A Saner Approach to Consolidating Iowa Counties

It seems that in recent years much of the discussion of local government inefficiency in Iowa has centered around the assertion that Iowa has too many counties. There are only eight States that have more counties than Iowa so certainly we could get by with less.  But of the 1,400 local governments in Iowa (if one includes school districts but excludes ther special use districts) only 99 are counties. So cutting the number in half eliminates about 50 local governments out of 1,400 total. Certainly county consolidation is not the complete answer.

It should also be noted that while Iowa ranks ninth in the total number of counties there are another eight states that have more than eighty but less than Iowa's 99. So  they are not significantly different.

Two extremely small states no longer have functioning counties, Connecticut and Rhode Island. Alaska, the largest state geographically has only twelve while Texas has 254 counties. Hawaii and Delaware have three each. To a great extent the number of  counties has much less to do with the size of the state than with when the state was formed, its heritage and functions that counties perform.

Midwestern and Southern states generally have more counties than do eastern or western states. New England ,states have historically had strong township governments that performed many of the functions that counties in other parts of the country traditionally perform. Western states were formed primarily as ranching states with much lower population density than states to the East. Economies of scale therefore necessitated larger counties in the region.

While in Iowa we have discussed consolidation for years, very little change has been made in the number of counties per state since each state's admission into the union. In fact, in the second half of the twentieth century there was only a net decrease of 35 counties out of nationwide total of over 3,000 counties, or a reduction of about one per cent of the total. This of course does not mean that there is not merit in the concept of consolidation. It does show that perhaps it is either not as pressing an issue in other states or is more difficult to persuade people to give up there attachment to a county than we might think.

Much of what has been discussed in Iowa is consolidating every couple of counties into one getting the number from 99 down to around 50. This type of consolidation plan seems rather simplistic and ignores the reason for government consolidation, that is that there is no longer minimum efficient scale (MES). In otherwords, he county has gotten so small that it isn't possible to run it efficiently anymore.

In county government's case there may be two ways to solve the problem of MES, you can consolidate or you can give them more duties. If you have read my recent article on city classification in Iowa and the one on school consolidation you might see where I am going with this. The counties could take over most of the services now being provided by cities of less than 500 population, it would also be possible under my proposal for school consolidation, for the counties to actually govern the school district.

I have not researched the idea of the school district being under the county board of supervisors but my gut tells me that perhaps the school district should still be independent.  The idea of the county maintaining roads and utilities in small towns would make certain county departments busier but would not change the work load of the county recorder, attorney or assessor for instance.
There is no assurance that counties will ever take over small community services and even if they do a case can still be made for consolidation so here is my plan for county consolidation. Just realize that other developments could mitigate the need for consolidation of some of the counties. There are eighteen counties with less tar 10,000 inhabitants. Half of them are located in the southern two tiers of counties. The two
smallest counties Adam, and Ringgold, have less than 10,000 people combined. It should be noted that Iowa is not alone here. There are 671 counties nationwide with less than 10,000 residents.

Consolidation may be accomplished without the loss of county identity if two, counties decide to combine operations and tax base but maintain their separate boundaries for cultural identity only. I am sure that keeping county boundaries in the three Eastern states that eliminated some or all of there that had as much to do with local identity as it did with statistical analysis. These states are Massachusettes, Conecticut and Rhode Island.

So if we do not just merge every other county with its neighbor, how do we consolidate those counties that make the most economic and social sense. I believe that there is probably a certain population threshold that makes it difficult to operate county government with any sort of efficiency or effectiveness. I'm not sure what that threshold is but I have designed a merger plan where no county would have less than 15,000 people and where possible counties of similar population are merged so that neither has too much influence in the merged government. In one case a county of more than 15,000 population, Harrison County which has just over 15,000 population was merged with Monona County. This is because it was the only real solution to merging another county with Monona without attaching it to a much larger county. O'Brien County was also above 15,000 population but cednsus estimates are that it is well below that level in 2008.

An argument can be made that 15,000 population is too small and some larger minimum should be used. I certainly wouldn't argue with this. Some Western states have counties much larger than those in my proposal but the area of some counties would get quite large and service may suffer. A cautionary note - The most rural counties in the state also tend to be the poorest. Many living in these counties do not have access to the internet so cannot do business on line. Also these counties have the highest proportion of elderly and persons with limited access to reliable transportation. Combining four or five counties to get to 25,000 population could be a hardship on these residents.

