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invest in and help grow.
"In Seattle, there's a role for guys like me where you find little companies that are starting up and they're looking for
some level of investment and some level of help and advice," Gregory said. "You put a little money in their company and you
sit on their board of directors. You kind of bother them and you attempt to get the company going. Hopefully you make money,
but you don't have to actually run the company yourself. You can get in on the action and get the excitement of the start-up
without actually having to sit there and manage all those people," he said.
Gregory went to the economic development leaders of the region and told them of his interest, hoping to find some
interesting prospects. But after a year of looking, he concluded there was no such action in Southern Illinois.
"It's a completely different culture, it turns out, than what we have on the West Coast," he said. "If we started a company
there and needed $5 million, we cheerfully sold 60 percent of the company on day one to investors for the $5 million."
Southern Illinois really doesn't have a culture of accepting investment money, Gregory said.
"People seem to be happy to have 100 percent of nothing rather than 80 percent of something good," he said.
So Gregory approached Southern Illinois' economic development players with the idea of a business plan contest in an effort
to locate some interesting start-up prospects.
Sponsored by the SIUC Office of Economic and Regional Development through Southern Tech, the Southern Illinois
Entrepreneurship Center and Humid Town Ventures LLC - Gregory's investment company - the business plan contest is now about to
begin its third year.
The competition is seeking business plans in the areas of technology, service and manufacturing. The top winner can receive
up to $15,000 in prize money to help it get its business started. The total prize pool of $40,000 is provided by Gregory and
the Illinois Department of Commerce and Economic Opportunity.
In addition, Gregory is willing to provide up to $250,000 in seed capital for the right project. Details can be found at
www.siu.edu/~soangels (see contest rules on page 18).
In spite of his tangible efforts, Gregory has still found it difficult to find hot prospects across Southern Illinois.
"Our culture for business plans here in Southern Illinois is almost non-existent," he said. "What we've seen in Southern
Illinois are product plans. The plans are for a piece of technology that could work.
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"What we do in the big city with these product plans is this: We go out and find a group of investors that is going to help
us move our company forward, and we sell part of the company," Gregory said. "We then use that money to hire a team, and we
put together a business plan that would help you get funded at the level at which you need to be funded."
But that method of operation doesn't work so well in Southern Illinois, according to Gregory.
"If you're out here in the sticks like we are, it's really difficult to get the management team together," he said. "We
just don't have that kind of talent sitting around."
Gregory has concluded that it's necessary to take a different approach in Southern Illinois than in Silicon Valley.
"The investors want a return on their investment, and if you can't show them a management team that pretty much guarantees
them a reasonable shot at things, you better show them a working business," he said.
"We have to build management teams by making smaller investments instead of the multi-million dollar investments," Gregory
added, "so that the management team can show success. That way if it needed the money you would actually have a successful
product and a successful company to base that investment on."
Gregory admitted that it's harder to find angel investors - individuals who are willing to invest in new ideas - in
Southern Illinois than on the West Coast.
"Here in the Midwest, we don't have the public glorification of wealth," he said. "In St. Louis, there are lots of rich
people but it's really hard to tell who they are. When my company went public, they actually published my net worth on the
front page of the business section of the Seattle Times. It's a much more public affair there," he added.
And, he said, it's harder to interest people in technology here.
"Part of it's just cultural," he said. "If you want to buy a farm for a housing development deal, we've got investors lined
up from here to Sunday, but if you want to start a technology company, they just go, 'I don't understand it.'"
Gregory's goal is to bring a little bit of San Jose to Carbondale.
"One of the things I would like to do here in Southern Illinois is to take the impossible feat of getting equity capital
for your company and turn that into a possibility," he said. "I think that would be a good thing for this area."
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