Tag: Natanel Barookhian

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.

On Launching TechU Angels

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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.