Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: Business
Front Page 
World 
UK 
UK Politics 
Business 
Market Data 
Economy 
Companies 
E-Commerce 
Your Money 
Business Basics 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 
Sunday, 30 January, 2000, 17:49 GMT
The internet money game

Having the idea for a great internet venture is the easy part. Finding the money to launch the project is the tricky bit. BBC News Online's Tim Weber watched the frenzy of entrepreneurs trying to find investors.

You don't get a second chance to make a good first impression

Mark Simon
thechemistry.com
You've got two minutes to change your life and only one chance to make a good first impression. Are you ready?

Hmmm, maybe not. For starters: Do you know how to shake hands?

The boot camp

A room full of young - and a few older - entrepreneurs watches transfixed as Mark Simon, founder of thechemistry.com, demonstrates the right technique: A firm, not too long handshake, keeping good eye contact.

Next: Make your pitch.

You are in an elevator and have two minutes to convince the man who writes the big cheques that your business proposition is brilliant.

Mark Simon says: "Talk in bullet points."

  • Tell him who you are
  • Why people need your product or service
  • The successes you've had already
  • Establish credibility by proving market knowledge without talking jargon
  • 'Close the sale', tell him what you want from him

Mr Simon calls it a 30 minute boot camp, preparing entrepreneurs for an evening of networking. They will meet "VCs", venture capitalists with lots of money and the guts to put it into young and risky companies.

Networking

Business success depends on finding the right partners. This has put networking at the heart of the fast-moving world of internet and technology companies.

Thechemistry.com is the event to make it happen.

The chemistry must be right to make a deal
The rules are simple. If your name badge has a red corner you are an entrepreneur and want money. Green stands for investors. Orange badges are for those who provide services to both.

Boot camp is over. Squeezed into a small but stylish room, some 150 entrepreneurs pounce on about 100 venture capitalists, and vice versa.

Most have learned their lesson. The hand shakes are firm, the eye contact excellent.

Nobody waits for an introduction. A quick check of the name badge, then the opening move.

"Hi, I'm George. Our company provides a unique service..."
"... and we have already signed up three major customers..."
"... second round of financing to support our launch in April ..."
"... and unlike others we have nine revenue streams..."

A great person with a good idea will do better than a good person with a great idea

Richard Anton
Amadeus Capital Partners
Some pitches work, others don't, but promises are made, calling cards exchanged.

The crowd is in constant motion. After five minutes of talk both sides get twitchy, move on to make the next pitch, find the next investment opportunity.

Great people with good ideas

So what does it take to be a successful entrepreneur?

Anton Richard of Amadeus Capital Partners says that during 1999 his firm was approached by up to 1,500 start-ups, but only 20 were actually being funded.

A company's biggest asset, he says, is not the business idea, but the people behind it: "A great person with a good idea will do better than a good person with a great idea."

If Anton Richard likes the idea, the entrepreneur, his or her enthusiasm and the business plan, the money tap may be turned on.

Half a million pounds here, two million there, the money flows in return for a stake in the company. A few years later the firm may float on the stock exchange, or is taken over by a bigger firm.

That is the moment the investors and entrepreneurs have waited for. It's pay day.

The chemistry

The idea to hold networking events comes from the United States, and the first to transfer the idea to London was First Tuesday, probably the best-known rival to thechemistry.com.

Simon: Wants an "industry for start-ups"
What started off as a meeting of a few friends has boomed into an organisation holding events in more than 30 cities around the world.

Digital People and Fast Track 100 are other contenders in the networking arena.

But Mark Simon believes that thechemistry.com has got the edge, even after just two networking events so far.

He promises to deliver quality, not quantity. The events - although free to attend - are by invitation only, and entrepreneurs are screened by his team. More importantly, there are just one-and-a-half entrepreneurs per venture capitalist, more financial power per business idea than at other such meetings.

Morgan Grenfell, Eventures, GE Capital, Goldman Sachs, Bear Stearns, Granville Investment Banking and Amadeus Capital Partners are among those trying to place their money.

Helping is profitable

While eager to help young companies, Mark Simon wants to make some money for himself.

  • The networking events are financed by sponsors such as TMP Worldwide, monster.co.uk and Arthur Andersen.
  • From March, thechemistry.com will earn money by charging for two-day training camps for entrepreneurs.
  • In spring thechemistry.com will launch an online, offline matchmaking service for investors and young companies, earning commission fees.
  • Entrepreneurs seeking advice will then be able to buy a starter pack online that will give them the business basics they need.
  • Once they have signed up, they will have access to a "clinic", where lawyers, accountants and other professionals give free advice. These advisers in turn hope that the firms will retain them once their initial struggles are over.
  • And finally thechemistry.com wants to risk some capital itself, piggy-backing on investments made by other VCs.
And indeed, Mark Simon has got the money to invest.

He is 36 years old and spent the last nine years building up Powermark, a computer hardware and software retailer. In 1999 he sold the company, which by then had an annual turnover of 26m.

Conquering the high-growth sector of e-commerce and internet finance is his next ambition.

To achieve this, Mark Simon follows his own advice. As the event winds down, he is at the exit and says good-bye to every participant, with a firm handshake and good eye contact.

Search BBC News Online

Advanced search options
Launch console
BBC RADIO NEWS
BBC ONE TV NEWS
WORLD NEWS SUMMARY
PROGRAMMES GUIDE
Internet links:


The BBC is not responsible for the content of external internet sites

Links to other Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories