How entrepreneurs came up with Jungle Cents

Like most technology entrepreneurs, Sameer Mehta dreamed of getting a phone call from a Silicon Valley investor who liked his business plan.

Unlike most, he was on spring break in Acapulco, Mexico, when the call finally came.

Mehta, who grew up in Fremont, was a senior at Carnegie Mellon University when he caught investors' attention. Now 23, Mehta and his former college roommate have raised an estimated $1.5 million for a Web-based deals site called Jungle Cents.

Starting from their dorm room, the roommates eventually won funding from Guy Kawasaki, the former Apple executive, and Mark Cuban, the billionaire businessman and owner of the Dallas Mavericks.

Getting there required patience. Before getting the money, Mehta sent out 16,000 e-mails asking prospective investors for funding or advice. Along the way, he and his partner launched and scrapped one business model, then transformed their company entirely.

Today, Mehta and partner Nadir Hyder are settling in to a sparsely furnished South of Market apartment, where they hope to grow Jungle Cents into a major shopping destination. Launched this spring, the site offers deeply discounted gift cards for brands including Starbucks, Best Buy and Petco.

Mehta and Hyder, like many of today's entrepreneurs, took advantage of the lower costs of technology to get their idea off the ground. It was their ability to build a product and generate revenues that sold investors on the idea.

"In the current environment, entrepreneurs can take bold ideas much farther with much less money and actually launch an insane business idea on their own via a website," said venture capitalist Bill Reichert, who runs Garage Technology Ventures with Kawasaki, in an e-mail interview. "If they actually needed money to launch Facebook, (Mark) Zuckerberg and crew would not have won. Now an entrepreneur can actually prove that he has something before he has to ask for money."

First idea failed

The first idea for Jungle Cents involved auctions. People would pay a small amount for one of a limited number of seats to a virtual auction. That gave them the right to bid on items, such as an iPod or television, in tiny increments.

The partners built a prototype last year, eventually attracting more than 4,000 users. The question was how to attract venture capital, which they needed to purchase the items they were putting up for auction.

Mehta looked for someone to introduce him to investors, but without success.

"When you're coming out of college, you don't have introductions," he said. "You have to figure out a way in."

Tech savvy and entrepreneurial spirit run in Mehta's family. His father is an engineer with IBM, and his mother used to run a day care center. His sister, Shital Mysoor, created Generation Orange, which sells environmentally friendly products online.

Last year, Mehta crafted a business plan and began e-mailing investors by the hundreds. He hoped to get one response for every 100 e-mails he sent out. The actual rate was much lower.

"Some weeks I would get no response," Mehta said. "Some weeks I would get two or three, which was a lot."

Venture capitalists are bombarded with pitches. Reichert's firm gets 200 to 400 per month, a number that he said is modestly higher than it was last year. Cuban said he receives up to 20 per day.

Trial and error

Mehta tried more than 30 pitches before he found one that worked. Sometimes he led with the fact that he was in college, hoping to court a mentor. Other times he focused on the business concept and its prospects for success.

"Dear Mr. Kawasaki," Mehta wrote, in the e-mail that eventually led the partners to call Mehta while he was on spring break. "I have a great idea for a business that I have been working on the past year, and have just completed a 5-page executive summary. I was wondering if you had any advice on how to follow through with the project, and acquire funding."

Garage prides itself on reviewing every idea that gets submitted to its partners, Reichert said, and they liked Mehta's pitch.