WASHINGTON – Marshall W. Newman is pacing nervously up and down the hallway of the Washington Convention Center.
Soon, the Upper Marlboro business owner will be in a small, closed room, trying to persuade a group of venture capital analysts to invest $2.5 million in his truck-maintenance company, Marshall’s Truck Spa.
Newman, who is black, has pitched his company to venture capitalists before without success, something he feels has to do with his race and the fact that his business is far removed from the high-tech world.
But he was more confident Thursday as he waited for his 30 minutes in the “deal room”: Newman knew that the venture capitalists came here to meet with minority entrepreneurs like himself.
Newman was one of the 13 minority business owners that black lawmakers hoped to link with venture capitalists this week as part of the annual conference of the Congressional Black Caucus.
The Milken Institute, a nonprofit economic think-tank, recently reported that minority business has only about $2 billion of the total $85 billion in equity capital currently available. The caucus hopes to close that gap with its “deal room,” which brought together investors and entrepreneurs from as far away as Boston and New York.
Some of those businessmen said they had soured on deal-making before Thursday’s event.
“We’ve had some of our plans returned with discriminatory comments written all over it,” said John. L Huggins, Jr., chairman and president of Broadband Connect Inc., another Maryland firm that made a pitch Thursday.
“There was a point in time when we decided to stop dealing with venture capitalists because of the discrimination,” said Huggins, who is black. “But, we soon realized that to succeed in our business, we have to deal with them.”
A venture capital analyst with the Maryland Department of Business and Economic Development said he was not aware of such discrimination in the markets. Raymar B. Dizon said his department is open to any business of any color, as long as it is technology oriented.
“For us business is business,” Dizon said. “We will be open and receptive to anybody that is interested in setting up their business in this state.”
That was exactly the kind of encouragement that Huggins was hoping to hear as he began getting geared up for his presentation.
Dimming the lights and with a broad smile on his face, the entrepreneur turned on the projector and looked around the room. Huggins knew he had the attention of all present. Slowly, but steadily, he began his presentation.
He spoke first of the market potential for Broadband Connect, which aims to ease the crunch in broadband capacity by designing, building and leasing bandwidth on all-fiberoptic “open access” networks. He talked next about his firm’s management team, the targeted customers, the revenue potential, and the $3 million that Broadband Connect needs to acquire a network cable installation company to help its growth.
By the time the lights came back up, Huggins knew that this could well be the start of a new association with venture capitalists.
“This was a great chance and a great opportunity for minorities like us,” he said. “I have got some positive feedback already.
“The ‘deal room’ has given us a nice platform,” Huggins said. “They have to take this concept around the country. They will get a lot of participation.”
What about Marshall?
“The analysts are going to distribute my idea to other capital raisers,” he said. “I am pretty sure something will come out of it. I am glad I got this opportunity. It was great”
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