Saturday, April 4, 2015

Angel Profiles: Desney Tan

Desney is a Principal Researcher at Microsoft Research, where he manages the Medical Devices Group. He also holds an affiliate faculty appointment in the Department of Computer Science and Engineering at the University of Washington. Desney’s interests include Human-Computer Interaction, Mobile and Wearable Computing, as well as Health Technologies. He spends his time building devices that digitize the world and human body in interesting ways and then applying signal processing and machine learning to make sense of it all. Desney was honored as one of MIT Technology Review's 2007 Young Innovators Under 35 for his work on brain-computer interfaces and a 2012 Kavli Fellow by the US National Academy of Sciences. He was named one of SciFi Channel's Young Visionaries at TED 2009, as well as  Forbes' Revolutionaries: Radical Thinkers and their World-Changing Ideas for his work on Whole Body Computing. He has been angel investing for the last few years, and is always looking for great products, people, and companies to connect with.

What attracted you to exploring angel investing?
Like many people, I started with traditional investments in stocks and bonds, expanded into micro-loans of various sorts, and eventually moved into residential real estate as well. I am always looking for investment vehicles that help me diversify my portfolio, but more so than that, I was specifically in search of high-risk high-reward, fast moving, full contact, rough and tumble technology development, sprinkled with a good dose of business creation, all tied together with great people wielding their dreams. In short, I was looking for some fun, and I found it in angel investing.

Where do you find most of the companies?
Since my initial entry into angel investing through the Seattle Angel Conference, I have started investing with a number of other local groups such as the Alliance of Angels, which has been wonderful. The number of angel funds that have come online around Seattle in the last few years has seen a small explosion, and I’ve tried to stay on top of all the activity here as well. I’ve also been much more pro-active about growing and scouring my social network to uncover products, companies, and people to invest in. Also turns out investing breeds visibility and I’ve had many a company approach me directly for engagement. I tend to invest alongside other trusted investors, but have just started venturing out alone when the opportunity is right.

What are the top three things you look for in companies where you invest?
Like most other investors, I look for ideas that solve real problems (small problems for lots of people, large problems for few people, or better yet large problems for lots of people), and a stellar team that can execute. Contrary to intuition though, I also look for interesting flaws in the companies I invest in (I do, really). In my experience, every company at the angel phase is flawed in some way. “Interesting flaws” are either ones that I can usefully apply my experience and expertise to, or that I project could serendipitously lead the company to navigate areas that others would not otherwise get into. In a select portion of my portfolio, I also intentionally look to invest in areas I know absolutely nothing about. This forces me to maintain discipline in due diligence, pushes me to grow, and is intellectually challenging in exciting ways.

How did you incorporate angel investing into your overall portfolio?
Angel investing is not a “get rich quick” scheme, at least not unless you get extraordinarily lucky. Like every other investing tool, one has to understand the role it plays in the overall portfolio, and continue to learn the craft as you do. Given that statistics suggest it beneficial to have a portfolio of at least 15-20 companies, it was tempting find the first 15-20 companies that seemed reasonable and throw money at them.  Viewed as a long term investing tool though, and one that is higher risk and much less liquid than many others, I have slowly incorporated this into my portfolio. This allows me to engage more fully in the companies I invest in, and I’m hoping this patience pays off.

What have you learned since you started angel investing?
I’ve learned lots. Perhaps the most interesting realization has been that: Good investors find good companies to put money into, and then sit back and hope they do well; great investors find good companies to put money into, and then work hard to make them great. It’s that simple, but also that difficult.

What do you wish you would have known before you started angel investing?
For a long time, angel investing was a big, scary thing to me. I have spent most of my career working either in academia or in large multinational corporations (e.g. Disney, Microsoft), and while I am no stranger to innovation and business creation, and had even considered jumping into the startup space at various points, I felt pretty ignorant of how things worked there. I did not feel like I had transferable expertise and did not really know how to get into it. To those that follow, I would suggest that those fears and uncertainties are generally completely unfounded. Everyone brings something to the table, and there are lots of wonderful people who are willing to share experiences and expertise. Be humble but be confident, ask lots of questions, and be prepared to make (and learn from) mistakes as you go. And most of all, have fun!

What space are you most interested to invest in next?
I am particularly interested in health technologies and medical devices, because the industry seems ripe for change, because I can add useful expertise, but also because the impact to society could be huge. That said, I tend not to go into investing with a priori filters, and prefer to navigate as I go. Almost nothing is out of scope for me (almost because I will not invest in businesses that conflict with my fundamental principles, regardless of how large the opportunity).

What resources should entrepreneurs and angels use to learn more?
There are many. I personally browse the “interwebs” quite a bit (e.g. blogs like joshmaher.net are great, but sites like angel.co and crunchbase.com also help me stay on top of things), attend various organized events (e.g. I like Jason Calacanis’ Launch events as well as the more specific Rock Health ones), and talk to many more people than I used to. I’d you live around Seattle and are ready for the ultimate tutorial, I’d suggest Seattle Angel Conference as a great place to get started. I personally treated the first investment as tuition, and the education itself was probably the best “investment” I have made in a long time.