The counties could be merged in different combinations than proposed here, but generally speaking the smallest fifty counties should be consolidated with one other adjacent county. There is one case where three counties need to be merged to get to a reasonable population threshold. Finally, there is at least one case in the state where I believe counties should be merged because of the growth cities from one county into others. This is the merger of Polk, Dallas and possibly Warren counties.

During the discussion of the merger of Polk County with Des Moines and possibly other Polk County communities, one of the complications in my mind was how to deal with Urbandale, Clive and West Des Moines that have 1,000s of residents in both Polk and Dallas County. Also a true metropolitan governmet would incude the Dallas county suburb of Waukee and Warren County community of Norwalk. Finally, Des Moines proposes to annex land in Warren County. Perhaps the first step in any discussion of metroplitan governmment should begin with the merger of the counties that should naturally be a part of this government.

My consolidation proposal would reduce the number of Iowa counties from 99 to 71 counties. This may not be enough for some people but makes a great deal of sense economically and for accessibility concerns. Following are a list of the seventy-one counties after proposed consolidation from Northwest to Southeast:

1. Lyon-Osceola, 2. Dickinson, 3. Emmet-Palo Alto, 4. Kossuth, 5. Winnebago-Hancock, 6. Worth-Mitchell, 7. Howard-Chickasaw, 8. Winneshiek-Allamakee, 9. Sioux, 10. O'Brien-Cherokee, 11. Clay, 12. Cerro Gordo, 13. Floyd, 14. Fayette, 15. Clayton, 16. Plymouth, 17. Buena Vista, 18. Pocahotas-Humboldt 19. Wright-Franklin, 20. Butler-Grundy, 21. Bremer, 22. Woodbury, 23. Ida-Sac, 24. Calhoun-Green, 25. Webster, 26. Hamilton, 27. Hardin, 28. Black Hawk, 29. Buchanan, 30. Delaware, 31. Dubuque, 32. Monona-Harrison, 33. Crawford,  34. Carroll, 35. Boone, 36. Story, 37. Marshall, 38. Tama, 39. Benton, 40. Linn, 41. Jones, 42. Jackson, 43. Shelby-Audubon, 44. Guthrie-Adair, 45. Dallas-Polk-Warren, 46. Jasper, 47. Poweshiek, 48. Iowa, 49. Johnson, 50. Cedar, 51. Clinton, 52. Scott, 53. Muscatine, 54. Pottawattamie, 55. Cass-Montgomery, 56. Madison-Clarke, 57. Marion, 58. Mahaska-Keokuk, 59. Washington-Louisa, 60. Mills-Fremont, 61. Adams-Union, 62. Lucas-Wayne, 63. Monroe-Appanoose, 64. Wapello, 65. Jefferson, 66. Henry, 67. Des Moines, 68. Page, 69. Taylor-Ringgold-Decatur, 70. Davis-Van Buren, 71. Lee.

Making Sense Out of Iowa's 947 City Governments

Iowa has more municipalities than 46 of the other 49 states. If one counts school districts but does not count other special purpose districts, Iowa has just over 1,400 local governments. We have been discussing school district and county consolidation for years but  67% of local governments in the state are municipalities that generally do not lend themselves to consolidation. Does it matter how many municipalities there are and if so what can be done, especially given that over 650 of these municipalities have less than 1,000 residents?

Historically the large number of communities in Iowa can be traced to the state's agrarian culture where it was advantageous to have towns every few miles in order to move agricultural goods and supplies. Most of these communities thrived during the height of Iowa's development. Today, with modern transportation, electronic communications, shopping on-line and regional mails many of these towns survive artificially. They are bedroom communities, or exist. prumarily on government transfer payments, such as welfare and social security.

Most states classify cities based on size and/or functions. Some use a number classification like Nebraska and others use more descriptive classifications such as "village", "town" and "city". In Iowa we have no classifications. A city of 50 residents has virtually the same rights, powers and responsibilities as a city of 200,000 population. Other states may give larger cities super powers when it comes to annexation to minimize urban sprawl. Nebraska is an example of this, where Omaha and Lincoln are the only cities in its highest classification. Others may require more reporting or service provision from larger cities but provide more state revenue sharing to them.

