Archive | February 2013

Angel Profile: Fatih Ozluturk

alleywatch-logoNote: Angel Profiles is a bi-weekly column appearing on AlleyWatch.  
Here’s the original article.

Angel_Profile_Faith_Ozluturk

Why do you angel invest / what got you into it?
I come from an entrepreneurial background.  I’ve started several companies. I also joined small innovative companies. The last one when I left had gotten to be 300 people.  As the companies get bigger, you start to lose some of the interesting ideas and that’s what gets me up in the morning.  When I hear ideas and I wonder “How did they think of this?”-  that makes my day.  When I was getting started, people threw money at me and said, “here’s some money to enable you to get started.”  Now I am in a good place in that some of my previous investments generated some return that I can reinvest now. So I think of angel investing both as making a good investment and as returning to the community as well.

What are some of the more recent investment you have made?
The first is Appy Couple, a wedding app for planning, logistics, guest communication, and a repository of images, notes, memories, etc.  It was a great combination of an “A+ founders” and “A+ idea”.  Great, passionate team with a great idea.  And it’s not just what the app is today but what it can grow into.

The other is TripleLift.  Their starting point was Pinterest, a very popular platform where people share their ideas, likes, and possibly purchase intents.  However, a lot of this information was not being collected or used in a way that would enable companies and brands to act on it, so the amount of value brands get out of these platforms is not at the same magnitude as the interest these platforms get.  Now TripleLift is evolving into an ad feedback tool connecting online advertising with users interests and intentions.  TripleLift is a “Hail Mary pass” at solving this problem for me, but it could be a touchdown.

Was there a startup that you backed that you feel should have hit but didn’t?
I didn’t put money directly in this company but I was invested in it through Entrepreneurs Roundtable Accelerator and I was really surprised that they didn’t go farther.  The company was called Glossy and their idea was to collect all your social network presence – your tweets, your Facebook updates, et. al. – into one site:  your own repository, with a really beautiful interface.  The analytics value of this would have been huge and they would have had my money.  But before I could invest they folded, “pivoted” I should say, and are now in a completely different space.

What was the most surprising lesson you have learned since you started angel investing?
I have a finance education from UPenn and a PhD in Engineering from UMass Amherst.  I ran an investment fund for a few years.  So I think that I know technology and I understand finance.  I ought to be able to pick winning companies consistently and, when you think about it, it is pretty humbling that I can’t.  It’s difficult to admit, but you are never smart enough to guess what a company will or won’t do.  Nobody anticipated how fast a company like Facebook could grow, nor how fast other companies would fold.  I had to learn the ropes like anyone else.

So you can’t just invest in one or two companies and think that you are going to get a predictable return.  You have to invest in a portfolio.  Now while I do invest in individual companies, I am also involved in the ERA.  I’ve invested in all their classes.  In fact, I was ERA’s very first investor, before they were even formed or had any investment.  I really do believe that you need to spread your risk over a lot of companies and if you are a relatively small angel investor, investing in accelerators is a great way to do that.

Any specific advice for entrepreneurs?
Something that good entrepreneurs do consistently that is smart, is that they continue to update you on their progress, even if you passed.  There are companies that I did not invest in, but I get updates on them and now I think that I may invest.  They don’t look at an investor as a transaction.  The more an entrepreneur gives you the sense that they view this as a relationship, the more likely that I would be to invest in them in the future.

Also – and it amazes that some many people cannot do this – every entrepreneur should have a 30 second pitch, a 2 minute pitch, and a 10 minute pitch just nailed down that they can recite in their sleep.  It’s inexcusable if someone cannot get your attention and explain their idea in 30 seconds.

Finally, on the execution side, entrepreneurs should know the difference between perseverance and chasing a bad idea. You should check your assumptions constantly and should not hang on to an idea and waste your time if it is not happening.

Anything entrepreneurs should not do?
I’ll tell you two or three things that, every time I hear them, I just shut my mind.  When people say, “We don’t have competition” and “It’s never been done before.”  That’s just crazy.

Another thing I hear which is actually pretty intellectually insulting is when people say, “This is a $10B market and if I get half a percent, this is a $50M business.”  The fact that it is a huge market doesn’t mean you will be able to squeeze 0.5% out of it.  Size does not guarantee success.  It’s just not true.

What makes you stand out as an angel?
My edge is in two things.  One is that I have equally strong backgrounds in tech and finance, so when I look at opportunities, it’s not just a gut feeling.  I come across a lot of successful entrepreneurs and they invest willy-nilly in companies just because they like the people or it is an idea they never thought of.  That’s great but it’s not going to generate returns.

Also, it helps that I am an entrepreneur.  Currently, I am working on three companies.  One is a partnership but the other two I am basically bootstrapping myself.  So being an investor plus a current entrepreneur in the trenches is a real difference.

Pretend that it’s 2019 and complete this sentence, “[Technology X] is less than 5 years old and now I can’t imagine life without it.”
Let’s take phones.  Haptic technology – tactile feedback – is just getting started.  We think gorilla glass is great but imagine this: by electrical stimulation, you can make glass hard or soft.  You can make the glass click.  If you are dialing numbers, you can make that touchpad appear to your fingertips almost as raised buttons on your screen.  You can even make the glass smooth or rough by electrical stimulation so you can find buttons easier.  People are working on these types of materials technology right now.  Or imagine this – and this is not that far-fetched: imagine your screen itself acting as your phone’s microphone by capturing the vibrations of the glass and that by making the glass vibrate, it can also be the speakers as well!

