Tag Archive | ERA

Angel Profile: Randy Adler

alleywatch-logoNote: Angel Profiles is a bi-weekly column appearing on AlleyWatch.  

Angel At A Glance-Randy Adler

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

They can contact me via email: randolph@rkadler.com. I’m also on LinkedIn and Twitter @RandolphAdler

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 Profile: John Ason

alleywatch-logoNote: Angel Profiles is a bi-weekly column appearing on AlleyWatch.  John’s profile went up a few weeks ago but I haven’t had a chance to post it here until now.  Here’s the original article.

Angel At A Glance-John Ason

What got you into angel investing?
I came out of AT&T Bell Labs, doing bleeding edge technology for 10 years, and then marketing and business management of large telecommunications projects sold overseas.  So when I left, this was a natural extension of what I was doing AT&T.  I made money in the stock market and apply the same discipline to angel investing: sell the losers and double down on the winners.  Getting out of an investment is very difficult for most angels when the company is no longer viable as opposed to putting more money into it.  I also play poker and most angels and entrepreneurs are good poker players.

What was your first angel investment?  How did it turn out?
It’s either Xlibris or TuckerToys, I can’t remember.  Xlibris, the first self publisher on the internet, sold about three years ago at a very nice profit.  TuckerToys makes the Phlatball – over 15M sold, mostly overseas.  TuckerToys produced a couple of great years of dividends and is still in existence.

What investment do you most want to brag about & why?
The two companies I am most famous for are Diapers.com and Bikini.com.  People used to make fun of me for investing in Diapers.com because we were selling diapers on the internet… until Amazon bought it for $545M.  And the really neat part was that I contributed absolutely zero to it, other than money and encouragement.  It was like watching a really good movie.  Marc and Vinit were super operational people and did not need any advice.

I like to mention Bikini.com because that humanizes me as an angel investor as opposed to those money hungry number crunching VCs.  I need to have some fun too!

Notable train wrecks and lessons learned?
I’m proud of some of my train wrecks because I learned things from them.  For example, MakeUsAnOffer was doing exceptionally well and then we got into some legal patent issues.  We were probably in the right but couldn’t survive the lawsuit.  Some things can’t be anticipated or planned for and you just don’t have the resources to handle.

Tell me about the startups that got away?
Never had one that got away. The closest I came to this was a company I wanted where a big VC did not want any other outside investors to get in.  Ultimately, I got in indirectly through a VC fund where I am a limited partner.  In most cases, the startups are just starving for cash; it’s almost always never the issue that it is so oversubscribed that you cannot get in.

Most humbling experience (relating to angel investing)?
Coming from Bell Labs, I assumed I could make anybody a good manager.  But you can’t.  At best you can influence them four or five degrees. You simply can’t make someone a good manager. That was my first humbling experience.

What impresses you about an entrepreneur?
I like someone who is clear, concise, compelling and elegant. I like to see an executive summary that fits on a single page with a lot of white space.  And I love an idea that I have never seen before.  Most ideas are retreads or rehashes.

Hotlist especially made an impression.  They had amassed a massive database on events that people had gone to, were going to, or would be going to and there is a lot of location based services one can offer having that information.  I had researched this area by doing due diligence on a few companies.  Hotlist just had everything buttoned down and I made my decision in 28 minutes.

What turns you off to an entrepreneur?
Whenever people use the word “conservative” or “next generation.”  I have a secret dictionary of these words which earn demerits and can disqualify the entrepreneur.  This is how I “gamify” my investment process.

What makes you different from the average angel?
I like to invest in only industries that I know nothing about and I generally “let the dogs run.”  I offer light overall guidance and try to introduce them to people who can help them.  I am not an invasive investor.

Also, I mentor a lot.  I have mentored companies which I did not invest in because they didn’t need the capital.  I do it pro bono, because most entrepreneurs are nice people and in return I learn from the experience. I currently mentor 10 to 15 companies like this.  They call me every four to six months for some advice or guidance and it’s usually a 15 to 20 minute session so it’s not a real time burner.

Recently, I’ve begun to mentor a number of international companies through Springboard and the Worldwide Investor Network.  I also mentor women entrepreneurs through Astia & Springboard as well as women angel investors within Pipeline FellowshipTopstone Angels, and 37angels.  I have funded 11 female-founded companies, five of women were foreign born.

What financial returns do you target for an angel investment?
I aim for 10x returns.  I say I want it within 3-5 years… although that’s never been achieved.

You have been angel investing for 17 years.  How has it changed since you first started?
There has been a dramatic change over the past two or three years.

  1. The costs of starting a company are close to zero.
  2. The cost of proving the market with landing pages – sign up for the beta, sign up for a newsletter, answer a survey, stuff like that – is also close to zero.  You can prove that there is a market without having a product.
  3. AngelList.  I used to do 1 to 2 deals a year, very painfully.  Finding a company was a big problem.  Now AngelList has close to 19,000 startups on it so finding startups is not an issue.  So is finding investors.  In the past I used to syndicate deals.  In my first 10 years, I knew everyone who invested with me intimately.  Now, I tell my founders to list the company on AngelList with me as an investor and they assemble the rest of the syndicate.  The majority of the other investors in my current deals are people I have never met.
  4. Accelerators like ERADreamIt and TechStars are producing large numbers of high quality, fundable companies.
  5. Super angels and micro VCs like John Frankel’s ff Ventures have a lot of cash for angel level companies, assisting in the fundraising process in a very positive way.
  6. Deal size.  The average round until about a few years ago was $250K-$275K.  It is now close to $650K.  Many of these companies will skip their A round.
  7. International.  The biggest response to my website comes from overseas asking me how they can invest in my companies and be angels in general.  I received four investments into my companies.  I have also received interest from foreign government organizations and universities on how to foster startup and angel ecosystems.  We are also seeing a large number of foreign companies seeking funding.