Iowa has 100 cities with 100 or less residents. What services can a city of this size really provide to its residents in a cost effective manner? On the other side of the equation, how much motor fuel tax revenue or other state revenue sharing should the state be expected to allocate to such small local governments? Can they use it effectively and does the administration of such grants cost more than the grant amount? Now consider that 20 of these "cities" have less than 50 residents an six have less than 25 residents. Is there a point where they should be dissolved automatically? Consider Beaconsfield with 11 residents and Benton with 13 residents. Do they even have enough eligible voters to fill the elected positions?

In 2003, the City of Kent, Iowa voted to dissolve its city government and be governed by the county. There were a number of news reports that lamented the disappearance of this town off the map. The fact of the matter is that Kent effectively stopped functioning as a local government decades ago and we should applaud the action of the electorate to recognize that they were wasting resources, both in time and money to continue as a municipality. Many more communities should follow their lead. The fact of the matter is that Kent with a population of 52 people was far from being the smallest municipality in the state.
I suggest that Iowa go to a classification system with different rights and responsibilities for each. Below I suggest three classes but I could envision dividing the largest cities into two groups of cities of 50,000 population and above and the other from 15,000-35,000 population.

Twenty-four cities with populations of 15,000 and over population would make up Class I cities. This classification would have all of the powers now allowed cities in Iowa but might also have some powers relating to transit, urban redevelopment, annexation or other issues allowed only large cities. There share of state revenues may be different as well.


The next classification would include all of the communities between 501-15,000 population or class II cities. Certainly there is a big difference between Batavia and Indianola, but these are all communities that are large enough to be viable on their own. For the most part, they have enough critical mass and tax base to function as an independent general-purpose local government. There will be significant differences in the number and level of service provided but all will generally provide all of the essential government services, customarily associated with a municipality. This category would include approximately 450 communities. Communities in this category would generally have all of the powers and responsibilities that Iowa cities have today, but probably little more.

There are just under 500 communities of 500 inhabitants or less that compose the final classification. 100 of them have 100 or less residents but are still considered a city by Iowa law! These are communities that in almost all instances have been declining in population for decades and have lost the ability to provide basic municipal. services to its residents from either a cost effective or quality standpoint. There are a number of apartment complexes in Iowa's metropolitan areas that have more than 500 residents at any one time, let alone 100!

These communities have ceased to exist as viable economic units. There is very little if any manufacturing, processing or distribution employment and extremely limited retail activity. In the 100 smallest communities there is virtually no economic activity and hardly no tax base to sustain a local government. In these 480 communities it makes perfect sense for the community to have the county assume responsibility for waste water, water, solid waste, street, law enforcement, parks and other essential services.

For this, the county would be allowed to tax these communities at a higher rate than than others. As part of this re-classification, these smallest communities would not receive state revenue sharing from liquor profits, road use tax fund or other state grants-in-aid. Some of this would be re-allocated to larger communities where the cost benefit is much greater and a percentage may go to the counties that will be responsible for assuming a greater role in these communities.

A few activities and services would stay at the community level such as the local fire department, cemetery and and community celebrations or events. I suggest that these communities at least those with populations of less 250 population form "Town Hall" forms of government where all those of voting age get together as a group and decide issues facing the community. The largest of these communities probably has less than 350 voting age adults certainly a large meeting but nothing that could not be handled at a local church or school, especially since 100% attendance would he extremely rare.  These communities would be classified as towns or perhaps villages. The state may also want to consider a provision that disolves any municipality that falls below 50 people at the time of the U.S. Decennial Census.

Certainly consolidation of cities does occur, most of the time in metropolitan areas but Dallas and Melcher two small contiguous communities merged not that many years ago. Others like Humboldt and Dakota City or the several cities ringing Lake Okoboji would be other candidates. This or shared services by these cities could cut costs and possibly provide better services. There certainly has been talk of city-county and city-city consolidation in the Des Moines metropolitan area. I have thoughts on these issues, as well but it is too complicated to advocate a solution in a blog.

For now, it would be great if we could classify cities to make their rights powers and responsibilities more consistent with reality.

