At a glance
Seed and Early-stage
$250,000 to $3 million
A start-up venture investor is called upon to wear many hats: financial strategist, headhunter, marketing advisor, investment banker and corporate therapist, providing guidance, support and confidence to a team. As board members, we bring our energy, experience and contacts to help turn ideas and early traction into scalable, high-growth businesses. Our entrepreneurs and the individuals on their teams posses the extraordinary intelligence, passion, vision and drive needed to succeed. We believe they should have large stakes in their companies which can generate great wealth for those who make the early sacrifices. We believe investors must be helpful but never meddlesome. We expect the founding team to develop their business, execute relentlessly, adapt to inevitable changes, and to grow with their companies. While we will often help founders recruit additional executives, we invest in the founding team anticipating they will scale with their business. Our friends, partners and industry colleagues are our most valuable resources. Our development of a “value-added” network is a powerful resource we can use in our efforts to help our portfolio companies succeed.
A Deeper Dive
Business of Healthcare and Healthcare IT
Healthcare is a $2.6 trillion industry representing one-sixth of the US economy. Ever-rising costs coupled with the new Affordable Care Act are driving fundamental changes in the way US health care is delivered. Payers – businesses, labor unions, government, and individuals – are demanding lower costs and higher value. The greatest potential for increasing value lies in innovations that engage patients more actively in managing their own health care and enable personal physicians to provide the ongoing guidance and coordination of care their patients need to succeed. In the emerging health care marketplace, payers will become more savvy customers, demanding not just lower prices, but more patient contact with the doctor, less time in the waiting room, shorter waits for appointments and ongoing support outside the clinic. There are unprecedented opportunities for innovations that respond to these demands. When it comes to technology, we’re not interested in medical devices, healthcare back office IT, and the like. But we are quite interested in how doctors can use technology to be more efficient and coordinate care more effectively. We believe in tele-medicine, remote tracking and care for chronic conditions, electronic monitoring and sensing for specific diseases, and better ways to get cost effective prescription medicines to patients.
Improvements in technologies used to manage a business along with the reduction in the cost of collecting and storing information has created an opportunity for new insights and business process improvements. In order for businesses to capitalize on those opportunities, they need tools to capture, process, manage, analyze and curate that data. While we are generally not looking at the horizontal software tools to achieve these goals, we are very much interested in companies that apply these technologies to innovate in vertical markets, some of the markets that are undergoing tremendous change: healthcare, online advertising, mobile and e-commerce.
Advertising revenue is the fuel that allows content to be delivered “free” to consumers and has supported radio, television, newspapers and magazines since their inception. Online advertising has evolved in the last fifteen years from email marketing, to banner ads to video pre-roll and is an effective method of driving traffic to websites. Yet, unsolved problems remain. Consumer brands, for example, are less interested in driving traffic to their website than they are in creating an emotional bond with potential consumers. How they accomplish that online, or on a mobile device, is a largely unsolved problem. Mobile advertising in general is in its infancy. Much innovation will take place here. With online search traffic, we see an imbalance between the high banner inventory and a lack of intent-driven clicks. Solutions to this problem are of keen interest to us.
Cybercrime now exceeds the value of the global drug trade. Governments, including our own, are using cyber technologies as offensive weapons. Bits and bytes are replacing bullets and bombs in conventional warfare. Drones and intelligent robot swarms will be used as new offensive weapons and mobile security is just at its infancy. We are interested in capital efficient businesses that help individuals, businesses and governments play offense and defense in this precarious digital world.
Education is a $1 trillion industry, and over the past 35 years, the cost of tuition has increased at almost four times the rate of core inflation and almost twice the cost of health care. Student loan debt in America exceeds credit card debt. Parents and students are starting to rebel. Online curriculum will augment traditional classroom learning and lower overall education costs. While there are more than 2000 colleges and universities in America today, that number will shrink dramatically and enrollment of foreign students in US universities will continue to increase. Top university brands will expand their reach globally, offering “lite” versions of their degrees to a global online audience. Models like Khan Academy will continue to push the evolution of the dated classroom model, starting as early as kindergarten. Parents are looking for an edge for their K-12 student, while college students are looking for ways to spend their education time and money more efficiently. The opportunities leveraging technology in education are boundless and we are very excited about the disruption clever entrepreneurs will bring to transform this market.
The first wave of e-commerce brought us simple product purchases: books and electronics. The second wave brought us digital content: music, movies and e-books. Today we are in the midst of a third wave of online commerce, driven by the fabric of our digital social networks. While the volume of e-commerce has grown steadily, less than ten percent of US retail sales take place online. There is a lot of room for growth. We are particularly interested in how e-commerce evolves online to serve complex, custom, regulated, high-priced and recurring-purchase products.
Mobile is a more important and disruptive platform today than the desktop computer was in the 1980s. Mobile technology is pervasive and we are focused on how that can be used by consumers in their personal and professional live. Some of the industries ripe for disruption on mobile platforms include radio, television, music, books, newspapers, magazines, movies, games, advertising, telephony, video, security, healthcare delivery, education and e-commerce. We look for businesses that will forever change the way traditional industries operate.