Mario Casabona hopes to improve the quality of deal flow for investors, prepare entrepreneurs for the due diligence process and provide startups with access to investors.
TechLaunch, the New Jersey technology accelerator that operated from 2011 to 2014, has come out of hibernation to offer a new program, called “BullPen,” that is centered around the pitch.
The idea of BullPen is to improve the quality and quantity of deal flow for investors, while preparing entrepreneurs for the due diligence process.
BullPen will include a monthly series of pitch events in which three or four tech companies will present to a panel of investors and others, in front of an audience at a university location in New Jersey.
The program will primarily serve New Jersey, but will also cross the border into New York, where startups are also being incubated. Applications will be accepted on a rolling basis. The first applications will be accepted on November 15, and the first BullPen will be held in mid-January 2017.
“We are going to get the applications, screen them and ask the founders for their pitch deck,” said Mario Casabona, founder and CEO of TechLaunch, which is now based in Kinnelon. “Then we will match up the founders with the most relevant mentors from among our pool of 140, to provide a form of ‘flash mentoring’ in preparation for BullPen.” There is no economic obligation from either party before or after the BullPen session. “If it turns out that someone in the audience or on the panel likes the company and wants to invest or mentor them, that’s up to them.
“The intent is for the angel community, including myself, to have access to deal flow. Early-stage companies that have a minimum viable product, or are in the process of creating an MVP and are looking to grow or raise money, should apply. Maybe they need to perfect their investor pitch or maybe they need help with some strategy. We will help them,” he said.
“If I see a company that I think is worth pursuing, then I’ll bring it to my network of angel investors.”
So what constitutes a company worth pursuing? Casabona said that the startup would have to have a great team of cofounders who know their market and have hopefully worked together in the past. “If they haven’t worked together, they need to have known each other well. Beyond a minimum viable product, I look to see if the team is coachable, to gauge whether they’ll listen to the advice they are given,” he said. Finally, he wants teams that have previously raised some capital, even if it was just from friends and family.
Casabona said that one of the successful aspects of the “TechLaunch 1.0 experience” (as he calls it) was the weekly pitch practices for the teams. They pitched to a panel of investors and entrepreneurs, before an audience made up of the other members of the cohort. During the BullPen sessions, everyone will be welcomed as part of the audience.
What kinds of companies is TechLaunch looking for? Casabona, who started his professional life as an engineer, said that he is interested in the internet of things (IoT). “That’s the area of my expertise, and I feel comfortable there. I would like to focus more on IoT, but the reality is, if there is an e-commerce company out there or a mobile app that is knocking it out of the park,” they’ll be considered.
TechLaunch will be holding special quarterly meetings to enable the mentors and the founders who have been through the BullPen to get to know each other. These private events, called “TechLaunch Connect,” will be another way for mentors and investors to get to know new companies. Also, one of the outcomes of each monthly BullPen will be a vote for the audience favorite. These favorites will be asked to present their investor pitches at an annual event.
Casabona added that he is continuously amazed by the broad group of distinguished mentors who have volunteered at TechLaunch. Most of these people are part of the New Jersey tech ecosystem, he said, and they want to give back or see what kind of technology is out there. “I find it refreshing that there are so many people who are willing to give two, three, four hours of their time to help an entrepreneur get to the next step. One thing I’m looking to do is increase the mentor network.”
Another service of the new TechLaunch will be to give the entrepreneurs who have successfully moved past BullPen additional help in preparing for the due diligence process. “This can be very time-consuming for the angel, and many just don’t want to go through it.” However, if the TechLaunch team and mentors provide the guidance necessary to help the entrepreneurs prepare, those companies will have most of what they need. And they will be able to hand their material to potential investors, he said.
Casabona noted that one of the problems with the traditional accelerator model was figuring out (in advance) how much money to provide the teams, how much equity to take and what the valuation of each company was. “I wanted to get rid of all that, but at the same time have exposure to companies and hopefully improve their quality.”
He added that he had wanted to continue TechLaunch in 2015, but wasn’t seeing the quality of deals he wanted to fund. He had three options, he said. “I could have accepted the few companies that did meet my criteria, but that would lower the probability of success because you need a basket of eight or ten companies to make an accelerator model work. Or I could have lowered my threshold and admitted the next few companies to make up the basket of eight or ten companies. That would also lower the probability of success. The third option was to terminate the program and look for alternatives for the future. …I decided to take some time to figure out how I could best serve our growing ecosystem.”
He noted that when he started TechLaunch, in 2011, “we were still in the early stages of New Jersey’s developing ecosystem.” Looking out three or four years later, “we are in a different, much richer market.”