A BOLD APPROACH TO SCHOOL CONSOLIDATION IN IOWA

The Iowa General Assembly passed legislation in 1858 providing for county high schools. Until the early 20th century most public high schools in Iowa were countywide where township elementary schools would send their graduates, unless they planned to attend church run academies that were prevalent in the 19th century.


During this same period states around the nation were establishing county superintendent's offices to oversee the township schools and county high school. In many instances the county superintendent was also the principal and a teacher in the high school. The county superintendent acted as a go between for the local districts and the state board of education. They supervised teachers in the country schools, provided teacher continuing education, administered 8th grade county board tests and made certain that the local districts adhered to a curriculum that met state requirements. In 1879, thirty-four of the thirty-eight states had county superintendents.

Starting in the 1920's towns in Iowa's counties had grown large enough to have two or three independent school districts with their own superintendents and the capacity necessary to report directly to the state board of education. Gradually, township or country schools were replaced by school district grade schools in town. This lessened the need for county superintendents. County superintendent's offices were replaced in almost all states by multi-county educational service agencies during the 1960's and 1970's. In Iowa, the replacements were the 15 Area Education Agencies.


Even though Iowa's population has grown slowly over the past century, rural populations have declined. This along with a growing senior population in Iowa has meant significantly fewer children of school age in most of Iowa's school districts. Over the past forty years there has been a significant number of school consolidations, but the consolidation has not kept pace with the declining enrollment.

Thirty-one states have more public school students than Iowa but only thirteen have more school districts. Iowa has Only seven states have more districts than Iowa on a per pupil basis. Iowa's average district has 1,422 students K-12 or 109 students per grade level. Remember this is the average, not the smallest. Iowa currently has 362 public school districts, 333 of these with high schools.

K-12 public school enrollment has dropped from 660,000 students in 1970 to approximately 515,000 today.10 This is a 22% decline in 38 years. Add to this that enrollment in many urban and suburban districts has grown significantly during the same period and you can understand the how dramatic the enrollment drop must be in rural districts.

According to data from the Iowa Department of Education, fifty of Iowa's ninety-nine counties have less than 2,600 students. This is less than 200 students per grade level and yet these counties may have four or five school districts within its boundaries. There are 14 counties with 100 or less students per grade level! An example is Palo Alto County, the county I grew up in. It has four school districts with the vast majority of  each districts enrollment from the county and yet it only has 1,390 total students. More disturbing is that 69% of the school districts reported a decline in enrollment in the 2008-2009 school year and this trend has been occurring for 20 years.
 
We have 53 school districts with less than 300 students, up from 34 in 1997! About half of these do not have high schools but without high schools the average grade level has less than 34 students and with a high school 23 students!
 
There has been some consolidation over the past twenty years but far too little. Too often the consolidation is of two very small districts combining so as not to be consumed by a larger one. This has left the state with a quilt patch of districts that has little to do with efficiencies, comutting patterns or retail trade patterns. The smallest districts have a teacher to pupil ratio of less than 10 whereas the larger districts have a more reasonable ratio of 14-15 students per teacher. Most of the time a low pupil to teacher ratio is good but if it gets too low it means the school district is paying too much for teachers. Another issue is how broad middle school and high school curricula can be with so few teachers and resources?
 
Enter county school districts, as was the case early in the 20th century. County school districts are not the answer for larger counties but for 60-65 of Iowa's counties this makes the most sense. I come to this number by establishing county districts for the 50 counties with less than 2,600 students. I then add to this all counties that have more than 2,600 students but where one district has over half the students enrolled, leaving a district too small to be viable. There are some districts that are close to this today Clark and Davis Counties are virtually there. The reason for choosing a minimum of 2,600 students is that below this number a county could not have two districts that averaged over 100 students per grade level, meaning at least one district in the county would be extremely small.
 
In most cases the high school for these districts would either be in the country seat or the largest community in the county. This does several things - It minimizes time on the bus since most county seat communities are near the center of the county, it allows the one community that is most viable in the county to increase economic activity but most importantly is makes education in Iowa both more economical and ultimatley of higher quality. School districts in the 35-40 counties without county districts would act as independent districts much as they do today. However, counties dropping below the 2,600 student level for five consecutive years would need to be re-organized into a county district. Small districts inside these counties that dropped below 1,300 students for five consecutive years would need to consolidate with a neighboring district in the same county.
 