For more about Fatih Ozluturk:

If you are an active NY-area angel (or know someone who is) and would like to be profiled for AlleyWatch, please contact me here angel@alleywatch.com.

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Angel Profile: Jason Klein

alleywatch-logoNote: Angel Profiles is a bi-weekly column appearing on AlleyWatch
Here’s the original article.

Angel At A Glance-Jason Klein

Why do you angel invest / what got you into it?
I ran a national-local ad network, the Newspaper National Network, for nine years, starting with solely print and building it out into online. I had a lot of experience with tablets, mobile, Real Time Buying, etc. I then started thinking about how I could capitalize on this and what I wanted to do with the next stage of my career. I had made a couple of angel investments through a good friend in the past but I was investing in him; I did little further due diligence. Now I wanted to get more sophisticated about investing. I joined NY Angels and Harvard Business School Angels. It completely changed my conception of angel investing. There is a discipline about it, a best practice. I was surprised by how many accomplished business people are devoting their full time efforts to angel investing.

I am most excited about what is happening in the NY startup community. I am incredibly bullish about the future of the NYC ecosystem. I wouldn’t be as committed to angel investing if I lived in Silicon Valley (which is too crowded) or Boston (which doesn’t have critical mass in my areas of interest). I am very impressed with this generation of entrepreneurs. Many of their peers in the corporate world have an unfortunate sense of entitlement. The 20 and 30 year olds in the startup world are very different, hard working, and passionate.

When/What was your first angel investment? How did it turn out?
My first angel investment since getting serious about it was an e-commerce startup 72Lux. Having come from the publishing industry, I knew 72Lux solved an enormous need: to enable content publishers to build out and control their own e-commerce business easily and quickly. 72Lux has some strong early customers – they just launched Wall Street Journal Select – and have a strong pipeline of first quarter launches, and are preparing for a big push around the 2013 holidays

What investment do you most want to brag about / why?
Certainly 72Lux would be one of them but I’m also very proud of my investment in the Entrepreneurs Roundtable Accelerator. It’s not an individual company. They are an incubator with 10 companies per round and I get a tiny slice of each. Having been to pitch events and demo days throughout 2012, I felt their class was head and shoulders above any of the others I’d seen in NYC. They have the best selection of companies, the best mentorship, the best growth in the companies they backed.

Notable/amusing train wrecks and lessons learned?
The advantage of being early in the process is that I haven’t had any train wrecks so far. I will say this: I am a big student of “The Common Wisdom.” Everyone will say “it’s a numbers game” and there are studies that say you need to make a minimum of 8 investments to hope to have a positive return, maybe more like 15-20 investments. That’s what the historical data say but as far as my investing goes, I don’t like the idea of expecting failure. It’s important to have a clear focus, to invest in companies that have a strong CEO in place, and to have your sights on early M&A exits. Most current exits are via M&A and I’ve been on the other side of that table. I often ask myself if I see this company being an attractive acquisition in a few years.

Startups you backed that should have hit but didn’t / why not?
None yet.

Most humbling experience (relating to angel investing)?
There was one company that I’d been looking at for quite a while. Clearly there was some kind of miscommunication and they topped off their funding much sooner than I had expected so I lost the opportunity to invest.

What’s the smartest thing someone pitching you (or who you invested in) said / did?
I don’t know about “the smartest” but I what really like is when an entrepreneur is incredibly concise in giving his or her pitch. I was trained at McKinsey: give the client the answer and the 3 main supporting points upfront. A truly exceptional pitch would capture my imagination right at the opening. A lot of presenters lose it by going off on a tangent about their background or detailed stats about the industry. While you’ve got everyone’s attention, give me the main kernel upfront and then you can tell the story afterwards.

What’s the dumbest thing?
There have been a few occasions when I shook my head and thought “Gosh, what an annoying individual!” In most cases it’s when they act as if it is a game. They think we’ve seen it all and they need to do something crafty to stand out. Get my attention with an innovative, winning idea, clearly stated and supported.

One other thing: If you are a food startup, bring samples!

What makes you better (e.g., more helpful, more valuable) than the average angel?
I’ve built and grown companies. I’ve started businesses. I’ve bought companies. Even within large companies, I’ve created and overseen small, decentralized business units that were basically startups. I understand how to operate in that environment and bring a lot of direct, relevant experience, particularly in the media and information world. This isn’t always true of other angels with different backgrounds.

Pretend that it’s 2019 and complete this sentence, “[Technology X] is less than 5 years old and now I can’t imagine life without it.”
100% digitally integrated retail. Geo-targeting plus ecommerce is still very early. If you search for a car online, you are cookied and retargeted all over, but this has yet to expand into other sectors. Geo- and digitally-informed retail will grow well beyond banner ads into sophisticated lead gen, deep content integration, and other ways of getting the right offer to precisely the right person at the right place and time.

For more about Jason Klein: 

AngelList
Twitter
Website/blog

If you are an active NY-area angel (or know someone who is) and would like to be profiled for AlleyWatch, please contact me here.