Entrepreneurship Council was formed earlier this year to give potential and emerging small business-owners a platform to pitch cogent and palpable business ideas and strategies to industry experts, among other things.
According to data released earlier this year by Small Business Trends, only 40 percent of small businesses are profitable and the failure rate increases each year. In most cases, the lack of cash flow led to the demise of the businesses. Business owners are relying on funds from investors in order to survive and thrive. Efforts by organizations like the Innovation and Entrepreneurship Council give entrepreneurs an opportunity to deliver a business pitch and proposal to investors and ultimately take their business to the next phase.
As a key player providing a lifeline of cash to potential and current small business owners, Casabona has been both on the outer fringes and at the forefront of business enterprises for decades. After many years of working as an electrical engineer for IT giants such as Honeywell and the Raytheon Corp. Casabona started his own company Electro-Radiation, Inc. in Fairfield in 1982. That company became a multimillion dollar enterprise, which he sold to Honeywell International Aerospace division in 2004.
Casabona eventually founded the eponymous Casabona Ventures — a micro venture capital firm with a niche focus on technology and/or Internet based companies — in Kinnelon in 2006. The company provides new or emerging firms with financial support, business strategies and guidance. To that end, in 2012 he created TechLaunch Business Accelerator — New Jersey’s first technology accelerator.
A native of Sicily, Casabona was brought to the U.S., when he was just five. Casabona says his mother, father and extended family members were all hard workers who instilled a simple, yet pervasive notion that hard work and perseverance are the key elements to success and opportunity in America. He credits this philosophy as the impetus to becoming a serial entrepreneur of sorts.
“Through their blue-collar ethic, I was raised to believe that through hard work and perseverance and with the support of a strong network of family and friends, the American Dream is yours for the taking,” he says. Casabona, who holds a bachelor of science degree in electrical engineering from Fairleigh Dickinson, is careful to describe himself as an “angel investor” and not a “venture capitalist” — a distinction many people, including small business owners, frequently miss when seeking funding initiatives for their business. “I invest my own capital in early stage tech companies,” Casabona says. “A venture capitalist will most likely invest and manage other people’s money.”
Show me the business pitch and I’ll show you the money: Many small business seek outside funding from traditional sources such as banks, credit unions, and personal funds. While these sources may offer some advantages, a well crafted business plan, cogent pitch, credibility on all levels, and clear and achievable long term goals will send a business well on its way to securing funding from an angel investor.
“My personal recommendation to any business owner is to set your sights on raising capital from active angel investors,” Casabona says. He says the process of securing those funds from an eager investor starts with delivering a clever and savvy 60 second elevator pitch. “The business description in your executive summary is a great start,” he says. “Avoid vague descriptions such as ‘we are the next Uber or Google.’” Instead Casabona says a clever niche statement like, “We are like Amazon, but focused on pet food” is likely to pique an investor’s interest. “A well crafted elevator pitch can open doors or lead to referrals or, when done badly, can kill the opportunity,” he says.
Another suggestion is to create a pitch specific to investors. For example, many angel investors prefer a pitch deck in lieu of a formal business plan document — especially during the initial stages of the funding process request. “Your pitch deck can be used as a stand-alone description of your business, but it will mainly be used to tell your story to potential investors and contain some of the information contained in your formal business plan,” he says. Some strategic markers all early stage investors look for in an entrepreneur’s funding pitch include:
• A founding team with the skills and commitment to execute the business-owners.
• Personal investment of at least six to 12 months of sweat equity
• A working and demonstrated minimum viable product.
• A prior “raise” typically from friends and family, former or current angel investor.
• Prior year revenue that shows some traction and a thought out customer pipeline.
• Intellectual property or trade secret that would protect the company.
• A business model that has an exit strategy.
• An investor pitch deck ready for prime time.
• Sufficient capital “raise” that will last 12 to 18 months.
Lastly Casabona says once an entrepreneur successfully has navigated the entire funding request process — from the elevator pitch to cash — the real work and fun begins. “Spend the money wisely — as if it were yours and as though you might not get another dollar for a while,” he says. “Learn to enjoy the journey for the journey’s sake and not for the pot of gold at the end of the rainbow.”