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Clubfixit: Diary of a startup
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July 14, 2000: 9:59 a.m. ET
Part III: Sean Mullin makes his first pitch to a panel representing angel investors
By Staff Writer Hope Hamashige
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NEW YORK (CNNfn) - Sean Mullin reached another milestone this week in the life of his startup, Clubfixit: his first real pitch before a panel of angel investors. Alas, Mullin was told Thursday he will not be receiving any angel funds from the group. Disappointed? Certainly. Defeated? Not at all.
In spite of the outcome, Mullin said the journey to the panel of investors taught him a lot about his company -- its weaknesses and strengths -- and gave him some ideas about how to overcome them.
"It was great to hear the questions the investors asked and learn about their concerns," Mullin said. "You get a better idea what they are interested in when you are talking to the people who can pull the trigger."
Here's how it all went down.
Contact
About two weeks ago, Mullin attended a networking event in New York sponsored by the New York New Media Association. There, he learned the  group had an angel investor program for NYNMA members whose companies are based in New York. He quickly submitted Clubfixit's executive summary for consideration.
Each month NYNMA accepts business plans to match with angel investors in the New York area. A panel quickly whittles down the stack of more than 100 plans and invites eight entrepreneurs to pitch their company to a group of investors. The investors then offer about three entrepreneurs to return for a second pitch before a larger group of angel investors.
All entrepreneurs have to set their own deadlines and make their own schedules. Mullin said the fact he had to make a pitch on a certain date pushed him even harder to exceed certain deadlines he had already made for himself.
"Events like this really push you. You always try to create and meet the deadlines you make for yourself, but it definitely helps to have an outside force," said Mullin.
Preparation
The 10 days between learning he made the first cut and actually making the pitch was a whirlwind of preparation for Mullin and his Clubfixit cohorts. The business plan went through yet another revision to reflect new plans for the company. One of the major changes involved including a brief description of the proprietary software the gang's technology chief, Phill Legault, recently started designing.
It also forced Mullin to sit down with one of his part-time partners, Craig Shirey, and start crunching the numbers again. This is one of the trickiest tasks for new companies because they have to project, through a combination of accurate market research and complete guesswork, how profitable their company will be and how much it will be worth.
Conduct faulty research on the size of the market and how much you can charge clients and it will be reflected in the numbers. Overestimate the number of potential clients and the percentage you expect to capture, and it may appear to investors you are overselling your company's abilities. Underestimate by too much, and investors may think the company executives are not going to be aggressive enough.
In other words: Be conservative, but not too conservative.
Running the numbers also gives entrepreneurs and investors an idea of how much money they need to keep the company alive and how long it will be before the enterprise is profitable. Mullin decided he needed at least $480,000 in angel funds to get Clubfixit off the ground.
Mullin and Shirey went to work again on the numbers and, finally, got their estimates nicely printed on stationary affixed with the Clubfixit logo. The revised business plan and the financial projections were packaged into slick, black folders also outfitted with the Clubfixit logo. The folders, too, were new and put together quickly to meet the looming deadline.
Verdict
Style matters, but substance does, too. In the end, NYNMA's angel panel decided ClubFixit is still too much of an idea and not enough of a company for the investors to get behind.
How times have changed. It wasn't too long ago that a good idea for a technology company was enough to get seed money for an entrepreneur. Today, entrepreneurs need to prove they'll be able to sign clients without spending too much money.
Indeed, at his pitch on Tuesday, investors asked several detailed questions about the ClubFixit marketing plan and how sure they were they would be able to capture clients without burning through their seed money. In the practice sessions where he rehearsed in the days leading up to the pitch, Mullin anticipated this question. In the end, his answer was not enough to satisfy this particular group of angels.
Mullin remains upbeat and continues to forge ahead. The Clubfixit Web site should be up and running within the next few weeks. Mullin has been in discussions with several design firms to do some design work on the site. The search for an attorney should conclude within the next weeks as well. Mullin said he is weighing two offers from law firms to represent the company.
Being selected to pitch and all the preparation that went into it means he will be that much more prepared the next time. Mullin is taking to heart the concerns of the investors, but remains firm in his belief that Clubfixit is on track and will soon be building a list of loyal clients. 
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