News Article

CoachMePlus CEO talks about the trade-offs of equity fundraising
Date: Oct 12, 2015
Author: Dan Miner
Source: bizjournals ( click here to go to the source)

Featured firm in this article: Virtuvia LLC of Buffalo, NY

CoachMePlus looks to have a strong future as a sports science and data company as it continues to add brand name clients such as the Los Angeles Kings and also tap into the market of U.S. college programs, both big and small.

So the company -- which raised $1 million in venture capital in 2013 -- was facing a choice this year as it considered more outside funding to support its continued growth.

It could have sought a bigger investment round, likely including investors from outside of Buffalo, which is both the traditional and assumed sequence for growing technology companies.

But that move would have come with trade-offs, said Teo Balbach, CoachMePlus' Harvard-educated chief executive officer. It would have meant partnering with venture capitalists who have an aggressive view of how their portfolio companies should proceed.

"They don't want a company that's doing pretty well right now," Balbach said. "They want 10x or bust, 100x or bust. And if they can't see 100x, they're not interested."

CoachMePlus has a different view of its own trajectory, Balbach said. So it took a different pathway -- tapping back into mostly the same crew of local investors who had partipcated in its first round to close a recent $600,000 follow-on investment. In doing so, it punted the decision on a larger fundraising round at least a year down the road, and gave itself more flexibility as it continues to grow, Balbach said.

Balbach knows the investment landscape well. His educational credentials also include an MBA from the Tuck School at Dartmouth University, and he spent 12 years at private equity firm Mercury Capital Partners before he was hired at CoachMePlus.

CoachMePlus "elected to stay with a pool of local investors, and that's proving to be a wise choice that gives us a lot more flexibility down the road and extra balance sheet to handle the growth of the company," he said.

Don't take that to mean CoachMePlus isn't aggressive in its own right. The company is doing "very, very well" right now, according to Balbach, with 10 full-time employees and plans to hire another 10 over the next year, particulary as new clients place more demand on CoachMePlus' software platform.

The company is a semifinalist in the 43North business competition and operates out of the Z80 Labs incubator, whose state-backed fund has contributed to both investment rounds. The latest round also included $75,000 from the Buffalo Angels fund and contributions from individual members of the Angels group.