March 24, 1998

"ALLEY TO THE VALLEY": A MODEST SUCCESS

When last we left New York-based Snickelways Interactive ("A Silicon Alley Pitch To the Valley: Snickelways Gears Up," Mar. 16) the company was prepping for the first-ever "Alley to the Valley" conference, a two-day confab whose purpose was to show off 24 New York "Silicon Alley" new media companies to Silicon Valley's vaunted venture-capital community.

While billions of dollars flow into California-based technology startups, New York firms still receive but a trickle in relative terms. The conference was thus billed as a "coming out" party for the Alley denizens, many of whom claim they have historically been slighted for their East Coast origins.

Snickelways -- which builds electronic commerce Web sites and E-commerce software -- went to the West Coast conference in search of $5 million in new funding. How did the company, and the conference, fare? Neither hit a home run, but neither Snickelways nor the Alley is out of the game just yet, say those who attended.

"No one gets money on the spot at these things," concedes Snickelways chief financial officer Michel Meyer. "The main point is that we're starting to build a network." About 30 people listened in on his company's half-hour presentation, a mix of straight-ahead strategizing and big-screen computer graphics. That helped generate four meetings with investment banks, and a brief audience with Ann Winblad of the well-known Silicon Valley software investing firm Hummer Winblad Venture Partners. "It helps to meet face-to-face," says Meyer.

That isn't the only advantage of touching base in the cash-rich Valley: "Deals are a little larger out here," recounts Meyer, speaking via cellular phone from a California freeway. "We're looking for five million, and one of the guys asked, 'how about ten?'"

It will take months for Snickelways to close on any possible investment deals, Meyer said. Meanwhile, he is crediting the conference with helping the company land new business and also line up strategic partners.

Anna Wheatley, editor-in-chief of AlleyCat News, the New York financial newsletter that sponsored the conference, downplays the notion that the first "Alley to the Valley" should result in an instant investing bonanza. For her, it was a way of "opening the dialogue" to help East Coast and West Coast techies get over "their regional differences."

John Siracuse, who attended the conference and heads an Internet investment group for NationsBanc Montgomery Securities in Boston, says the Alley has yet to earn the complete respect of Valley investors, many of whom have plenty of deals to choose from in their own backyard. "The attendance wasn't what I expected," he says of the conference.

"The Valley's radar is certainly up," adds Siracuse. "But one of the things the Alley needs is a big success story. When that happens... the Alley will stand on its own merits."

By Dennis Berman, Staff Reporter, Business Week Online