Of course one could argue that the break off should be 2,500 students or even 2,000. This is not as important as the concept. My plan takes the number of districts in the state from 362 to approximately 160. Would 120 or 200 districts be better numbers? Possibly but 362 or anything near is not. The governance of these districts is also open for discussion but could impact how we look at county consolidation. See future blog on county government.
 
Notes:
I must correct a statement in my last blog about only eight states having more school districts than Iowa. As is stated in this article, the correct number is thirteen.
 
Data in this article comes from the Iowa Department of Education website.
 
 
 
 
 

A Case of Too Many - Not Too Much Government
First in a Series of Articles on Consolidating Iowa's Local Governments

As some of you know, my college education was in political science and public administration and the first 14 years of my professional career were spent working in state and local government on planning, public policy and public administration. The past twenty years have been devoted to the venture capital industry but I still feel a need to try to improve government effectiveness. I believe my work with entrepreneurs and with government are closely related. Both come from a desire to help lift up Iowa and the Midwest economically, socially and culturally.  I have spent most of my life in Iowa with five year stints in both Illinois and South Dakota.

Six to seven years ago I spent a great deal of my time writing 100+ pages of what I thought might be a book on how to reverse Iowa's century long economic and demographic stagnation. My guess is that most Americans and probably even most Iowans do not realize that Iowa has been losing ground relative to other states, in some respects for over a century. Iowa ranked 10th in population in 1900. It was bigger than California, New Jersey, Georgia and it's neighbors Minnesota and Wisconsin! However, Iowa was the slowest growing state in the 20th century and now ranks 30th. twenty states including those mentioned above surpassed Iowa in population in the 20th century, the largest drop in ranking of any state.

The 2008 population estimates shows that Iowa still holds its ranking of 30th but has grown at an unimpressive 3.75% since 2000 whereas the nation has grown by 8.2%. The five states ranked just below Iowa are all growing faster, especially Nevada and Utah and could catch them soon. While population growth is not all important in this time of limited resources, it is important economically, politically and culturally to maintain a minimum level of growth compared to other growing economies. Its comparable to Minimum Efficient Scale as it relates to for-profit entities.

Anyway the book idea got too unmanageable and I got too busy and it was set aside until now. As I look back the writing probably was not a book as much as a series of essays. Recently I decided some of what I wrote still needed to be said publicly and some was much less topical. The discussions regarding school and county consolidations continue to pop up in the statehouse and needs to be addressed thus my desire to express my views on these and other topics.


Just like any distressed organization, (whether public, private, for profit or not for profit)  state and local governments must look at both how to grow, in this case its economy, but also how to stop the bleeding - cut costs. Iowa clearly has too many units of local government and can cut costs by lowering the number. Here are the compelling numbers. Even though Iowa ranks 26th in geographical area and 30th in population, Only three states have more municipalities than Iowa, only eight states have more counties than Iowa and only eight states have more school districts than Iowa. In Iowa it seems the problem may be more a case of too many governments rather than too much government.

But willy nilly school district consolidation as has happenned in the past or cutting the number of counties in half by consolidatiing every other county with its neighbor is not the answer. We must take a look at the demographics of each area and how consolidation of one type of government might affect another. In the days to come I plan to address the re-organization of local government through, consolidation, re-classification and in some cases, re-assigment of duties through a series of articles in this blog.

I Have a Business Plan – Now What?

Entrepreneurs all hear that in order to attract financing they must have a business plan. Most small business assistance organizations, whether they be SBDCs, entrepreneurial centers or accelerators are well equipped to assist the small business person with the preparation of a business plan, including requisite market research and financial projections. Sometimes, but not often these plans include a well developed marketing and sales plan that anticipates channels of distribution, a reasonable estimate of the sales cycle and the cost of sales.

The entrepreneur now has a product, a management team, business plan and a fifteen minute power point presentation. All that’s left is raising money, right? Wrong! One must execute on the business plan! This requires strategies, tactics and the ability to implement them. I have seen so many well written business plans and well executed investor presentations that just cannot hold up under further due diligence. One thing that we have done at Hopewell Ventures, where I was a partner, is to require a 100 day or longer Action Plan in the term sheet as a condition of funding. In other words, what will you do the first week and what will you do in the sixteenth week after you receive significant capital? This should not be necessary. This kind of discipline should already be in place but it usually is missing.

