CASE IN POINT
Wednesday, April 18th, 2007Met with Mike Orren of Pegasus News yesterday, who is the kind of entrepreneur who still makes a lunch meeting in the rain even when he’s on his motorcycle that day… Mike and his team formed the company against all prevailing wisdom that independent local online content is an impossible economic model and it’s all been done before. To date his team, which has strong print, online and technology skills have built a platform that delivers deep niche content based on topic/location (one Dallas suburb even put up a billboard promoting Pegasus because Pegasus’ local coverage beats the traditional media) combined with an ad targeting engine that delivers up content sponsorships according to the usual variables plus some, including mobile.Easy to say on paper, harder to execute, but 4 months in Pegasus now has the pageviews and unique users to indicate their product has legs and that their ad model will support good returns. Time for a round of capital to build the sales team, prove profitability and roll out.
We were brainstorming the usual Texas VC suspects, and Mike’s experiences match my observations that the small to mid-size local VC’s are almost without exception “between rounds” – fully invested in the last fund but not yet raising the next one. This leaves the Texas entrepreneur to work a longer-fused and more complex strategic funding, or go out of state for a traditional VC round. This ongoing supply of good Texas investment deals should eventually result in greater capital availability. We’ll see when.
-John Reed
