The M&A Brief: Bridging the early stage funding gap in events – Exhibition News

GMA interviews Kerry Gumas, board member at Events Venture Group

While Private Equity (PE) has established itself as the dominant force in the industry, investing in established businesses with growth potential, early-stage investment in the events industry has remained scarce. VC firms, another possible source of investment for early stage events have long preferred to fund the tech sector, thinking it’s a better bet.

Enter the Events Venture Group (EVG) – a not-for-profit organisation that has started to fill this gap. EVG is a platform for seasoned events professionals to connect with, learn about and invest in quality early-stage live events companies. Its members have extensive experience across industries and like to help strong entrepreneurs succeed.

GMA spoke with Kerry Gumas of Metacomet Advisors – an EVG Board Member – about the association. He said: “The EVG doesn’t provide solely capital, but strategic and operational advice from a group of founders who have been successful – and made some mistakes too.”

Kerry Gumas, EVG board member

They are quintessential angel investors.

EVG presently has 30 operators/founders and another 50 members, along with a few corporate sponsors. To keep things fair and stay neutral, members must have exited their executive jobs. EVG as an association does not invest directly into companies. Instead, individual members do the investments.

Why now?

Kerry explained that there (has been and continues to be) a gap in the market with no capital solution to take new events from start-up through the first few editions. That’s where EVG comes in.

There are 2 types of independent founders EVG is interested in speaking with:

1. New start-ups: Founders who dream of launching an event or event tech product. Extensive research has been done, but funding to launch is not there.

2. Emerging growth: Founders have successfully launched and held 1-2 events but need help with financing and other resources but are too small to be interesting to a private equity (PE) firm.

100+ pitches have been heard to date. Kerry said: “Even when we decline to fund a project, it’s not a waste of time for the founders. We provide constructive criticism and there’s value in the ideas and critiques put forth. Ultimately, we want them to be successful.”

The process

Founders come to EVG and meet with Marilu Paez, executive director at EVG. They provide pitch decks and material. The investment committee, a subset of 3-4 members with different perspectives, makes an evaluation on whether to advance the deal to the EVG membership.

The evaluation includes whether they believe the product or event can grow in a 3-5 year window, then exit. Can it eventually have at least $500,000 or more in EDIBTA?

Once approved by the investment committee, founders are invited to pitch to EVG’s investor-members. Then the syndication and pooling of capital and support from interested members takes place.

Not only events

“We started out with an intentional focus on events and looked at a fair number of them, but also saw a bunch of event tech and tech enabled solutions too,” Kerry said. “Our second deal with Deep Tech Momentum (DTM), Europe’s largest invite-only growth engine for Deep Tech was shared a couple of weeks ago and just announced an investment into Explori, the leading provider of standardised feedback, benchmarking and intelligence for the global events industry.”

Their first deal was with Quantum World Congress which holds its fourth edition this month (the Consumer Technology Assn. also invested in the Congress).

Exit strategy

Kerry said: “The sale of a company can be daunting, even with an advisor – so we’ll be able to help founders prepare for the rigorous M&A process.” All EVG members have extensive experience in the M&A world, having both bought and sold numerous events (and some tech). We can help set them up for success in the sales process.”

What keeps the EVG members involved besides helping the next generation of event and event tech entrepreneurs and making good investments? He said, “We’ve all been in this business a long time. It’s important to remember that events aren’t just numbers. It’s also about experiences and fun!”

Grimes, McGovern & Associates is a leading lower middle-market Mergers & Acquisitions firm advising media, events and information services businesses globally. See our transactions here.

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