"There’s not enough funding in Vermont to help businesses get off the ground and grow" is a common refrain among startup and expanding businesses seeking investment capital to fuel their growth. But one unique Vermont event aims to teach entrepreneurs that, before they ask for money, they may want to first ask for advice.
On a Monday morning, the Green Mountain Harley-Davidson dealership in Essex Junction is closed, but the parking lot is crammed with motorcycles of every make. Inside, about four dozen investors, entrepreneurs and business leaders have come to get “pitched” by local entrepreneurs looking for money and advice.
Among today's pitchers, there’s Dick Vaughn, owner of Perky Planet; Jamie Northrup and Eric Smith, co-founders of PairedIQ; Chelsea Camarata, who founded Kayden Apparel; and Kerri Tracy, founder of Cubby Spaces.
This is the first of eight pitch sessions to be held across Vermont this week as part of a four-day event called “Road Pitch,” so-named because all the business experts on this trip also happen to be motorcycle riders. The entourage travels between venues on two wheels.
Now in its fifth year, most of the riders are regulars who've returned year after year. Some of the pitchers, too, come back for an encore — like Lex Osler. He co-founded QOR360 with his father, a company that makes and sells a new style of ergonomic chair.
“Last year I came to you with an idea, and this year I come to you with a business,” Osler opened in his presentation. “Our mission is to change the way the world sits, and I’m here to ask for $1 million to help us do that.”
Road Pitch founder Cairn Cross said businesses are encouraged to hone their pitches and try again the following year.
“One mistake that entrepreneurs make is thinking that they know everything,” Cross said. “And making a whole bunch of mistakes that if they had solicited some advice, they would have been steered away from that.”
Cross, who also co-founded FreshTracks Capital, a Vermont-focused venture capital firm, conceived of Road Pitch to help put fledgling entrepreneurs in touch with successful ones.
Unlike the reality-TV show Shark Tank, the vast majority of people pitching at Road Pitch don’t walk away with any financial commitments from the riders. A lot of these businesses, the riders say, aren’t ready for funding.
For example last year, rider and business consultant Eric Egeland reached out to Dominic Spillane about his pitch for a business called Theater Engine. It’s an online platform designed to help community theaters promote their shows and connect with audiences.
Egeland recalled what Spillane originally asked for in his pitch: “I think they just said a million 'cause it’s a nice round number, if I remember correctly.”
But really, Egeland said, Spillane hadn’t actually known what he needed. He worked with Spillane as a client, helping to focus and tighten Theater Engine’s business plan and financial projections.
“They can’t be like, ‘I don’t know that yet, I’ll figure that out.’ No, you need to nail your market. You need to nail it all down. It’s a painful, horrifying process for most entrepreneurs because they just want to — they just wanna do a Theater Engine!” Egeland laughed.
“They want to have fun," he added. "And so we come in and go, ‘Nope! Gotta nail all this down.’”
Freshly armed with answers to questions Spillane hadn’t known to ask, he soon realized: He doesn’t even need capital investment in order to grow. He can “bootstrap it” without selling equity in his creation, Egeland said.
This is one example of why Cross, the Road Pitch organizer, believes it’s crucial for entrepreneurs to solicit a variety of opinions as they hone their business ideas. But this can be challenging in a rural state like Vermont, he said, where so few people have experience with companies that have scaled up.
One such rarity is Alan Newman, who founded Magic Hat Brewing Company and the cleaning products producer Seventh Generation. Last winter, Newman raised $600,000 in private equity funding to help a husband-and-wife team grow their business after they presented at Road Pitch two years before.
Cross pointed to that as Road Pitch’s most glowing achievement to date: “That is the story that really becomes why something like this can be successful.”
It’s hard-earned success, though. Cross’ own venture capital firm has yet to invest in any of the businesses that have presented in four years of his organizing Road Pitch on his firm’s behalf.
“Sooner or later, we have to fund a company in order to make it more palatable ... to our firm,” Cross said.
In the meantime, he feels good about the connections and learning Road Pitch is facilitating. And he and the other riders are having a lot of fun doing it.
Disclosure: VPR board member Charlie Kireker is a co-founder of FreshTracks Capital, and QOR360 is a VPR underwriter.