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.”
Brainwave chips.  There are several startups that let you control your computers with brainwaves and they are starting to get a little bit of traction.  They have various devices that go over your head and with this one can control a device that provides input to a computer.  As this industry matures miniaturization will occur that will lead to a brain chip.

Will they really implant these chips in their heads?
Why not?  I have a defibrillator.  I don’t want to carry one around so I had it implanted.  They could put it on sunglasses, but fashion will win out and they will ultimately be implants.

What’s the best way for entrepreneurs to reach out to you?
Email me at ason@comcast.net but read my website first!

Also, check me out on AngelListLinkedinTwitterPinterestSplingTip or Skip, & PRESSi.

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 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.

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. 

Wizpert: Is There Demand for Experts On-Demand?

Wizpert

It took a while, but Wizpert really grew on me.

Disclosure: Wizpert is an ERA company. I am a mentor for ERA but have not advised Wizpert nor do I have a financial stake in ERA. As always, I may invest in Wizpert but for now at least, I have no skin in the game.

In brief, Wizpert instantly connects you with experts. Let’s say you…

  • are trying to get back in shape but are not sure what exercise routine is right for you.
  • have been trying to sleep-train your child but no matter what you do, he won’t go to sleep on his own.
  • want to make social media work for your business but you don’t know where to start.

You could spend hours searching for and wading through volumes of free and often contradictory advice on the web but wouldn’t it be great if you could just pick up the phone and get instant, clear, concise advice from an expert in that field? Wizpert thinks so.

There have been past attempts at creating directories of experts but they all generally worked like this:

  1. You read through a bunch of experts’ bios and try to pick one you think is qualified.
  2. That expert is rarely available right away so you either try to book an appointment or you go back to step  1.

Wizpert, currently in beta, presents you with a list of pre-qualified experts who are available right now. You don’t need to read though pages and pages of bios – each “Wizpert” has only a 140 character description! – you simply pick an expert from the short list Wizpert provides.

Wizpert is free for now but will roll out paid advice within the next few months. They expect most experts will charge $0.50 – $2.00 per minute. Wizpert keeps 25% of the revenue.

The first time I saw Wizpert, to be candid,  I was not exactly stoked. Wizpert needs a lot of traffic and a good conversion rate to succeed. This former often requires a large marketing budget and the latter is a crap shoot. Wizpert actually failed my first screen but stuck in my mind as a dark horse to watch. Fortunately, I ran into the co-founder, Michael Weinberg (@Michael_Wizpert), again recently and I liked what I heard.

Obvious question #1: How does Wizpert recruit experts?

When they open up a new category, they manually recruit the first few experts, focusing especially on experts with highly trafficked blogs. For the next wave of experts, they run a paid email marketing campaign. After that, word of mouth kicks in. In parallel, Wizpert has inked strategic alliances with other organizations of potential experts to help populate certain verticals.

Wizpert currently has over 1,100 experts and the cost per expert acquired is surprisingly low, almost trivial.

But how does Wizpert qualify its experts? Each would-be expert must answer a number of calls and get sufficiently highly rated by users before they can charge for their time. Once approved by Wizpert, the expert’s ranking (viz., likelihood to be recommended to a user) is determined by their rating, availability, and other factors. This winnows out the bad ones and keeps the best ones busy.

Obvious question #2: How does Wizpert acquire users?

Wizpert widget

Very cleverly. Each expert can put a Wizpert widget on his blog that their readers can click on to get live expert advice. If he is online when they click, he gets the call and makes some money. If not, Wizpert queues up some experts who are available. In fact, having a Wizpert widget on their blog is almost like a seal of approval or badge of honor, so much so that some experts have asked if they can put one on even if they intend to take no calls themselves.

In effect, each expert Wizpert acquires brings with him a slew of potential users. So other than a small Google AdWords campaign to kickstart each a new category, Wizpert spends virtually nothing on user acquisition.

With the specter of a money pit marketing budget put to rest, that leaves conversion rates. In the month since beta launch, Wizpert says that nearly 1 in 4 users who come to their site contact an expert and over 80% of these users rate the experts with whom they spoke positively. Many of these users have made multiple calls.

What these numbers will look like when Wizpert activates the payment mechanism is a legit concern. The categories that are currently performing best for them include Health & Wellness, Parenting, Relationships, and Social media.  These are all categories where people are used to paying for advice offline so it’s not a crazy bet that this will stay true for online.

So ultimately it comes down to one irreducible question: Will people pay to speak to Wizpert’s experts? There’s only one way to find out.

Website: http://www.wizpert.com
Twitter: @Wizpert
AngelList: http://angel.co/wizpert-1