Investor Insight: Michael Doyle of Goldin Ventures

Early stage technology companies that have just completed the “birthing” and commercialization phase and are poised to enter the acceleration phase are at a very awkward stage. In all likelihood, they have had the financial support of angel investors up to this point, but their pending growth brings financial needs that are too great for angel investors and not large enough for venture capitalists. Michael Doyle, president of Goldin Ventures, sees that point in a business’s lifespan as his best window of investment opportunity.

Doyle’s preference for companies that are on the verge of business acceleration is based upon his 27 years of entrepreneurial experience. Most recently, Doyle worked as president of Eastern Research Inc., which grew from $3 million to nearly $62 million during his nine years of leading the company. When this company was sold to Sycamore Networks in 2006, the previous owners of Eastern Research Inc. asked Doyle continue the successful partnership and Goldin Ventures was born.

Goldin Ventures is interested in technology companies in southern New Jersey, eastern Pennsylvania, and northern Delaware that are looking for $1 million to $3 million investments to fund their acceleration stage. Companies located in NJBIN’s technology-focused incubators are an attractive investment for Goldin Ventures, provided the product has reached commercial acceptance and there are some revenues for the business.

Doyle recently offered these insights for business owners seeking funding from his or other investment companies:

Investors rarely invest in cold deals. An entrepreneur’s instinct is to reach out to investors directly, but it is much wiser to be engaged and introduced through bankers, accountants, lawyers, and friends that the investor already knows and trusts. When investors are approached by cold calling, they can become overwhelmed by the number of calls from companies that are not aligned to what the investor is interested in.
Investors don’t invest in technology, they invest in people. Investment decisions are all about integrity, trust and confidence, and people investing in people. Don’t get swept up in the technology segment of it. It’s the person that will get investors to cross the emotional threshold and want to invest.
Discuss the risks early to build trust. Sooner or later investors will understand the risks, but it’s smarter for the entrepreneur to deal with potential risk proactively. When entrepreneurs do this, the investor gains insight into the entrepreneur and into the business. When entrepreneurs describe the risks involved, they are scaling the boundary between themselves and the investor. Both are standing together and looking at the risks.
Succinctly articulate what business you are in. This may seem obvious, but its surprising how often entrepreneurs do not do this. Don’t just talk about the technology: it’s an aspect of the whole, but it isn’t the business. Investors want to understand how the technology will translate to a marketable product and be your business.
It’s never over until it’s over. At a certain point, the investor crosses an emotional threshold where they want to invest, but the deal isn’t closed yet. A significant number of transactions (20 percent) break down in the final stages. Closing a deal takes much longer than the entrepreneur wants or expects. Stay the course: you’re not finished until you have a signed document.
Execution is important. An entrepreneur needs different skills to accelerate than to commercialize a technical idea. Investors like to see that the entrepreneurs have a strategic case for the business, that there is a clear commercial opportunity, that they comprehend the market, and that they are equipped to succeed. Ultimately it’s about execution, how is the entrepreneur going to make this happen. The credential of having done this before is beneficial.

The National Business Incubation Association (NBIA) is the world’s leading organization advancing business incubation and entrepreneurship. Each year, it provides thousands of professionals with information, education, advocacy and networking resources to bring excellence to the process of assisting early-stage companies. An elected, voting board of directors representing the world's leading incubators governs the association.

The New Jersey Business Incubation Network (NJBIN) is a collaborative state-wide community of business experts, resources and facilities dedicated to enhancing the commercial success of early-stage entrepreneurial companies, growing higher paying jobs in New Jersey and supporting the Economic Growth Strategy for the State.