Venture Capital in the 21st Century and What it Takes to Strike It Big

The tech presence and entrepreneurial spirit is making waves in Pasadena as huge companies and innovative entrepreneurs continue to move in. People like Jim Armstrong who is a successful and experienced early stage venture investor in enterprise and consumer technology and a Managing Director for Santa Monica based $240MM Tech focused global venture fund March Capital is a key player in this movement.

Armstrong stopped by Innovate Pasadena’s “Friday Coffee Meetup” to give a crash course on Venture Capital to an audience of local entrepreneurs.

“I’m a ‘lemonade entrepreneur’. I was just trying to make a buck and not work for ‘The Man’,” said Armstrong.

His words may be simply put, but this mentality is key to understanding the ebb and flow of Venture Capital, according to Armstrong.

Armstrong has over 20 years of technology investment experience and has generated multiple large exits through IPOs or mergers and acquisitions from companies he either incubated or participated as the first institutional investor, according to Innovate Pasadena.

“It’s an amazing time to do startups,” said the tech investor.

Individuals like Armstrong prove to be a serious asset for entrepreneurs who want to grow their company to serious heights that also provide great products and services that investors truly believe in.

“I’m not a pilot but I’ve been sitting in the control tower for twenty years. I do not know how to fly a plane and I do not know how to run a company, but I can say, ‘that one’s coming in too slow, that one’s coming in too fast and that one’s coming in just right’,” explained Armstrong. “That’s one of the values that venture capital can add. I’m a professional pattern matcher.”

Armstrong’s brief lecture touched base on what makes investors excited and how to land the important meeting that could make or break a company.

At the core of venture capital and business endeavors involving it, Armstrong suggests one crucial thing.

“You must start a company,” said Armstrong. “When you take Venture Capital, you’re signing up to do the best for shareholder value and that mean’s it’s not your company anymore.”

His advice for new companies with new ideas remains simple.

“Be compelling. It’s better to leave a lot of stuff unsaid,” explained Armstrong of how to impress investors in the first pitch meeting.

“The most important thing about the first meeting is to get a second meeting,” said Armstrong. “Stick to your big idea and your vision. Things are going to change and it could take as long ten years.”

According to Armstrong, there is more interest in investing for start-ups today than ever before.

“Companies buy innovation now,” said Armstrong.

The cost of creating innovation has plummeted, according to Armstrong, in which he gave an example of a colleague who is currently developing technology with a meager $600,000 when just a few years ago it would require several million dollars, at least.

Many people debate as to how one measure success, but Armstrong has a system of his own.

“If you’re doing a great job, you’ll have the opportunity to replace yourself and if someone else who has incredible experience comes in, they can make you a hundred times more wealthy and you can go another one while they’re doing that.” said Armstrong. “That’s the mentality we really push our entrepreneurs to have.”

So Where’s the best investment opportunities? Armstrong provided some professional analysis.

“My big ideas are offline and online retail. This industry is going to need to respond to Amazon and e-commerce,” said Armstrong. “There’s lots of money to be made.”

“Stick to your big idea and your vision. Things are going to change and it could take ten years,” said Armstrong. “

Over two decades of experience and great success has Armstrong’s work ethic narrowed down to one core belief: authenticity.

“You can fool someone into giving you money, but you can’t fool them into loving your product,” said Armstrong.

For more information about “Friday Coffee Meetup” and how to attend future lectures, visit www.innovatepasadena.org.