Note: Angel Profiles is a bi-weekly column appearing on AlleyWatch.
Randy Adler is the Co-founder and Managing Partner of RK ADLER LLP.
Why do you angel invest?
I love the space. I think it is the opportunity of a lifetime: a true land grab. We are experiencing a transition from the old economy to the new economy in which all things become “tech.” This is a unique point in time. It’s not just a “pop market” that – you ride and get out. It’s not just a paper game.
Overall, I like to invest in companies that actually make gut sense. Right now the most opportunities are in technology, especially B2B startups that are generating revenue by helping old brick and mortars transition to the new economy.
When and what was your first angel investment? How did it turn out?
In tech, my first angel investment was in Lumier. I co-invested alongside SV Angel, Founders Fund and some other notable investors. The founder is a former Microsoft developer, a brilliant young guy named Cullen Dudas. He was recruited at a young age – something like 13. Basically, he created a new operating system to make Windows 8 look more like the old Windows and function better for people who are more familiar the traditional interface.
It’s doing ok so far. Every new company has challenges and this one is no different. I’ve been taking more of an active role in this one in order to help them along. This company has promise because of the high-quality talent, intellectual property and the high quality investors who are involved.
What investment do you most want to brag about and why?
I think I am most proud of my involvement with Vine, the 6-second video clip company that Twitter recently acquired. I was part of the founding team as an advisor and was involved every step of the way from pre-formation through exit. I am very proud of what Dom [Hoffmann], Rus [Yusupov], and Colin [Kroll] – the Vine co-founders – have built.
Any notable or amusing train wrecks?
There was a geo-location based company I invested in during the hype of the B2C, sexy-this-is-going-to-change-the-future, wave in 2011. They were extremely well capitalized but they made a lot of cart-before-the-horse mistakes and their burn was very high. It was a really good lesson to me. Just because you have a company with a lot of money behind it, some great names, and everything else, doesn’t necessarily mean that it is going to be a hit.
There is another very similar story that was a fashion company. Also extremely well capitalized, great VCs involved… and just completely mismanaged. They had a lot of visionaries but were not great day-to-day operators. How do you tell the person whose baby it is that they need to give up their baby? It is a really tough transition.
Were there any companies that you wanted to invest in but couldn’t?
numberFire. I love those guys. I think they are brilliant. They are an ER Accelerator company that I wanted to invest in before they were hot. But I just did not pull the trigger in time. For me, they are the one that got away.
Most humbling experience (relating to angel investing)?
It is a tossup between missing deals because I couldn’t pull the trigger fast enough – I like to take my time and I do more due diligence than some angels – and being passed over in favor of more “strategic” investors. I definitely understand why a startup would want strategic investors and now that I have established more of a name for myself, it is less of an issue.
What do you like to see in a pitch?
I actually get nervous when a founder has an amazing pitch. I think to myself, “What am I missing? This is too good to be true.” You get some tech guys who just do not pitch well and it does not mean it is a bad team or a bad startup. I think it is up the investor to cull out the critical things.
A quality product and a great team means a lot more to me. If the founders are working hard on product, I don’t expect them to be master presenters and memorize Guy Kawasaki’s 10/20/30 rule of PowerPoint. At the stage I invest in, the companies generally do not have a marketing guy on the team… and if they did, I would be worried that their burn was too high.
What makes you better (e.g., more helpful, more valuable) than the average angel?
I understand that there is sometimes going to be bad news and that everyone makes mistakes. It means I can help.
Also, I think I’m uniquely positioned as a Co-founder of one of NYC’s top law firms for startups. I’m also really tuned into the startup community on both the east and west coast.
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.”
The next innovation will be something in the Google Glass realm – hardware based. It will be something like smartphones but even more integrated into our lives, either wearable, embedded, or something that we swallow.
What’s the best way for entrepreneurs to reach out to you?
Through the Interwebs of course. J
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.