The endless stream of small businesses searching for venture capital provides mountains of work for venture capital firms seeking the rare gems worth investing in. But a pair of tech tools from Envista could help play matchmaker. "It's separating the wheat from the chaff. What fraction of business plans even warrant (investment firms') time to open the envelope?" asks Clarke Simmons, president of Arlington, VA-based Envista.
Envista's Private Equity Links Web site saves time for small businesses looking for capital by aggregating a list of small business investment companies (SBICs) and their Web sites. And the number of SBICs with Web sites is growing, as the industry does. The National Association of Small Business Investment Companies (NASBIC) says that 79 bank-owned SBICs invested $3.4 billion in private capital this year, and 10 new bank- owned SBICs were formed.
This spring Envista unveiled Thresher, a product that takes Web- surfing for capital investment to the next level. Thresher allows small businesses to fill out a customized application in a SBIC Web site, distilling information down to factors that would immediately disqualify the proposal. The intelligent agent sends an e-mail rejection letter if the proposal is not within the company's parameters or scores and forwards the application, within the company. The product costs between $15,000 and $35,000, which should be recouped within a year, Simmons says. "You've improved the quality of the deal flow."
Capital Across America, a start-up SBIC in Nashville, says it will install Thresher to make sure it is studying only proposals that meet the company's initial parameters. "It will provide us with a relatively inexpensive way to do an initial screen, where loans which just don't fit the profile that we're looking for can be (filtered out) very quickly," says John S. Odell, president. "We're not planning on using Thresher for a credit decision, but rather to make sure that applications that flow into our headquarters are from the regions we're serving, of the size we're serving and so on."