Starting a business often involves equal parts of hard work, drive, ingenuity and the desire to fulfill a personal dream. But even if an entrepreneur possesses all of these qualities, the venture can be challenged by one all-important ingredient: capital. If there's not enough, the business can't take off.

That's where Tim Cartwright's group can help.

Cartwright is president of the 75-member Gulf Coast Venture Forum (GCVF), a Naples-based nonprofit organization that provides a conduit between new and emerging businesses and angel investors. Each month, a screening committee analyzes several business plans and chooses two to be presented before the forum.

Questions-and lots of them-are asked by audience members, some of whom may be current or retired CEOs, to learn more about the venture. When it's over, that's when magic just might happen.

Forum members, based on their response to the pitch, could choose to pursue an investment with the budding company on their own; the forum itself does not act as a securities broker-dealer, securities exchange or investment advisor.

Professionally, Cartwright is managing director of Compass Advisory Group LLC in Naples, a business-strategy consulting firm he founded in 2003 that serves privately held small- to middle-market companies.

Cartwright discussed the venture forum and other investment-related topics in a recent interview.

Please explain more about the Gulf Coast Venture Forum.

Cartwright: The purpose of the forum is to promote the success of Southwest Florida's new and emerging businesses by bringing together the best entrepreneurs, private equity groups, venture capital firms and angel investors, all into one forum. At the forum, we encourage the participation of investors who commit their growth capital as well as intellectual capital, which would be as mentors for these new companies.

What qualifications do forum members

typically possess?

Cartwright: They are accredited investors who have a net worth of $1 million or more. The Securities and Exchange Commission [assumes that] if somebody has amassed a net worth of $1 million or more, then they're probably a sophisticated [investor]. If they do not have a net worth of $1 million dollars, they're probably not sophisticated and will not understand the risk of investing in a private stock transaction.

If the business plan meets your criteria, does the company have to be operational?

Cartwright: [Yes.] Somebody has to be working at this full-time and that means they may or may not be drawing a salary. But they do have to have some expense-either an executive office suite or they bought a computer or they have attorneys who have reviewed documents. They should be spending capital.

What amounts are the presenters asking for?

Cartwright: The typical companies in the GCVF are looking for anywhere from $100,000 up to $15 million. We had one that was [looking for] $20 million. In aggregate, our members have invested some $1.5 million in early-stage deals over the last three years.

What kind of returns do members expect?

Cartwright: Our investors are looking for three to five times their initial investment in three to five years. Typically you've got to have some sort of exit strategy or liquidity event, meaning the company raises the capital, grows successful and is acquired by another firm, goes public, which is very rare, or a venture capital firm or private equity group comes in and will offer to take out the individual investors and buy their stock. Everybody is very aggressive and pretty optimistic when companies are starting out, and it usually takes more time to achieve the goals-usually seven to 10 years out.

Can you name a success story?

Cartwright: An example is Neogenomics, a cancer lab testing facility in Fort Myers. It trades over the counter. They came and did a presentation to our group. They offered an opportunity to purchase into a private offering at 32 cents [per share]. Probably the most recent quote I've seen for Neogenomics was $1.60 [per share]-in less than two years. This is an example of making five times your money if you buy in and exit.

Are some ventures a harder sell than others?

Cartwright: A service company is a more difficult investment than a product company because the assets are mobile. With a product company you typically need heavy equipment-and that type of equipment doesn't walk out the door every night. But anything that has recurring revenue or annual maintenance contracts, even if it is a service business, is easier to fund.

A recent MoneyTree study showed that venture capital activity has increased across the country but has been declining in Florida. Why?

Cartwright: I don't know the data behind the survey, but I would guess that states that you would typically think of for venture-capital spending in new and emerging growth companies have started to outpace Florida again or have accelerated back to where they were before. Your centers of entrepreneurialism, your centers of high technology, like the Route 128 circle in Boston and Sand Hill Road out in California, are centers of venture capital and entrepreneurial activity. High-tech and biotech activity in those states are always going to lead and they're going to be bellwether states, and Florida is going to be more of a follower.

What's the typical cycle for new businesses looking for money?

Cartwright: In angel investing, you look at it on a continuum. Seed capital is kind of where it starts, and seed capital is typically provided by the entrepreneur or the family of the entrepreneur or the friends of the entrepreneur, and that's $10,000, $25,000, maybe $50,000. They may say later, "We're really starting to get favorable reaction from the marketplace. We can actually produce this product or service, but I've got to get more capital in here because if one of these customers decides to order from me, I can't fulfill that order." That's when they typically will turn to angel investors. Angel investors will come in the first time [that] outside money comes in that's not related to the entrepreneur.

How did the dot-com bust affect angel

investing?

Cartwright: What I'm seeing is that the angel investors are becoming more sophisticated. They probably put money into the dot-com bubble and lost it, and they had a bitter pill to swallow. They licked their wounds for a while. But they learned their lessons from investing in the dot-com bubble and they're doing smarter things, like asking for board representation. They want to be on the board, to have some say in the company; whereas in the dot-com days, people were just throwing money at dot-coms, and they really didn't understand what they were getting into. They were just happy be able to say at a cocktail party that they had invested in a dot-com company that's going to be the next Amazon.

Is the Internet a good place to invest?

Cartwright: Right now is the best time to be investing in Internet businesses. It's a learning-curve situation. We're seven years out from the dot-com craze and the bursting of the bubble, but the consumer has moved up the learning curve. Not only are people buying airline tickets, they're ordering books from Amazon.com. They're ordering Christmas gifts from Target.com instead of going to the Target store [and] downloading music onto their iPods instead of going to the record store.

Are there new investment opportunities

emerging locally?

Cartwright: Interestingly, over the last 12 months or so, the real estate bubble has burst for the speculators/investors. With real estate out of favor, technology has come back-and come back strong.

The interesting linkage is that the end of the tech bubble was the start of the latest run-up in real estate, and now they are switching places. Medical and healthcare [start-ups] always generate interest and consistently show up. I'm not sure if this is the tip of the iceberg or not, but last month, the GCVF featured a Florida-based startup company focused on writing home-insurance policies.

It sounds strange that, with all the problems and issues with the home-insurance industry in Florida, a new company would enter this market. I think it is one of the great characteristics of entrepreneurship: Chaos creates opportunity and someone steps forward and says, "I have a product or service to address that need."