RealTime IT News

Entrepreneurs Show Tech Still Alive and Well

While it's difficult to ignore the overwhelming number of news reports showing the tech sector slowing down, a crowd of about 250 investors looking to fund 21 tech companies at Thursday's WSA Investment Forum, demonstrated without a shadow of a doubt that the tech industry is still alive and well.

"With an industry as large as we have here, with over $30 billion in annual sales, when you have some companies that are experiencing lower revenue forecasts or consolidating information, you may end up thinking that everything's falling. In fact something like (the investment forum) indicates that it's not," said Kathy Wilcox, WSA President and CEO. "This is a phenomenal turnout... the attendance today implies that (the tech sector) is still very strong."

Another encouraging fact from Thursday's event was the number of applicants. The 121 companies vying for the 21 spots to present at this year's event represented the most applicants in the event's eight-year history.

While the forum demonstrated the prevalence of the Northwest's entrepreneurial and venture communities, Thursday's event also presented a different environment than years past.

Bo Wandell, president of Satsop-based SafeHarbor, presented last year, and after receiving 3rd round funding, decided to return this year to try to secure his company's next round.

According to Wandell, there are some significant changes in the content of the presentations this year.

"There's a change in what investors are looking for. Last year, what they were looking for was what I called GBF, or get big fast. This year, they're looking for GPF, or get profitable fast," said Wandell. "What investors are looking for is much more oriented towards profitability, reasonable or paced growth, and being able to remain successful in what is really quite a challenging market right now."

Bill Miller, principle at Kirkland-based OVP Venture Partners, agrees that the business environment has changed the focus of this year's pitches.

"We're seeing 40-plus year-old CEOs instead of 24 year-old CEOs," joked Miller. "You're also seeing companies that are focused on revenues and customers versus market sizes and customer counts."

Another topic missing from this year's presentations was any talk of liquidity.

"No one (at this year's event) has said that they are going to have a liquidity event in a short period of time," said Wilcox. "They are looking at it for the long haul. They are looking at it as a technology business that they are going to build."

Alfred Berkeley, Vice Chair of the NASDAQ board of directors, who was on hand to deliver the Keynote, was not too concerned by this trend.

"These companies are going to have to get funded for the right reason, which is not to pop out an IPO, but to build a real business," said Berkeley. "I think this is extremely healthy."

In addition to necessitating changes in companies' pitches, the tightening economic conditions in the tech sector have also raised the stakes for the companies this year.

"You're seeing entrepreneurs that are also much more nervous," said Miller. "Versus just thinking about how they're going to be the next Bill Gates, these guys are looking at survival and just trying to get through that first two years of the company."