By Benét J. Wilson, DJTF co-chair, Online Managing Editor-Business Aviation, Aviation Week Group
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Last week, I interviewed Joe Rubin of FundingPost.com, which brings together entrepreneurs looking for funding and investors looking for projects to fund. He was kind enough to put me in touch with Terry Hicks, vice president of the investment group at Ben Franklin Technology Partners of Pennsylvania and a founder of the Minority Angel Investor Network.
While Hicks’ organizations focus on funding technology products and processes, including but not limited to hardware and software, drugs and medical devices, alternative energy and clean technology, I felt his general advice could still be very useful for journalists looking to fund their entrepreneurial projects.
Opportunities come to Ben Franklin from different sources, says Hicks. “Some come directly from our website, where we have a template which companies may use to submit their ideas,” he says. “But another way is through referrals. Frankly, that’s the best way to do it, submitting it through a trusted partner or someone we know, like an attorney or a broker. These are people that we’ve learned to trust because they have brought us good opportunities in the past.”
Ben Franklin holds informational seminars during the year on what we look for and our processes, says Hicks. “Folks who attend our seminars are advised on how to submit an application and what to expect during the review process,” he explains.
Once a proposal comes in, it undergoes a preliminary review by a member of our team who has the experience and background relevant to the technology product or process being proposed. Unlike many other investors, the process after that is very structured in terms of pre-determined dates and times for review sessions to consider the merits of the technology and business opportunity. In additional to our expert staff reviewers “…we bring in a combination of volunteer and paid reviewers to assess the technology and business aspects of the opportunity. For example, if the opportunity is the development of a new medical device we will bring in a reviewer, typically at the PhD level, who will evaluate the company’s product from a technology standpoint,” Hicks explains. “If the technology is viewed as solid, we assign a due diligence reviewer, who visits the company and evaluates such things as the management team, the market, the company’s business model and its sales and distribution plans.”
“We also make background calls to validate such information as market size, management experience and assumptions supporting the financial projections,” says Hicks. “Whether or not we end up investing in a deal, we offer feedback to entrepreneurs on the technology and the business merits of their deal. As part of the final phase of our review the company is asked to pitch a committee comprised of our staff investment professionals as well as representatives of the venture capital and angel investor communities.”
“The success of the pitch, coupled with all the other information collected during our review process factor into the investment decision”, says Hicks. “It’s a very competitive process and my responsibility is to make sure, at end of the day, that we have a balanced portfolio that performs well, despite the early stage at which we invest. From the day an application is submitted for investment until the day of an approval is typically 12 to 15 weeks, which isn’t a long time when it comes to investment decisions”, he adds.
When he is not working at Ben Franklin, Hicks is also the founder of the Minority Angel Investor Network. “Angel investors are private individuals who invest their own money in deals,” he explains. “My group does technology deals, which is a natural extension of what I do during the day.”