--- ----"My impression is that the VCs on the West Coast are more aggressive and = are willing to take bigger risks for bigger returns," says David BenDaniel, a professor of entrepreneurship at Cornell University's S.C. Johnson Gradua= te School of Management. "The East Coast tends to be somewhat conservative a= t this point." Use these strategies to tailor your pitch accordingly:
Set the right pace. Be prepared to speed up the way you do business when you approach West Co= ast venture capitalists. They tend to work more quickly than their East Coast counterparts and have less patience for meandering pitches. "You've got t= o get to the point," says Cormac Kinney, a New York-based entrepreneur who just raised $2 million in venture capital for his software company, NeoVision Hypersystems. There's a plus side to this step-on-gas approach= : Many West Coast venture capitalists have worked in startups themselves. I= f your enterprise grabs their attention, they're often more willing than th= eir eastern brethren to make a deal quickly and invest more money during the first round of financing. West Coast venture capitalists may also be will= ing to award you a higher valuation, although this can depend on your industr= y. "Valuations tend to be higher here because of the type of companies (that are located on the West Coast)," says John Stobo, Jr., a San Francisco-ba= sed venture capitalist with ABS Capital Partners. "They're technology-based companies.
In contrast, many East Coast VCs come from a banking background, says Kinney. "You have a lot of former heads of something at Merrill Lynch or Citibank," says the veteran of bi-coastal road shows. As a result, they m= ay want to spend more time getting to know your company than a West Coast VC= =E2=80=94 and you should oblige them. They may also balk at investing a large amount in the first round of financing; instead, waiting until your company is on steadier footing. "O= n the East Coast, it's a lot slower," says Kinney. "They'll say, 'Let's put= in $1 million,'" says Kinney. "On the West Coast, they'll bring in everybody and his brother =E2=80=94 and their brother =E2=80=94 in the first round = of financing. It could be $5 million-to-$15 million bucks." The traditional East Coast style of business can work in your favor if yo= u let it, says Andrew Sherman, a partner in the Washington, D.C. office of Katten Muchin and Zavis. You may be able to get more help in building you= r business if you strike a deal in East coast cities such as Washington D.C= ., Boston, or New York. "If the East Coast VCs are trying harder, it may be worth taking a look at them," Sherman says.
Choose the right market. Although investors on both coasts tend to gravitate toward Internet ventu= res these days, East Coast venture capitalists seem more willing to give othe= r types of deals =E2=80=94 such as media ventures =E2=80=94 a chance, says = Kinney. "On the West Coast, if you don't have Internet, don't even talk to them."
Look the part. Among West Coast venture capitalists, the dress code is young and hip. If you want to fit in, dress accordingly. "You might not even wear a suit," says Kinney. "You might wear some casual, dark-colored clothes =E2=80=94 = a SoHo cocktail party kind of outfit." On the more traditional East Coast, howev= er, a dark Brooks Brothers suit is probably best, says Sherman.
But the gap between East Coast and West Coast investors may be closing. "= I think the disparity between the East Coast VCs and the West Coast VCs are very quickly becoming old news, particularly as West Coast VC firms open = up East Coast offices," says Sherman. Changing technologies also seem to be playing a role, says BenDaniel: "Since various communications media (such as) the Web have made the world flat, perhaps the differences which exist will diminish."
In the end, says Curtis Glovier, a managing director at Nassau Capital LL= C in Princeton, N.J.: "Venture capitalists on both coasts are looking for t= he same things =E2=80=94 a top management team with a bankable business plan= (and) with the chance to turn a startup company into a very big enterprise."
Tushar J. Mehta email: [email protected]