TechU Angels 2017 Investment Thesis

In annual tradition, I am sharing our investment thesis for 2017. I find the process of articulating our thesis allows us to envision the opportunities we find most compelling, and also to communicate in a transparent manner our goals and objectives to entrepreneurs before they reach out so they can assess fit.

Thesis: We invest in hard tech startups led by exceptional founders that solve real problems in key markets.

What it means in more detail:

  • Hard tech – the following TechCrunch article (from Nov 2016) does a great job of explaining hard tech. This has been our focus since we launched and we’ve been doing it way before it became popular. Just look at our portfolio companies if you would like some good examples. I would also add that we typically look to see if your technology incorporates some type of ‘secret sauce.’ What do you know that others don’t and what makes your technology novel and difficult to replicate by others?
  • Exceptional founders – we back folks with visionary leadership tendencies, strong technical expertise, and with an innate ability to attract world class talent to their team. Additionally, they are effective communicators, with high integrity, and culture oriented. We invest in people we like (and who are liked by others) and those who value teamwork and camaraderie.
  • Solve real problems in key markets – your startup needs to be solving a problem that other people or companies are having a hard time grappling with. You need to do it better, faster, and more efficiently than existing solutions and the target market needs to be compelling.

In terms of stage, we have primarily focused on investing at the seed and angel stage which is our sweet spot — although from time-to-time we will consider series A opportunities we find enticing because we really like the founders, feel we can help them in a unique way, or find the opportunity too compelling to pass up.

Some themes that we find exciting in 2017, include (non comprehensive list):

  1. Automation – robotics, artificial intelligence, machine learning, computer vision
  2. Personal healthcare personalized medicine, supplements, and beauty care
  3. Wearables – performance gear and sensor integrated “smart” clothing and devices
  4. Education – personalized, affordable, scalable education for the masses
  5. IoT – internet connected devices and tools
  6. Financial services -generally openminded about this space
  7. Space technologies – generally openminded about this space
  8. Food tech – tech-enabled synthetic or natural foods which are healthier, more sustainable, and can be mass produced

If you would like to reach out to get the conversation going, I suggest first exploring your network to find common connections who can make a personal introduction. Another viable option is to reach out using our online form: www.techuangels.com/contact. I personally check each submission daily and circle back promptly to provide our assessment about potential next steps.

I’m always happy to receive feedback or learn from others. If there is something you think we missed or can articulate better please let me know. Also feel free to reach out with any questions or any other suggestions.

Back to work!

Welcoming Ayar Labs

I am happy to introduce our newest portfolio company — Ayar Labs — to the TechU family. We are very excited about this investment, and for the opportunity to partner with Alex, Chen, Mark, and the entire Ayar Labs team.

What they do:
Ayar Labs has developed a proprietary method to integrate optical transceivers into computer chips to enable data to be transmitted using light waves. This process can dramatically boost the efficiency of traditional computing by replacing existing chips which employ traditional copper wires that rely on electricity. By replacing electricity with light, their technology significantly reduces energy costs while increasing bandwidth for customers running wholesale scale data centers or for supercomputers.

Their technology, which has been developed over a decade’s worth of R&D at institutions like MIT, UC Berkeley, and the University of Colorado and with the support of more than $20MM in DARPA grants, has been captured across over 10 different patents.

Why we like them:
Their technology very much fits into our thesis. The company is led by an exceptional team whose domain level expertise is perhaps unparalleled in the industry. Given the proprietary nature of their technology there is also a high barrier-to-entry and they definitely posses a secret sauce which is a prerequisite.

I also personally believe that timing will play a positive role in their potential success. The energy and expense associated with the powering of data centers globally is immense, and I believe many different players in the ecosystem will be strongly aligned in supporting this technology to take hold. Already many of the largest players in the ecosystem have been reaching out to establish partnerships.
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As always, if you or any of your colleagues are in a position to serve as a strategic partner to Ayar Labs, feel free to reach out to me for an introduction to the founders.

Follow on investments

A big part of our strategy at TechU Angels is to invest in companies early in their lifecycle and continue supporting the founders afterwards in setting their trajectory towards an early sustained path to success. As part of this strategy, we seek pro-rata rights so we can participate in their continued growth throughout their lifecycle.

Over the past few months we’ve had several such examples that we are proud to aknowledge. This includes participating in Bevi’s impressive series A round led by Horizons Ventures and more recently Accion Systems’ robust series A round led by Shasta Ventures. Beyond these milestones, what we are most excited about is seeing our portfolio company founders continually meeting their aggressive growth targets and benchmarks which they set out for themselves.

