On the second Tuesday of every month, angel investors from Walnut Ventures gather on Babson College’s campus.
Investors are interested in startups that are in the early stages of raising capital, said Philip Lachman MBA’15, the group’s treasurer. Typically, entrepreneurs pitch Walnut Ventures beyond their initial backers, the four F’s that Lachman calls family, friends, faculty, and fools. “When you master the four F’s, you get to a place like Walnut Ventures,” he says.
In Babson, three or four entrepreneurs pitch Walnut Ventures during the group’s Tuesday meeting in a conference room on the first floor of the Arthur M. Blank Entrepreneurship Center. In addition to entrepreneurs and investors, these conferences also involve another important group: students.
For Babson students interested in the investment process, Walnut Ventures is offering an open invitation. Students can watch entrepreneurs pitch their startups and then watch as the entrepreneurs leave and investors discuss their ventures behind closed doors. “It’s like a lawyer in the jury room,” Ruckman said. “Students, please listen up.”
Investing in early stage companies involves risk. The possibilities are long. These meetings with Walnut Ventures give students a behind-the-scenes look at startup companies seeking their first big investment on a long and arduous road to success.
“The next Amazon, the next Tesla of the world, they always start somewhere,” Luckman said. “Someone has to write that check first. The first dollar has to come from somewhere.”
long relationship
Walnut Ventures has a long relationship with Babson. The group, founded by investor Ralph Wagner, currently has about 25 members and has held regular meetings in Babson for more than 20 years. “We want to be a resource for Babson,” says Luckman, who is also a senior program manager at ClearMotion, an automotive technology company that works to improve the ride and handling of vehicles.
The group’s meetings have an informal and friendly atmosphere that welcomes entrepreneurs. Ruckman enjoys hearing their ideas. “We’re seeing new concepts, new business models,” he says. Investors understand that pitches can be intimidating, so they try to be helpful. “Even without writing a check, the ecosystem in Boston is very small,” Luckman said. “We may direct them to other groups that may be a better fit.”
Alyssa Keith ’24 is a Babson student who stopped by Tuesday to observe investor activity at Walnut Ventures. She hopes to pursue a career in her environmental, social and governance investments and eventually launch her own business. “I attended not only to learn how sustainable ventures are judged in terms of profitability and opportunity, but also to be better prepared for the long-term goal of owning my own venture. I wanted to,” she says.
As she listened privately to investors after the pitch, she noticed how different investors reflected different concerns and experiences in their evaluations, as well as different attitudes to risk. For example, one investor may be concerned about a lack of experience on a venture company’s board, while another may not consider it a major concern. “It made me think about the approach I wanted to take in my own career,” says Keith.
Just a few minutes to be impressed
Each year, Babson MBA students have the opportunity to intern at Walnut Ventures (Luckman started as an intern with the group), a role currently held by Gillian Campbell MBA’24. She has often seen them work. Campbell said the group is able to understand the nitty-gritty of an entrepreneur’s pitch and ask pointed questions in a short amount of time. “I learned that chatting after pitching is a good sign,” Campbell said. “Silence means the group is likely not interested.”
After the pitch, the group discussion typically centers around one of two things: the viability of the venture and the coachability of the entrepreneur. “Coachability and presence go a long way,” Campbell said. “Even if members don’t agree with the current business model, if they trust the entrepreneur, they will be interested and follow.”
“The next Amazon, the next Tesla of the world, they always start somewhere. Someone has to write that check first. The first dollar has to come from somewhere. ”
Phillip Lachman MBA’15 of Walnut Ventures
Nathan Ruff MBA’23 is an entrepreneur who pitched investors at Walnut Ventures’ Tuesday meeting. He and Anthony Gatti MBA’24 are co-founders of PetPax, a health and wellness company for pets. “We are always looking for opportunities to promote our business and get the word out,” Ruff says.
Ruff has personal experience with the informal nature of meetings, first making his pitch after sitting down and chatting with investors. “It was refreshing because it was a very casual experience,” he says. “I was imagining a more high-stakes atmosphere, but I purposely created a more relaxed atmosphere so that the managers can feel at ease.”
Meetings may have a relaxed atmosphere, but that doesn’t mean entrepreneurs can be unprepared. They need to be confident and ready. For Babson students watching this, that’s a big win. “A lot of times he only has 10 to 20 minutes to make an impression,” Campbell says.
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