Conceived by a pair of local business consultants and the trio of founders at Royalty Exchange, the first-time event at CAM Raleigh is inspired by the popular televised pitch event, but with a mission critical to the growth of this region's startup community.
Their goal is to get people who've never invested in startup companies before to make their first deal. And live.
And if it works, they'll take the event on the road.
Co-founders Robert Williams and Antoine Ponton of CaWaSa Consulting don't think it will be too difficult to get people to invest on the spot. They've selected four companies to present, each with established businesses and intriguing plans for growth. There's the groundbreaking real estate crowd lending site GROUNDFLOOR, Gamil Design with its fast-selling Impress coffee press and to-go cup, an educational kids film company called Rusty Bucket and an analytics startup called Biddrocket focused on the events and entertainment business.
And they're targeting people for which $50,000 or $100,000 isn't so large a sum. The companies are each seeking between $500,00 and $1 million.Lawyers helped the Real Deal organizers be sure they complied with Securities and Exchange Commission regulations for soliciting accredited investors.
To round up the attendees, the team has invited 500 high-net worth individuals in the Triangle region—doctors, lawyers, politicians, restaurateurs, small business owners. As of Wednesday, 150 had registered to attend, and the men say many of those are not front he venture capital or investment banking community.
Through the website Gust, which matches investors with entrepreneurs, they've contacted another 30,000 investors around the world. A live telecast will give them the chance to invest.
Williams and Ponton are so dedicated to the concept because they know the problem—venture capital investments in this region aren't meeting the demand for funds. Williams knew it firsthand. A company he started in 2010 struggled to raise funds and ultimately folded.
"In Silicon Valley, money is a commodity," he says. "Here, it is precious."
But the men also were witness to the region's wealth, both old money and new coming from successful technology executives, politicians, lawyers and small business owners around town. Many had interest in angel investing but didn't know where to begin.
A fun, entertaining, non-stuffy event would be welcoming to all people, not just the investment banking and venture capital crowd. The organizers have designed a program that includes 10 minute pitches, breaks for mingling, eating, drinking and discussing, followed by 15 minutes of questions from the live audience and insights from a panel of local venture capitalists and entrepreneurs.
Williams calls the live investing piece the secret sauce. Accredited investors will make commitments during the event by logging into the Real Deal site using their mobile devices. Total funds raised will be announced at the close, and the companies will decide which investors to deal with or which funds they'd like to accept. The Real Deal takes no equity stake in the companies that present.
Ali Khalifa, founder of the Impress, is eager for the opportunity. He raised $131,130 in an October 2012 Kickstarter campaign, his first experience with crowdfunding. The campaign helped him turn a prototype into a product that's now sold in countries around the world.
Though he doesn't necessarily need additional money—the company is already profitable—he hopes tonight's event brings him strategic investors willing to help grow global sales, increase marketing and develop new products. Khalifa says he's got a pipeline of about 10 beverage-related ideas he'd like to explore.
"I just think that this group really touched a nerve for a lot of local entrepreneurs, that we're generating a lot of great ideas and interesting businesses and being very innovative," he says. "Yet, when it comes to funding these ideas, we all find ourselves going outside the area to get it done."
The men realize other cities' entrepreneurial communities have similar cash flow problems. Though they expect to host more Real Deal events in the Triangle, they also plan to take the concept to other cities. They envision a Real Deal Southeast tour, with stops from Washington D.C. to Austin.
But the focus today is to put on an entertaining and enlightening event that gets people outside the startup community excited about what's going on in it.
And perhaps by tomorrow, the four pitching startups might count some them as investors.