We are committed to continuing our active support for our portfolio companies and look forward to sharing similar announcements as we grow our firm.

Announcing our investment in WhoKnows

I’m happy to introduce a new portfolio company to the TechU Angels family. We recently made an investment in WhoKnows, Inc. — we are excited by what they are building, their vision, and the team.

What they do:
WhoKnows is leading the next evolution of enterprise collaboration tools by allowing companies to understand and gain deep insight into the professional relationships and the knowledge base possessed by their employees, information which when shared internally, enables and empowers their employee base to accelerate growth, sales, and product development. They are building the next generation of collaboration software using machine learning and contextual recommendations.

Here’s a quick teaser video:

How it works:
They do this through a proprietary patented discovery platform that, when placed in an office environment, dramatically increases engagement throughout the organization. They can then contextually recommend the right colleague through various plugin tools (Google search, LinkedIn, WhoKnows App, Salesforce, Jive, Quora, Bing, etc.), so employees don’t have to change how they work.

Also, since I know you would ask, setting up the platform only takes a couple of minutes (at the individual user level), so entire multinational corporations can have their entire employee base up and running in less than a few hours.

Chris and the team plan on some exciting updates in the next few months. I’m looking forward to updating everyone in due time. If you’re interested in a demo for your company, let me know and I’ll be glad to connect you.

2016 – TechU Angels Investment Thesis v1.0 – what is your ‘secret sauce’?

I’d like to usher in 2016 by trying something new. Although as a young venture firm, we are rapidly evolving, growing, and adapting to new realities, our core fundamentals and investment thesis have remained pretty steady throughout our existence. While some adaptation in the future is to be expected, I would like to articulate our current investment thesis and the types (non-exhaustive list) of companies we seek out for our portfolio. This should hopefully steer companies that fit our profile towards reaching out, yet at the same time allow those who may not have a strong alignment to focus their valuable time on finding the right partners. I will attempt to do this on a yearly basis in the interests of transparency and full communication, and also to keep track of our evolvement over time.

Our Investment Thesis (in concise form):

Investing in exceptional, disciplined teams who are building robust, highly technical platforms that have the capability of impacting a major global industry. In all cases, these teams posses a secret sauce that is not readily attainable by others. In most cases, these teams are world leading experts in their field.

We have built TechU Angels as a generalist firm, which means we look at a wide scope of opportunities. We are agnostic as to the location, demographic profile, or backgrounds of the teams. We like taking big bets and share a long term horizon with our portfolio companies (e.g. we are not focused on quick returns, neither are our L.P.s). Because of our partners’ affiliation with MIT we are very keen on supporting opportunities coming out of the Institute and related ecosystems, though we frequently look outside for investments and it is not a pre-requisite that startups have MIT affiliated founders.

The entrepreneurs that we back have all the following traits:

  1. Integrity
  2. Reputation for quality work
  3. Highly disciplined, thoughtful, and coachable
  4. Strong passion and personal drive to solve the particular problem their startups are attempting to address
  5. Team oriented
  6. Reasonable in their expectations
  7. Approaching problems with an open mind – willing to quickly iterate and pivot as/if situations warrants

With this in mind there are several sectors which we are actively seeking opportunities in 2016 and beyond. If you are building a technology platform in any of these areas, we want to talk to you. This is not an exhaustive list by any means, and if you feel like your startup fits our criteria (even though it’s not in a listed category below) you should definitely reach out and we can provide a quick yes or no:

  • Financial services – specifically those that promote transparency, information accessibility, and which provide advanced decision making capabilities to the masses. Key focus here is on leveling the playing field and disrupting stale banking services.
  • Artificial intelligence – especially platforms focused on gathering data and information to enable efficient and rapid decision making and which automate mundane, repeatable tasks so that people/companies can focus more of their time on value-added activities.
  • Space – we are generally curious about the space space (pun intended) and are approaching this sector with an open mind.
  • Science that will further human health, condition, and understanding – especially companies building atop the CRISPER platform, those focused on gut bacteria health, or which provide a data driven approach to leading/living a healthy lifestyle. Anything related to increasing access and output of healthy, organic, and non GMO based consumable foods to the masses. We believe more information will begin coming to light in 2016 about the dangers of pesticides and antibiotics in mass scale food-products and this will precipitate rapid growth/demand in these markets.
  • Education – platforms which make democratize education and which will provide an automated, customized experience that is uniquely tuned to the learning habits of the individual and which increase efficiency throughout the lifetime using big data. More specifically, we believe the tutoring industry which has only been available to the affluent is due for major disruption.
  • Internet of things – particular interest in IoT startups building infrastructure platforms that enable an array of IoT startups to take hold and build on top of.
  • The blockchain – we are seeking companies building Blockchain 2.0 types of platforms.

