I get many requests from early stage companies to give them advice. It is kind of strange since I have been retired (rewired) for about then years. I always try to be responsive and polite. But it is not working out for me. I am spending too much time and getting too little out of it. So the purpose of this post is to reposition myself.
I am not an Angle Investor
First of all, I am not an Angel Investor. Generally, I think that Angel investing is not a smart thing to do at least from the perspective of the Angel Investor. When I left Intel in 1999 as Vice President of Corp. Business Development and one of senior people in Intel Capital, an organization which I co-founded, I decided to set up my own small angel fund. I put some money into the fund and made about twenty investments. Of the twenty, only one paid off. I lost money in all the rest! Of course, it turns out that 1999 was a bad year to be investing. Fortunately, one investment went public before the bubble burst paid for all the others and more. I learned a valuable lesson. It is hard to make money as an Angel Investor. You can’t put in the time to really understand the company given the typical size of such investment. You certainly cannot pay for lawyers and accountants. So you rely on others to do that. Then if they company raises money from VC’s in a down round, you can find yourself wiped out. VC call it “crammed down”.
I am not a Path to Angel Investors and Venture Capitalists
I don’t personally know Angel Investors. There seems to be centers for this in places like in Silicon Valley,NYC and other major cities. Groups of people get together to hear pitches from young companies. I guess they have a good time. It seems more like a sport then serious financial investing. I don’t know. I have never been to such meet ups.
While I know some of the leading VC’s from my days at Intel, I don’t know the bulk of current VC’s and particularly the younger partners and associates that might look at the typical early stage deal. In fact, these people have never heard of me and were probably in high school when I was at my prime. When I contact my former colleagues in venture capital they always say they are glad to hear from me and will have someone in their organization look at the deal but either they just trash the email then and there or send it to someone that trashes it. I never hear back.
Frankly, I don’t know a lot about fund raising. I never did it. I am not an entrepenuer and I never started a company where I had to raise money. I was a venture investor for a major corporation, Intel. I actually saw my job as strategic, and while we made a great deal of money, the real measurement was the impact the investments had on Intel.
I am no Longer a Business Development Person
There was a time when I could get to almost anyone. In particular, I had access to every CEO in the media and telecommunications industries as well as the CEO’s of all the important tech companies. For seven years I went to the Allen&CO Sun Valley Conference. Some of these CEOs are still in place and maybe would take a call from me but I don’t make those calls. And the CEOs of most of the really important tech companies now (especially the young ones like Facebook and Google) do not even know me. A few years ago I was on a small party on a yacht in the San Francisco Bay. There was less than 30 people. One of these was Larry Page, the co-founder and current CEO of Google. Even though I had been introduce to him a few times at parties, he did not remember me. He asked me what I did. I said, I use to work for Intel. Then the conversation moved to hang guiding. I felt like saying, “I was the key driver of residential broadband and put together the foundation on which your company was built, you turkey” but I did not. I still connect people from time to time because they are still friends but my circle is getting smaller and smaller.
What I do Have to Offer
I think I understand what it takes to build a successful business. I have a pretty good sense of market opportunities and can develop strategies that are effective. I hope that someday someone will call me up and say “avram, we need your strategic insight. We just raised more money then we need”. But if no makes that call, I am more than OK. As they say “been there, done that“.