Author: natanel

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

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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!

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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

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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 company, Capio 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!

Accion Systems wins Unicorn Idol Competition at Fortune Brainstorm Conference

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I am proud of all of our portfolio companies at TechU Angels. The founding teams work day and night to build long term, sustainable enterprises that will make a serious impact. As investors, although we can’t take any of the credit, we are in the fortunate position to have a front row seat.

One of our portfolio companies in particular – Accion Systems – seems to be on a very high trajectory. I am proud to share that Natalya Brikner, the founder of Accion was invited to pitch at the Fortune Brainstorm Conference – Unicorn Idol Competition last week, and of the 5 invited companies, came out the winner.

While I’ve long ago learned first-hand that a company’s success isn’t crowned in a competition, I am still extremely excited about the prospects for Accion and can’t be anything but proud. If you aren’t familiar with what they do, I would take the time to read up about them. A quick Google search yields this.

Update: If you’d like to view a video of the event, you may do so using the following link.

MIT Sloan Finance Conference NYC

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Today I had the opportunity to attend the MIT Sloan Finance Conference in NYC at the Mandarin Oriental for a full day conference. I also had the opportunity to attend the prior one which took place two years ago. In stark difference, a big part of this year’s panel discussions focused on innovation, and more specifically with financial technologies, highlighting those coming from MIT Sloan faculty. The focus of the previous event was more on financial engineering and risk management. It’s amazing to see how the world of finance has evolved in the past couple of years. Clearly a big impact being felt by all the progress made in tech and entrepreneurship. Also, the previous conference was taking place in the shadows of the 2008 financial crisis. Hopefully this is a sign that we are passed that crisis.

I’m pretty fortunate to have attended an institution that’s been at the forefront of managing and leading the advancement in tech and innovation. #mitsloan

Note: picture above is of Bob Merton, current MIT Sloan professor, Nobel laureate, and inventor of the Black Scholes model.

TechU Angels in the news

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We received some coverage in the news earlier today. Greg Huang of Xconomy wrote a nice writeup of TechU Angels here. Many thanks to my advisors at TechU and to all the wonderful startups who have agreed to partner with us.

The next wave in Venture Capital investment

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If the last five to seven years of tech innovation will come to be known as the period of advances in social media and wireless connectivity (e.g. Facebook, Twitter, WhatsApp, Instagram, Snapchat, and others), I believe the next period will be known for something much more meaningful. Many are calling the Internet of Things as the next significant wave in tech, but I believe that Artificial Intelligence (or “AI”) will play a bigger part in what’s to come and will usher in a fundamental shift that has the potential to cause the greatest positive disruption and impact to the lives of regular people.

What will be the ultimate impact and what can we expect?

A more productive workforce where everything but the most essential of functions will be outsourced to automated platforms who will be able to complete tasks with similar (or better) efficiency and at a fraction of the cost of low to medium skilled workers.

What types of employees will be most effected by this change?

This is by no means an exhaustive list, but here’s a few functions which stand to be eliminated or significantly reduced; secretaries, taxi cab/limousine drivers, call in center/switchboard operators, factory/assembly line workers, and may even extend to educators. Again, there are probably another 1000 roles which are similar to these which I did not include.

At TechU Angels we have already invested in a company which we expect will play a significant role in this new era. At this stage, it is in stealth mode and we have agreed not to disclose it, but we hope to and will with time. We continue to look for opportunities in the AI space, and I believe will roll the dice when we find an opportunity which fits our criteria.

One such company that is actively playing a role in this space is x.ai which publicly launched several months ago and garnered much attention (note: We are not investors). I have been using this platform to book meetings and their automated secretary Amy Ingram has personally saved me a lot of time in handling a function which needs to be done, takes a lot of time, and which doesn’t require much skill. In my opinion, she has also done a job on par with, or better than any physical person that I could have hired for the role.

Over time, I expect this platform to expand into more difficult tasks, like booking restaurants, arranging work related travel, paying my bills, and more typical secretarial functions like picking up phone calls, having a conversation with the initiator, and routing (or taking a message when appropriate) a call to the appropriate channel. If you haven’t checked out them out yet, I recommend you do, and definitely sign up and take their platform for a test-drive.

In the long run (maybe 5 years or less even), you will likely see platforms like x.ai cutting into the number of secretaries in the workforce, Google self driving cars replacing cab drivers, and natural language processing platforms removing (or significantly reducing) call service operators from the workforce. Best of all, you’ll be able to accomplish all of this at a fraction of the cost, at a higher satisfaction rate over time, and potentially with much less grief and attitude.

We can expect the long term impact to be pretty significant and to create a significant gap between the have’s and have not’s, and ultimately those with higher education and skills will have a more acute, apparent advantage than those who don’t.

It will be interesting to see how this unfold over the next few years.

On Connecting with TechU Angels

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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.

Our investment in Accion Systems

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We closed out our very last investment of 2014 in the final moments. I am proud to announce our investment in Accion Systems, and we are excited to be partnering with Natalya Brikner and Louis Perna, two of the leading budding aerospace entrepreneurs working on building the next generation of propulsion systems for small satellites.

You can learn more about Accion Systems on their website at www.accion-systems.com.

Other investors in the round include FF Science Founders Fund, RRE Ventures, Founder Collective, and several other prominent angels.

Hope to be in touch soon with more investment news and other updates.

Our third investment

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Back in late November, TechU Angels made our third investment. Although we are very excited about the opportunity, we have decided, in concert with the founding team, to keep our participation unannounced for the time being due to competitive and other commercial considerations. What we can tell you is that the team comprises perhaps the world’s leading experts in natural language processing and artificial intelligence, and they are building an application which already has commercial players in the automotive space salivating.

Looking forward to sharing more when the time is ripe. I think you’ll be as excited about it as we are when we do.