I have gone into companies that have had $2 million-$5 million in annual sales but have no idea how much those sales cost or are shipping product from China because it is cheaper but need to pay extra transportation costs and warehouse costs because they can’t anticipate when sales will close. I have talked with management of businesses that believe being entrepreneurial means having no written policies in place. Execution risk is the biggest risk most venture capitalists face. This is why the management team is so important but so often execution is still lacking.

Some of this implementation planning should be part of the business planning process but is not, other pieces can only be developed after a plan is put in place. Many times management, especially in start-up companies has no idea what to do first second and third. Business assistance organizations either do not have the resources and/or do not have the expertise to take a business to this next level of assistance. All too often these businesses do receive financing and waste much of that money before they understand what is wrong. If your business is getting in the door to make presentations at Venture Capital or Angel Funds but is being turned down at the next level it probably is not your business plan. You might need to take your business planning to the next level.

I believe that this inherent weakness in entrepreneurial development is especially severe in places where relatively little entrepreneurial culture exists. A large pool of management expertise is lacking and less experienced management is less likely to understand this level of planning and implementation. Business assistance providers, entrepreneurs, angel and venture investors in these regions must be able to identify this problem and be willing to address it with additional resources either at the public/non-profit agency level or by retaining private expertise in this area.

Networking at an Angel or Venture Investment Forum
By Jude Conway

One of the toughest things for me to do is to approach a complete stranger, introduce myself and start a conversation. It is even more difficult when you wish to ask that person for a favor, or worse money. Formally presenting your company’s case at an investment forum is extremely important but equally as important is the ability to network informally at the many opportunities afforded at such an event.

Your formal presentation lasts fifteen minutes and is sandwiched between 20-40 others. At the end of the day only two or three really stand out in the investor’s mind. If there are concurrent tracks the investor must choose which ones sound most interesting from a one page summary because they cannot attend two concurrently. Sometimes two that they really like are opposite each other. Add to this the fact that many venture capitalists are constantly being called out of the meeting to deal with a portfolio company problem a conference call or to deal with a pending investment. It is not unusual for some busy venture capitalists to see only 25% of the deals at the forum.

For these reasons it is imperative for a company seeking investors at a one-two day forum to maximize the 10-20 hours at the conference when they are not presenting. I attended a conference recently where one of the presenters asked to speak first in the morning so that they could leave after they were finished. She did not attend the reception the evening before, although a company representative was there and no one manned their company’s booth after her presentation was over. I can understand if a CEO needs to leave a conference early to attend a critical meeting but for heavens sake have someone else there to represent the company’s interests.

Many of these conferences start with an opening reception that lasts two to three hours. This is a chance to speak with the investors before they make their final decisions regarding which presentations to attend. It provides one of the only chances you will have to influence that decision. Remember you can influence him/her either positively or negatively. Introduce yourself or even better have someone that knows them introduce you.

This is a perfect time to use your 2-3 minute elevator pitch. You never know when someone or something will interrupt the conversation. State your case succinctly and move on. Do not forget to leave behind a business card. No one likes someone that dominates their time and you have other people to meet! There are times when someone is extremely interested in your proposition. In this case spend as much time as they want. Make sure that you have spent time prior to the event anticipating questions that may be asked and have clear, definitive answers.

Do not drink too much or have your staff drink too much at the reception. Do not heap your plate full of reception food, however tempting it is to get a free meal. You never know who will be turned off by this. Dress appropriately throughout the conference! Thank everyone for their time, sponsorship, volunteering – whatever is appropriate. Much of this seems obvious but it is amazing the gaffes one sees at these conferences.

The next opportunity you may have is at breakfast the next morning. Get there early some people that didn’t make it to the reception will be showing up early to pick up their registration material. This gives you a chance to have a cup of coffee with one or to more people before you sit down for breakfast. Once you sit down for breakfast you are stuck with those at the table.

