Eventually Faucher seems to find his footing, and the Atlas partners appear to be taking in the pitch with interest. Peter Shannon, an Atlas associate, asks about the competition, whose names he can rattle off without glancing at notes: Indie911, Snocap, CD Baby, Echomusic, GigShare.
Faucher maintains they're not really competitors, because Nimbit will actually help musicians sell at all these sites, even updating the listings there automatically.
"Will you be competing with iTunes?" Bichara asks.
"iTunes is becoming like a major label," says Antoniades, with what seems like heartfelt scorn. "They're doing the same things to independent musicians that labels did. They're making musicians pay for exposure." Faucher adds that while Nimbit will help artists place their songs on iTunes, it will advise the artists to try to shift sales away from iTunes to avoid Apple's (NASDAQ:AAPL) cut, which can be as high as 50 percent.
The partners both nod, impressed. Sensing the upswing in interest, Faucher goes all-in. He jumps to a slide showing revenue projections, waits a beat, lowers his voice, and says, "This could be a billion-dollar business."
If the partners doubt it, they aren't showing it. In fact, they briefly take over the pitch themselves. "What we're really looking for in a company like this is a network effect," Bichara says. He apparently means viral marketing. He wants to know if there is some way that interest in Nimbit can be made to cascade online, so that musicians end up recruiting other musicians. In other words, will Nimbit have to market hard to win over bands one by one, or is there a way to get it to catch on instantly with tens of thousands of bands?
But Faucher either doesn't understand the comment or chooses to ignore it. He continues on with the next slide.
Shannon persists: "Where's the network effect?"
Faucher stammers. Antoniades shrugs. Cramer speaks up. "We could give you 10 different answers to that question off the top of our heads, but we really need to think that through," he says. Both partners look at their watches. "We're just about out of time," says Bichara.
"I can finish if you just give me two uninterrupted minutes," says Faucher peevishly. Cramer flinches. The point of the presentation is to engage the partners, not to force them to stare mutely at a parade of charts and bullet points.
But Faucher insists on going through the rest of the slides, albeit with rushed commentary. Cramer, looking a little flushed, prods him sharply to wrap it up. "Next slide…Quick…Go…Finish…" When Faucher mercifully hits the last slide, Cramer turns to the partners and says, "Done. Ask."
The partners want to hear about who else is involved with the company. Cramer doesn't wait for Faucher to answer; he quickly ticks off a few of the luminaries who are advising the company--including Gail Goodman, CEO of the successful e-mail marketing company Constant Contact (NASDAQ:CTCT) (she's the one who introduced Cramer to Faucher), and Don Rose, the founder back in the '80s of the highly regarded record label Rykodisc and a well-known figure in the Boston music scene.
"Let me give you my initial reaction," says Bichara. "This is a great business opportunity. You know what you're doing, you don't have much direct competition, and you have the right advisers. I'd like to take a serious look at investing. But I'd need to hear more about how you'd defend your position and better data about the segmentation of the market."
Outside, Cramer confesses he is surprised and elated to get what he regards as such highly positive feedback right on the spot after their first pitch. But he notes that the clock is ticking for Nimbit. It's just about out of money, and if it doesn't have a term sheet, or tentative agreement with VCs, within a matter of weeks, the company may have to fold. Atlas may be interested, but it has to be pressured into moving quickly. "We absolutely have to get other VCs in the game," he says.
March 13, 2007
Flagship Ventures, Cambridge, Mass.
Cramer is ushered into a corner office with a stunning wraparound view of the Boston skyline climbing up from the Charles River. Jim Matheson, a partner, maneuvers around the golf clubs leaning against the whiteboard to greet Cramer warmly, and the two quickly get down to business. This meeting is one of a series of informal discussions Cramer has arranged with various VCs to explore opportunities for him. At least that was the original plan.
Matheson runs through several start-ups in which Flagship has invested to gauge Cramer's interest. One is an alternative energy effort; another is a media distribution company; even an online music company has made it into the portfolio. Flagship has become especially interested, Matheson says, in start-ups that could help millions of solo entrepreneurs do a better job of business management. Like, for instance, musicians, he says.
"I'm interested in that, too," Cramer says casually. "As a matter of fact, I may have found the right opportunity." He sketches out the idea behind Nimbit. "We're raising money fast." Matheson is quiet for a moment. "Would you run it?" he asks. "Well, there's a CEO right now," says Cramer. "But I'd do whatever it takes to make it fly."
