Many faces in the Triangle’s investment community haven’t changed much over the past 15 years. What about their advice?

As WRAL TechWire observes its 15th year of publication, we take a look back at what was said at a VC event where we formally launched publication on Jan. 22, 2002.

Compare back in the day talk to Thursday at the Bull City Venture Partners event in two stories reported by TechWire co-founder Allan Maurer.

Links with this post – WTW Insider content: Angels tell startups to do their homework and $10B Accel Partners looks for deals in the Triangle.

Here’s a look back at out coverage pf the CED Money & Markets event of 2002:

Venture Capitalists Still Running Scared, Mumma Tells Crowd at CED Conference

RESEARCH TRIANGLE PARK — A principal at the Triangle’s largest venture fund candidly told attendees at the Council for Entrepreneurial Development Money & Markets Conference Friday why VCs are tight with their money right now.

They’re chicken.

The candid remark came during a lunchtime chat. Intersouth Venture Partners’ Mitch Mumma tossed cold water on any entrepreneur hoping for quick cash. “Act as if things are not going to get better,” he said. And when Mumma talks, people listened. Intersouth, based in Durham, manages the largest ($170 million) venture fund in the Triangle.

“Until the values of public companies rise, there will be no liquidity event for venture-backed companies,” he said. “This causes venture capitalists to be chicken.”

Although Mumma’s candid admission drew a laugh from the audience, he continued, “I’m advising people to assume this will never change. You have to get cash-flow positive.”

Mumma wasn’t alone.

It’s tough to get venture funding unless your company is already making enough money not to need it, several venture capitalists told sessions throughout the day. The first-year conference, which drew 513 people from the southeast, included marquee speakers such as Charlotte businessman and candidate for US Senate Erskine Bowles, but the real action went on in the panel sessions.

Firms told to ‘create value’

Those in attendance heard a common refrain that Chapel Hill entrepreneur Reid Conrad summed up this way: “The general message of create value, do it organically, and do it in a customer-driven fashion, was a topic of all the sessions.”

A serial entrepreneur, Conrad successfully sold his first company, Chapel Hill based Extensibility, which developed XML software tools. He recently started his second company, Commerciality, which consults with companies to help them market their wares successfully.

Several speakers in different sessions said that the companies most likely to get venture funds in the current climate are those that don’t need funding to survive because their product or service produces enough revenue.

Sessions often produced distilled advice from some of the area’s more experienced venture capitalists, investment bankers, entrepreneurs and service providers.

A new way to get funding?

In a morning session on mergers and acquisitions, Scot Wingo, chief executive officer of ChannelAdvisor, which is his third start-up, said companies should prepare for the due diligence necessary in mergers and acquisitions ahead of time.

Rachel R. Selisker, managing director of Thompson Clive & Partners, Inc. and former CFO for Quintiles, where she oversaw the company’s initial public offering of stock and then its involvement in 40 M&A transactions, agreed.

“It made a deal more attractive if they were organized and prepared to answer questions,” Selisker said. “It was unusual for that to be the case.”

All the panelists agreed that companies considering mergers and acquisitions should hire an appropriate investment banker to guide them through the process.

Wingo said he recently encountered a new approach to M&As that might help some companies get funded. “I see venture capitalists with a company going sideways say, ‘Buy it; we’ll roll it into you and put more money in it.’ “

While Wingo said ChannelAdvisor thus far didn’t find any of the proffered deals attractive, “It might be a way to go if you’re looking for money.”

Greg Montgomery of RBC Centura warned listeners that many “sellers have valuation expectations that are unrealistic. We’re still in this hangover period from the 1999-2000 excess, still coming off the greed cycle.”

Over and over, venture capitalists and investment bankers at the conference told listeners that the traditional business values ruled again.

To be successful, they said, companies need: advantages over competition; customers, including if possible, trophy customers and trophy partners; revenues, preferably profits; and a clear path to an exit if they want venture funding.

The conference did include more optimistic moments. In a session on valuation of companies, Steve Nelson of the Wakefield Group, for instance, closed by saying: “There is a lot of capital out there and I see a lot of people prepared to do deals.”