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.

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.

On Connecting with TechU Angels

One of our goals when building our web and media presence at TechU Angels, was to build a platform that was easy to navigate, is informative, and enables entrepreneurs to understand our process and how to best contact us. We believe in transparency, and try to provide that along every step of the way. We have hopefully been able to achieve that with our new site which was finalized over the last few months.

I invite everyone to check it out and provide us with feedback (both good and bad) using the comments below or by emailing me. Our URL can be found here: www.techuangels.com

On a high level, we recommend that founders interested in connecting with our team, take the opportunity to first read about us and then learn more about our process. If you are a startup founder, and have questions, you can always reach out via our general email address – info@techuangels.com. Someone will get back to you, we always do. When you are ready to engage us in learning more about your startup, we encourage you to fill out our form as a next step:

https://www.techuangels.com/startups/

This form is pretty important, and we do take it very seriously. Therefore we encourage you to take it seriously as it serves as a first impression, and allows us to get to know you and your strategic goals and company better.

On Launching TechU Angels

After a year of planning, in February of 2014 I very quietly launched TechU Angels LLC, a seed and venture investment firm, together with Aaron, Alexander, Lisa, Tony, Eddie and Gautam – all friends that I met through my time at MIT. This group of global all-star angel investors, entrepreneurs, and operators came together because we were all frustrated with the current state of seed funding and felt that true support for entrepreneurs in the early stages was not completely where it needed to be.

From the very beginning we realized that the current angel capital models were broken, and we decided to push the envelope and do things a bit differently, because that is what startups and entrepreneurs need in this current environment. We realized that to best support our startups, we needed to be and act like a startup ourselves. That means continually iterating and innovating at every step.

How are we different from a traditional angel investment group or firm?

  • Global nature – given the advances of technology and video conferencing in general, we don’t believe it makes sense to have an angel group focused on a specific city or region (like most are today). The world is global and so are we. You can find our partners in the thriving startup ecosystems of Boston, San Francisco, New York, Tel Aviv, Singapore, and Mumbai.
  • More efficient due diligence process – although discussions may stretch over a period of time, once we decide we are in on a deal, we aim very strictly to keep our due diligence process to less than 3 weeks. We think that is fair for the entrepreneurs and also for our time. We don’t think 3 to 6 months is right or makes business sense and we hope other angel firms move away from that model.
  • Open and honest feedback, each and every time – we say what we think and feel about your startup because we know that is what will help you in the long run. If we decide not to invest, it’s only fair that we are clear and open about how we feel. There is no point in having you run after us for weeks (or months) if you can be making better use of your time finding folks who are more aligned with what you’re trying to create. If we can share feedback along the way that helps, why not. We want you to succeed regardless.
  • Using technology to make things easier – we may be the only angel investment firm in the world to develop our own due diligence and deal evaluation platform all directly in house. We have built proprietary technology which helps us evaluate deals faster, and more efficiently than others in the space and we think that will give us an added advantage.
  • Ability to invest across stages – we think it’s pretty poor business sense to invest in the seed stage of a firm, but not join the Series A (or B) rounds for those startups that are on a tear. This is called pro-rata rights and we intend to acquire it whenever possible and make good use of our long-term ability to support our startups over several stages. We are building our follow on investment capabilities and we are particularly fortunate to get guidance in this area from late stage investors like Dr. Henry Kressel, a veteran tech investor and MD at Warburg Pincus who serves as one of our advisors.

Over this period (since February), we’ve reviewed and met with over 200 startups and we’re glad to announce that we recently completed our first two investments in Hydration Labs, Inc. (“Refresh”) and ledgerX. You can read more about them on our Investments page and see the fantastic news they’ve garnered from publications like the Wall Street Journal, Dow Jones, International Financial Times and others on our News page.

We were the lead investors in the Refresh round and co-invested with Lightspeed Ventures, Google Ventures, and SV Angels in the ledgerX deal.

We are especially proud that our first two investments came from the MIT ecosystem given our strong ties to the Institute and what MIT has meant to us professionally and personally in our lives. We expect MIT to be the primary (though not sole) focus of where we find good opportunities.

Since many of you will ask, I will share this information here. For those startups who wish to get in touch with us, the best way to get started is by filling out a very brief form at the following link. We try to be as efficient as possible and aim to respond super fast.

Finally, I started this blog a few weeks back with the intention of maintaining it as the one source of news and updates about our work and firm. If you’d like to stay on top of what’s happening with us, please click on the menu bar (up top) and add your email as a subscriber to this blog. I promise not to send clutter.

Thank you for being a part of our journey.