If you would like to reach out to engage us in conversation, I would recommend you either get an intro from someone we trust (portfolio company founders or others in the ecosystem), or that you fill out our online form at www.techuangels.com/startups. I personally check submissions daily and try to respond within 24 hours or less.

Pro tip: I typically get many LinkedIn invitations on a daily basis. Sending a LinkedIn invite to me personally (without context or a prior relationship) is a bad idea as I only accept invitations from people that I know personally or have previously met. The one exception is for invitations from folks within the MIT or MIT Sloan community which I automatically accept.

Additional note: I have labeled this post as a v1.0 as I expect to update it at various points throughout the year as we add new categories to our watch list or as we refine our thesis.

Bevi with a Bang!

You may have seen a lot of press on our portfolio company Bevi recently. That is because they just closed a $6.5M funding round led by Horizons Ventures, Li Ka Shing’s personal venture investment firm. They were picked up with coverage on VentureBeat, Xconomy, BostInno, Boston Business Journal, and others.

In case you aren’t familiar with what they do, Bevi has invented and operates proprietary internet-connected hydration machines that dispense customized drinks at the office. These machines allow the user to mix and match flavors and water carbonation levels. Their proprietary technology allows seamless inventory management from their home base and enables them to track key data including; usage, machine performance, inventory levels, and user preferences and trends over time. Target customers include medium to large offices and they compare favorably (both from a product and price standpoint) with the traditional water cooler.

They don’t just intend to compete with the water cooler, but they hope to replace it altogether. It will happen faster than you think, mark my words. Frankly, I don’t think it’s a very fair fight. While being priced similarly to the water cooler, the internet enabled capabilities of the Bevi machine allow seamless and remote monitoring of the units while providing endless customization opportunities. As a result of this automation, office managers have less to think about, as Bevi knows when exactly to service and repair their machines, and users can come to any Bevi machine across the world and expect to receive a consistent, quality, and healthy experience time-after-time. If you’re curious what the machines look like, head over to their website which contains a video on the cover page – www.bevi.co.

I am personally very proud of what Sean, Frank, and Eliza (and the rest of the talented team) were able to accomplish in such a short period of time. It has been just over a year since we completed our investment in the company and I can tell you that they’ve made some great strides in building a top quality platform that is reliable, appealing, and pretty much rocks.

I have a feeling this company will be around in the public mind and attention for a very long time to come. They are everything that is right about IoT startups, and bring great disruption to a stale beverage industry which has had very little innovation in the last 30 or 40 years. Their attention to their customers’ needs is unparalleled and their ability to provide a customized experience is what eventually leads to extreme loyalty from their users.

Finally, I would just like to add how much I’ve personally enjoyed working with and learning from the Bevi team. For a period of about 6 months between Q4 – 2014 and Q2 – 2015 I served as a Board Observer for the company. That responsibility entailed many meetings with Sean (the CEO) that ran very late into the night, as we discussed various strategic issues affecting the company. I can’t say that I’ve met many other people who are as thoughtful, balanced, and creative as Sean. He embodies all the traits we seek when evaluating founders of startups we want to invest in.

Looking forward for what the future has planned for Bevi and very excited about continuing our partnership with the team.

TechU Portfolio Company News

It’s been an incredible few weeks for several TechU portfolio companies, and I wanted to pass along some updates on the wonderful progress that they have been making.

When we first invested in LedgerX back in Nov 2014, we realized that their long and arduous process to obtain CFTC registration would not be easy. Despite the challenges of attempting to become the first regulated options exchange for Bitcoin and the high regulatory hurdles that such a process would entail, the team, technology, and mission proved to be up for the challenge. I am proud to report that earlier in September, the CFTC granted LedgerX temporary registration as a Swap Execution Facility (more here), one of the key steps in the registration process. We are very proud of Paul, Juthica, and the rest of the LedgerX team and impressed by this substantial milestone achievement.

In further news, our third portfolio companyCapio Inc., which is at the forefront of building natural language processing technologies that will one day power communications between humans and automobiles has been recognized by the LA Auto Show’s Connected Car Expo as a Top Ten Startup (more here). We are very impressed by Capio’s progress and extremely proud of Ian, Tony, and the rest of the team.

Upwards and onwards!