Gwin Scott

The Filtering of Requests

In what I do each and every day helping high growth startups and early stage companies on a variety of fronts, the number of requests that come are frequent and constant. Our main focus is to work with and analyze our 27-28 portfolio companies in an effort to help them accomplish their goals ie build revenues and become profitable.. The is just a fraction of the focus, as it encompasses a lot more than those areas. It is really imperative too to have a working pipeline and funnel of those who are interested in what we do--in hopes that they will one day enter our program at EmergeMemphis.

Lately, Ive been amazed by the # of requests with startups and those early stage entities looking for funding. Relationship capital is important for these entrepreneurs, esp here in Memphis...and there is a direct correlation to who you know and how that translates into your success in raising equity. Im mainly talking about angel investors solely and in some instances vc's. I believe people feel like we have the answer to all of their problems-- where Id rather lead them in the right direction (if they meet a whole host of guidelines and qualifications)...and let them find their own answers and let the strengths of their own merits get the right results.

We are more than happy to help facilitate the right requests if others are willing to help themselves and prove that they are worthy of being helped. Why do I need to spend my time working with someone who doesnt listen or is willing to be taught and isnt putting forth the right amount of effort. More importantly, what happens if one doesnt really know someone--and they ask your help to raise money or set them up with a strategic partner. Why risk it? (If i followed up on every request, im pretty sure my credibility would be tarnished with those potential recipients....or victims). The onus should be on the requestor to get a plan and develop the right relationships and trust where one is totally confident and willing to help. Anything done too soon or prematurely, Id really have to question that person's judgment--which I have done a lot lately, as some expectations are too high and unrealistic.

It should be about setting forth a methodical process which takes time, so my advice to those 'askers' if you want to be helped and coached is:

--to be patiently proactive        --to focus on getting to know the person you are asking help from

--to not be overly demanding    --to manage expectations

--to be realistic on how you differentiate yourself and your product from the market--dont BS

--to follow up on what you say you are going to do in a timely manner

--to understand the environment/strengths and weaknesses of where you live

I look forward to hearing more and in getting some of your perspectives on this.

Slideshare

i just came across a cool site that is an aggregated search for ppt's, slideshare www.slideshare.com it is very informational and great that you can search by topic on whatever subject you are looking for. the best examples are where the full audio is embedded vs just the ppt itself. now, no more shows!  maybe a potential youtube acquisition.

Remitdata deal

I couldnt be more jazzed about the news this am about one of our portfolio companies here at EmergeMemphis. Remitdata www.remitdata.com has received a $5 million equity investment from 2 highly reputable firms in the southeast by SSM Partners www.ssmventures.com  in Memphis and Noro-Moseley www.noro-moseley.com out of Atlanta. Here is an excerpt of the deal:

MEMPHIS, TN – RemitDATA, Inc., today announced that it has received a $5 million minority equity investment from Noro-Moseley Partners and SSM Partners.  RemitDATA is a leading provider of web-based productivity solutions for the outpatient healthcare marketplace.  RemitDATA’s tools enable physicians to identify and minimize payer reimbursement problems and cut the costs of collections.  Due to the nature of its tools, RemitDATA is a leading aggregator of specialty-specific claims data exceeding $15 Billion per year in Medicare

Bently and his team have really epitomized what being an entrepreneur is all about and in the course of their 7 yrs have been very patient with their growth. Something that not everyone has the discipline and ability to see through. This is a perfect example of when opportunity and timing come together. They continue to establish themselves in this health care IT area within the revenue cycle management sector.

I cant help to remember when they were trying to figure out what to do, whether it be continued organic growth, angel, or vc money. The process really took 2 yrs to solidify, after numerous meetings and debating.  Questions/thoughts like do i really want to give up equity in the company i founded, we can do it on our own for a while longer, ill have people to report to, are they like me and will it be collegial, why do we need that much money, will they micromanage our direction---just to name a few.

But today's result couldnt be much smoother and now a new chapter is beginning for them and they are scaling up already spending as prioritized by new hires and IT/infrastructure purchases. casey(ssm) and allen (noro) are both solid partners and i look forward to seeing them over here more during their quarterly meetings.

This story is also about a Memphis firm---comprised of mainly Memphis investors---investing in a Memphis company, as well as an Atlanta firm/money coming to Memphis and recognizing the fact that there are worthwhile opportunities here to invest, as the last few yrs these investments have been made in other cities. Hopefully others will come and the bar has been raised.

One Month App

Last week one of EmergeMemphis' companies, www.clearfunction.com,  launched a cool new app (at this stage) called One Month App (http://onemonthapp.com/) which is a free and simple cash flow management tool for small businesses. The premise behind this is to actually launch in one month in a fast and extremely focused manner from concept to design to programming to deployment. The lead design and developers are aaron boeving and stephen rainey and in the course of the work they do for customers, they experienced and witnessed firsthand issues with financials and cash flow associated with project mgmt which is the motivation behind this project.

Their rationale is such:  "The app is going to be a free and simple cash flow management tool for small businesses. It's main purpose will be to simply track the cash flow related to your projects and clients (integrating with the Basecamp project management application's API). We think that cash flow should be quick and easy and often times has nothing to do with accounting, which it is often associated with. When you put on the cash flow hat, you're thinking about the overall health of your business, but also making sure that you've got enough in the bank to pay yourself and employees. It's more about business health, than detailed numbers, charts or graphs."

One of CF's mantra's is push themselves to do more than is humanly possible, so with the world watching we will see what they are able to pull off, as we are hoping for the best...with a target completion deadline of Oct 24th!!

Entrepreneurial

Finally, my entree' into this brave new (old) world. Being part of a business and technology incubator/accelerator, emergememphis (located in memphis), we are constantly looking at expanding our reach and footprint to a 'qualified community' with new companies, mentors, and angel investing...predominantly in this region. we are a non-profit play, so dont actively invest in our 27 members companies that comprise our portfolio....which is a mixture of web and application developers, consumer products, software developers, internet mktg, and hosting/msft exchange (companies). education and relationship development is part of our daily cause and we are intrigued to hear about what others are doing out there.

One of the areas we are placing renewed interest in, involves the creation of an angel network. we are going through the due diligence process of investor analysis which todate has been more on a case by case/stealth basis, depending on the company/industry in need. pairing the right investor with the right company is vital bc angel investing doesnt always work well. not to be overly cautious, but our preference is to have an active mentoring focused angel who will roll up his/her sleeves to make sure their investment is being watched and naturally more greatly influenced. experience within industry and business disciplines are also important to match up, as having a doctor discuss a sales strategy with a newco wont work. ok, so im stating the already known. boulder, austin, silicon valley, boston do it best.