Saturday, March 14, 2015

Angel Profiles: Tymon Johns



A friend and I recently started working on a trampoline park in Brazil. If all goes well it should be up and running in three to four months from now. Brazil is a very difficult country to do business in, especially as an American, but the barriers to entry have allowed us to be one of the first ones in a country with over 200 million people. Should be quite the ride =)




What attracted you to exploring angel investing?
I started out wanting funding for my own company but wasn't sure how to go about it. When I found out about an opportunity to Angel Invest I decided that if I sat on the side of an investor I would better learn what is needed to pitch my ideas to other investors down the road. I treated the angel investment the same as I would college tuition. Helping out another company was a side bonus.

If you’re not still angel investing, why did you decide to get out of angel investing?
I am working on a different, personal project at the moment so I have put angel investing on hold for the time being. If the current project goes as well as I hope I'll be back to investing in another couple of years.

What are the top three things you look for in companies where you invest?
  1. I have to really like the product/service to invest in it. If I would be excited to be their customer then I'm probably interested.
  2. Competency/abilities of owners.
  3. A reasonable valuation of the business.
How did you incorporate angel investing into your overall portfolio?
Though I hoped to see a return I wasn't banking on one at all (I didn't invest in enough companies to reasonably expect a good return). I treated the money as an investment in my own personal education so any return would just be a bonus.

What have you learned since you started angel investing?
I have learned that there are a lot of interesting people and ideas out there, from both investors and those looking for funding. Also, that investors have vastly different opinions of what a good investment consists of, and just as many reasons why they have those opinions. All are great to listen to and learn from, but in the end the decisions have to be your own. Finally, I learned the value of due diligence. It has been enormously helpful in removing my personal emotion from products and services I'm looking at and allowing me to see them for what they really are and what they can become.

What do you wish you would have known before you started angel investing?
Nothing, I got into it hoping to learn what made a good angel investor so I really had no preconceived ideas from the beginning.

What space are you most interested to invest in next?
I like the entertainment space because, despite there being a high upfront fixed cost, the profit margins are generally very high once the business gets off it's feet.


What resources should entrepreneurs and angels use to learn more?
The internet is full of really good information, but it has to be filtered because of all the rubbish. Taking a class, or talking with other successful entrepreneurs/angels first hand is probably the best way to learn from them.

Saturday, February 21, 2015

Angel Profiles: Milton Sigelmann

I am a retired mechanical engineer with many years of experience in product development and project management.  I spend my time on adventures, special projects, and investing.


What attracted you to exploring angel investing?
Investing in startups seemed like it would be a lot of fun and it has been.  I get to search for good opportunities then dig in to make an assessment of whether or not they have a decent chance of success.  Angel investing gives me a platform to invest in meaningful companies, meet interesting people, learn new things, and hopefully make money.

If you’re still angel investing, where do you find most of the companies?
Networking, networking, networking.  Through various friends and acquaintances, I have been able to connect to companies and groups to get pretty good deal flow.  SAC was a good starting place.  If anyone knows of a good company, let me know!


What are the top three things you look for in companies where you invest?
  • The team has to be awesome.  That doesn’t mean that they won’t have flaws or gaps but they need to be passionate, competent, and coachable.  If they can’t execute or hire the people who can, they will fail for sure.  It’s hard enough even with a great team.

  • The product or service has to solve a problem and someone has to be willing to pay for it.  Also, it has to make sense to me.  If I don’t “get it”, I don’t buy it.

  • The business proposition needs to give me a return that is worth the risk.  I’m shooting for an IRR of at least 25% across my entire angel portfolio.

How did you incorporate angel investing into your overall portfolio?
I’ve always had a portion of my portfolio be high risk.  Startup companies are now a big part of the high risk portion.  Because there is also the possibility of high returns, I put much of my angel investments into a self-directed Roth IRA.

What have you learned since you started angel investing?
No one has proven that they can consistently pick the winners.  So my approach is to pick the losers.  Then I don’t invest in those companies!

What do you wish you would have known before you started angel investing?
The exit timeframe is critical to success.  This is obvious but it needs to be emphasized in all investment decisions.  The longer an exit takes, the more time for various bad things to happen (dilution, market changes, time value of money, etc.)

What space are you most interested to invest in next?
I invest in anything that meets my criteria that I think the product or service matters, I understand it, and it will make me money.  So far, this has led mostly to investments in life sciences and hardware companies.

What resources should entrepreneurs and angels use to learn more?
There are a number of really good books and websites that can help Angels in all aspects of investing.  Examples are Angel Investing by David Rose, Get In Get Out by Troy Kauss et al., and the ACA website.  Ignore statements that indicate an Angel needs to have a background that allows them to negotiate a deal, run a company, provide critical contacts, etc.  The only prerequisites should be interest, risk tolerance, and intelligence.

