The Graduates Moving from individual investors to institutional VCs means learning to play by a new set of rules.

By the time Jeff Tannenbaum and Brett Cohen reached the tender age of 25, they were already serial entrepreneurs. While still in college, the pair formed two successful businesses. Then, after what Tannenbaum calls an ill-advised, and ultimately unrequited, stint working as employees, the pair teamed up yet again in 1999 for a new enterprise called EnhanceNow.

Their Philadelphia-based company publishes a digital detective series that's aimed at the young adult market. "We've interwoven traditional books and the Web in a way that makes our books interactive," says Tannenbaum. The pair has developed two books that direct readers to a Web site to search for clues and essentially take on the role of the investigator. Then the reader moves back and forth between the Web and the book to solve the mystery.

The pair gives credit to friends and family, including their fraternity brothers at Sigma Alpha Mu and Tannenbaum's mother, for raising the initial $400,000 to fund their business. But the stakes are higher now. "We need to extend our brand, promote our concept and scale up our operations," says Tannenbaum. "We are beyond the stage where $5,000 here and there can help us." As a result, Tannenbaum and Cohen are now targeting institutional venture investors. Having met and talked with a few of them, Tannenbaum notes dramatic differences between professional and angel investors. And he realizes that to succeed, he and Cohen need to play by a different set of rules.