A Match Made in...Cyberspace?
Guy Kowasaki, CEO
What Garage.com is: A matchmaker for company founders and sophisticated angel investors, select venture capitalists, and corporate venture-capital divisions. Entrepreneurs receive help with creating a management team or marketing strategy and with pitching their companies to the investors involved, who collectively have kicked in an average of $2.9 million per deal. "We're a broker-dealer, quasi investment banker, and what I call a venture 'gapitalist.' We fill that gap from $1 million to $4 million," says Kawasaki. "The bottom line is we're trying to help two guys or two gals in a garage get seed capital. We find 'em, fix 'em, and fund 'em."
And isn't: The final word. "Angels have to do their own due diligence. There's no on-line yenta yet."
The on-line advantage: "It's compressing time to 'high value' money and providing a greater breadth of exposure for the entrepreneur. It's all about opening up the channels. Taking information over the Internet is 100 times more efficient for us than taking a paper business plan. We determine the questions and how much space entrepreneurs have to answer each one--it's all standardized. And the plans are searchable forever. All plans are created equal through the Internet. And we read every one of them."
Your odds of finding funding: Nil, unless you're a hot start-up in high tech, biotech, or health sciences. Garage.com expects to close on 30 deals culled from a projected 10,000 business plans to be submitted by the end of the year.
Fee: Typically, 5% of money raised. Garage.com also buys a small stake in the company at the "pre-deal valuation" price.