The most comfortable thing to do at a meal is to sit at a table where you know everyone. DON’T DO IT! Find a table where you know no one. If more than one person from your company attends, split up (unless you feel that the only way you are effective is as a team). Introduce yourself to everyone at the table. Try to engage the people on either side of you in conversation. The name of the game is getting your story out to as many people as possible.

There will probably be breaks in the morning and afternoon where refreshments are served. If you have already made your presentation this would be an appropriate time to approach someone that attended the presentation, perhaps someone that you met earlier. Ask them whether they need any additional information – ask if they have any questions. If you have not yet presented, this is one more opportunity to meet someone new.

At lunch, repeat breakfast steps. Find a table with new people, unless a potential investor asks you to sit with them!

If the conference provides a table or booth for you, have it manned whenever the conference is open. This means bringing a second and possibly third person to the conference. It should even be manned when you are presenting. Make sure that the people you bring can answer questions intelligently, have a minimum level of etiquette and in general will not embarrass you. Have product and company literature available if possible.

If you have the opportunity to meet conference organizers ahead of time take advantage of it. If the conference offers training take advantage of it. Ask any and all of these people if they will make introductions for you at the conference.

If you are provided contact information of those attending the conference write all of them to follow up. Ask if they need additional information or have any questions. Do not write any of the investors that you met personally until you have attempted to call them first. Find a way to meet with them personally outside the conference if possible.

If the conference does not provide contact information, use the business cards you gathered. Trade business card information with other presenters at the conference. Google names of anyone you heard of at the conference. One of the attributes an investor is looking for is initiative.

Do not give up after one call or e-mail - VCs are busy – be persistent, but don’t be a pest. Another attribute the VC is looking for is persistence.

Every conference affords you the opportunity to improve your networking and presentation skills, even if you do not receive funding. If approached with the right attitude, each opportunity to present your story will make the next opportunity better.
Copyright 2009

Making a 10-15 Minute Presentation at an Angel or Venture Forum*

“The goal of your presentation has been compared to speed dating. You are hoping to get sufficient interest from investors for a second date.”

Ø Introduce yourself if someone does not introduce you!
Ø Early in the presentation, explain the problem that your product solves and how large the problem is.
Ø Briefly explain in lay terms your product in the context of a solution to that problem.
o Too many inventors want to provide a lengthy technological explanation of the product. There is not enough time and you will lose much of your audience.
Ø How is your product different/better than alternative remedies. What are the barriers to entry? In other words, what protection do you have that will keep competitors from copying or imitating your product or service, e.g. patents, copyrights, first mover advantage?
Ø What is the size and growth forecasts for your market?
Ø Explain your business model and how you will make money selling your product.
Ø Briefly describe the management team, their capabilities and experience and why it is the right team for the job.
o If there are any gaps in the management team identify them and explain your plans to fill them.
Ø Provide in summary style your financial projections. Include when you plan to hit cash flow breakeven and profitability.
Ø Explain how much has been invested to date by the founders and by others.
Ø Close by explaining how much new money you are seeking and its uses.
Ø If using slides, close with a slide of your contact information.
Ø “Avoid death by Power Point. Power Point is the most abused substitute for Good Speaking on the planet.”
o Only a few good slides are needed. Less is definitely more in this case.
o Do not try to put too much on a slide. Don’t get wordy.
o Do not try to diagram or illustrate complicated concepts on a slide
Ø A good rule is less than one slide for each minute of presentation (five slides for a five minute presentation may be alright but 45 slides is never ok, even if the presentation is 45 minutes)! If using technology have a back up
Ø If using technology have a back up – Too many times I have been in presentations where half the allotted time is used trying to fix a computer glitch.
Ø If the product is hard to explain bring the product along or provide a picture. If the product is food bring samples. Do not try to demonstrate the product in the time given, especially software!
Ø Investors attention spans are short – you must get the value proposition out early. At an investor forum they may be listening to 15 deals in one day – Be aware of where you fall in the queue. Are you early or late, right before lunch or right after, etc.?

Ø Remember what Albert Einstein said, “If I have a 6 hour speech to give, I practice for 3 minutes. If I have a 3 minute speech to give, I practice for six hours.”
o Practice live for friends or associates, practice in the mirror, time yourself, use a tape recorder. Practice, Practice, Practice!

Copyright 2009
* Quotes from “Successful Entrepreneur Investors,” Copyright 2007-2009