43North judges take stock of Buffalo

Matt Glynn | The Buffalo News

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Tim Draper is a California-based billionaire, a venture capitalist who had never been to Buffalo before.

But he was front and center at Rich Products as a judge in the final qualifying round for the 43North business plan competition. He peppered presenters with questions and helped trim the field of contestants.

“I like the competition,” Draper said. “I think instead of filtering out the outliers, they’ve filtered in them.”

43North’s mission is to cultivate start-ups in Buffalo. And while the judges were here to pick the winners, 43North was hoping to win them over, as well.

Tim Draper is a California-based billionaire, a venture capitalist who had never been to Buffalo before.

But he was front and center at Rich Products as a judge in the final qualifying round for the 43North business plan competition. He peppered presenters with questions and helped trim the field of contestants.

“I like the competition,” Draper said. “I think instead of filtering out the outliers, they’ve filtered in them.”

43North’s mission is to cultivate start-ups in Buffalo. And while the judges were here to pick the winners, 43North was hoping to win them over, as well.

Nearly 40 judges – venture capitalists, angel investors and high-powered business leaders from around North America – came to town for the final two days of the competition. Many of them saw Buffalo for the first time, or the first time in a long time, and took those experiences home with them.

Draper’s mother grew up in Buffalo and told him about spending summers at Niagara-on-the-Lake, Ont. “I thought, ‘I’ve got to go to Buffalo, to tell her that I’ve been here,'” he said.

43North organizers drew upon local connections as well as their own professional networks to assemble the list of judges, said William Maggio, 43North’s board chairman.

“We’re trying to introduce prominent venture capitalists throughout North America to what happened here, to get them interested, to get them to start paying attention to the start-up scene in Buffalo,” Maggio said.

The idea was not only to give them a good impression of Buffalo, but to plant a seed for investment pitches they hear in the future.

“They see a lot of great ideas, but they may not necessarily be the right timing for them,” Maggio said. “So we’re trying to get them to refer these business plans and these start-ups to Buffalo, to say, ‘Look, we’re not ready for you, but you should go enter 43North because you have a shot at winning a million bucks.'”

Draper said he has traveled to different Rust Belt cities for business plan competitions. “I do this because in the Silicon Valley we get a bit of a group-think going, and I like to make sure that I’m seeing some things from other parts of the world, so that I have a sense of what interesting entrepreneurs are doing in different places.”

Judges interviewed said they were impressed with the caliber of ideas and presentations. 43North changed its approach this year, emphasizing the quality of the applicants over the quantity.

“When we get down to this list from what they started with, they’re smart people, going after real market opportunities with differentiating technology,” said Jim Orlando, of Omers Ventures in Toronto. “That’s table stakes. What it really comes down to among the high-caliber group is who can really execute on what they’re saying, who can get this thing to the finish line to build the next really good business. And that’s the key. Now it comes down to betting on the people who can execute.”

Orlando also came away with a better feel for Buffalo. “Being based in Toronto, I think this is an area I’m going to be spending more time looking at companies and seeing if we can foster a bit of a presence here.”

Another angel investor, Michael Dearden of Waterloo, Ont., evaluates companies each month as possible investments, so the judging came naturally to him. So what makes for a good pitch?

“The people,” Dearden said. “There’s a lot of good technology and ideas that never make it to market because the people don’t understand what’s required to do it. It’s the classic brilliant scientist who can’t hold a conversation with someone, or create a business plan, or they get so interested in their science that they just will never let it go.”

The judges who listened to the qualifying presentations on Wednesday took notes and were supportive when they asked questions. No reality TV-style confrontations here. But the judges pressed for specifics about the markets the entrants were targeting, their revenue projections, and how they expected to make a dent against competitors.

Madelaine D’Angelo had to face them as a presenter. Her company, Arthena, survived the cut from 15 to the final 10 when the judges’ scores were tabulated.

“I think the caliber of judges that they’ve brought this year is unparalleled,” D’Angelo said. “They brought Tim Draper – he is ‘the VC.’ It’s amazing to have face time in front of them and have them asking questions, because it also helps you understand what they’re thinking.”

[Related: 10 pitches for $1 million prize]

A different set of seven judges handled the duties at Shea’s on Thursday, the final day of the competition. They determined who won the money, including the $1 million top prize. The judges were part of the action, sitting on stage to listen to the final presentations, before heading offstage to deliberate.

Soraya Darabi, a Brooklyn resident and angel investor, said she was thrilled to be asked to be a judge. She loves helping founders of companies get off the ground and trying to make New York state a hub for entrepreneurship.

“It’s something that I just kind of fell into like a hobby at the beginning and now do around the clock because I love it,” Darabi said. “I like helping people solve logic puzzles, and that’s what entrepreneurship is. It’s really taking all the information you have and trying to solve a mystery.”

Darabi has a keen sense of what makes for a successful pitch.

“It never hurts to begin with a founder who has confidence in their idea,” she said. “It’s pretty easy to shake it out of a founder when they aren’t confident or fully confident. The next thing you look for is deep subject matter expertise: how many months or years has the founder been thinking about this problem? And what’s special about their unique solution to solve it?

“You look for a team almost immediately after that, because a great visionary founder can never survive without a team that is smarter than he or she,” Darabi said. “After that, you look for a strong, addressable market” that the company can grab a slice of.

While the leaders of 43North’s grand prize winner, Oncolinx, were surrounded by TV cameras, another of the judges, Erik Moore, watched the post-event party take shape onstage. His work was done.

“Having been in venture capital for six years, with my own fund, I’ve done a lot of these,” Moore said. “The caliber of companies I saw present here, it might have been the best I’ve ever seen in a competition like this. The team at 43North did a phenomenal job curating the competition.”