Friday, February 13, 2015

Angel profiles: Introduction


Seattle Angel wants to open up more opportunities for angel investors to find and invest in more great invest-able companies in the northwest.To that end, we're focused on improving the entire ecosystem. The education events that Seattle Angel puts on are geared towards educating entrepreneurs and angels about the things that are most critical to know to make great investments happen. The angel conference and angel fund are designed to be a collaboration focused investment vehicles. We also encourage investors and entrepreneurs to find the best people to invest with out of all the options available in Seattle. 

Over the next few months we'll be profiling some of the angel investors we've worked with who have invested through the angel conference or the angel fund. Some aren't investing any longer, others have found different people to invest with, and others use the angel conference and angel fund as their primary investment groups.

Here is the first angel profile in the series, if you want to be added to the list let us know.

Tim Shoultz



Tim Shoultz invested in a few of the Seattle Angel Conference programs and added a lot of value to the process. With his focus on Commercial Real Estate and building his new investment firm The SMARTCAP Group, he's found Keiretsu and the Puget Sound Venture Club as better fits for his angel activity.





What attracted you to exploring angel investing?
Starting out Angel investing seemed attractive to me as a way to explore new investment ideas.  Being at Microsoft for 15 years and building a portfolio of stock, over time I realized this was not an investment platform I truly enjoyed.  I had spent the later 5 years building a real estate business and really enjoyed that avenue of investment.  To me, Angel investing was a great way to network with other people and see new opportunities and companies to both learn from as well as invest in.

Where do you find most of the companies?
Currently I am a member of Keiretsu and am looking at joining Puget Sound Venture Club. I’m attracted to Puget Sound Venture club as they are a locally based angel group.  To me, Seattle is important.  It is important to my real estate portfolio, it is important as part of my life and I want to see it thrive.  The idea of supporting local companies rather than companies from other regions is important to me.  I want to see Seattle continue to grow as a hub of angel investing, technology and business development.  

What are the top three things you look for in companies where you invest?
I prefer to look at companies I am passionate about.  There are a TON of interesting companies out there, but when you know nothing about them it is really hard. I have been in Technology for 15 years but that is not truly where passion is.  My passion lies in Commercial Real Estate and more tangible business models.  I also like the idea of the company being local to the northwest.  Again, supporting the Seattle economy is an important aspect to keeping my backyard healthy and thriving.  Strong management is critical to a business being successful.  I think this is prob become the number one criteria for me over the last several years. 

How did you incorporate angel investing into your overall portfolio?
Slowly.  I’m still new to the space and it is really easy to get excited and sucked in quickly.  There are a lot of interesting companies and trying to learn how to invest in them in a methodical, non-emotional way is a challenge.  I believe in taking my time and building a portfolio of years, not months.  

What have you learned since you started angel investing?
I think one thing that is really interesting for me is that when I invest in Real Estate I am very good at keeping emotions out of the analysis process; It is a numbers game. With a startup, that can be more difficult to do.  I don’t own the underwriting model for the business and I don’t own the vision, so learning to look at a business in a different way is important.  You can’t look at it purely for a numbers perspective, there is so much more.  The management team is prob the most important aspect.  A great idea with a bad team is doomed to fail, but a great manager can often make even a mediocre idea profitable.  When you combine the two, great ideas and great leadership, that is when you can see real success.  

What do you wish you would have known before you started angel investing?
This may sound odd, but nothing that I didn’t know, which was very little.  This is about learning and growing as an investor, business owner and a person.  To me, a lot of the fun is meeting amazingly smart people and feeding off their knowledge.  That is what makes you better and allows you to formulate your own opinion over time.  

What space are you most interested to invest in next?
Right now I am in primarily focused on growing my own business ‘The SMARTCAP Group, Inc’ with my business partner Joe Ollis.  I think as I continue to build my investment company I would like to invest in companies that I feel are symbiotic.  Something that I can really add value too and that will help grow my business along with the business I’m investing in.  To me this would be very appealing.  

What resources should entrepreneurs and angels use to learn more? 
This is a hard one to answer.  There are a lot of resources out there and they all have an opinion.  It can be tricky to find the ones with the right options.  I think reading is crucial to success and reading a lot.  The great thing about reading books, publications and articles on your subject and business development is you get a wide array of advice an opinions.  This allows you to think about things in a pretty broad sense and really formulate your own opinions and how you want to run your company.  Be selective in who you take advice from, but listen carefully to all that is given.  I think almost everyone has a nugget of information but there are only a handful that make great mentors.  When you do find someone that is amazing, ask them to be your mentor.  In my experience you almost always get a ‘yes’ from that question.  Don’t expect anything specific out of the mentorship, just try to learn.