Chief Executive, YouMail Inc.
Residence: Malibu - Years in Web Finance: 3
Companies Funded: 3
Value of Fundings: About $450,000
First Significant Investment: I was an early investor in (travel search engine) SideStep back in 2001. It just sold in December for $200 million.
What I Look For in a Tech Investment: Huge potential market, ability to disrupt the current state of the art, a consumer product/service "I get," and a team that can make it happen.
Reason I Do Web 2.0 Investing: Generally, low costs to get started, and get a consumer product/service out the door to see if people will use it. Plus, the returns when a Web 2.0 company works are potentially enormous.
What Surprised Me About Web Investing: How companies sometimes become myopic and need to be hit on the head to evolve.
My Best and Worst Investments: Best investment was the time/money I spent in (voice portal) Quack 12 months from start to a huge exit to AOL in August 2000. Worst investment not selling all my AOL the first day I could.
Chief Executive & Founder, Rubicon Project
Age: 31 - Residence: Santa Monica
Years in Web 2.0 Finance: 3 +
Companies Funded: 5 +
First Significant Investment: StrongMail Systems, an e-mail delivery software company for thousands of companies worldwide.
What I Look For in an Investment: 1. A++ team. 2. Big and rapidly growing market. 3. An idea that is incredibly easy to explain.
What Surprised Me About Investing: As an entrepreneur and an operator, it's hard to observe a business from the "outside." You have limited visibility. You sometimes want to go in and try to "fix" any inefficiencies or help grow the business, but you need to learn that's not your role.
Secret of Being a Good Tech Investor: Invest in people, not ideas.
If I Were Not Involved in the Web I Would Be: Running/growing a charity organization; something that I intend to do someday.
Hints for Entrepreneurs: Believe in your business plan; believe in yourself; no one knows your business as well as you do.
Jason McCabe Calacanis
Chief Executive, Mahalo
Age: 37 - Residence: Brentwood
Years in Tech Finance: 12 - Number of Deals: 7
Value of Deals: $150 million
First Significant Deal: Getting offered $20 million for Silicon Alley Reporter magazine and not taking it.
What I Look for in Investors: Patience, previous success and lack of ego.
Reason I Like Making Web 2.0 deals: The ability to iterate and grow quickly.
Best Career Moment: Selling Weblogs Inc. to AOL 18 months after launching it.
Trends I See in Web 2.0 Financing: First, it takes less money to start a company. Second, companies are getting bought earlier and earlier by major players. Third, there are many more "power angel" investors taking the role of the venture capitalists in the first round.
My Vision of Web 3.0: Trusted, curated content and services complementing the wisdom of the crowds.
Chief Executive & Founder, Sodahead.com
Age: 36 - Residence: Los Angeles
Years in Tech Finance: 2 - Number of Deals: 12
Value of Deals: $100 million
What I Look For in a Business Plan: For a new idea, I look for the strength of the management team and revenue opportunity. For a mature company, I look at the numbers, because you can replace the management. On the other hand, management is critical in a young company.
What Makes a Successful Deal: A solid management team, understanding of the space and marketing ideas. Technology is less a factor. With open source, technology may be a focal point for the entrepreneur, but money is not as concerned about it.
What I Look For in Investors: Portfolio and personality. Did they torture their previous entrepreneurs? Did they nickel and dime companies and replace their CEOs?
Reason I Like Web 2.0 Deals: I want to see the Southern California tech entrepreneur community grow. I want people to recognize that talent, opportunity and money are out here. I'm a member of this community and I'd rather people stay than move away from here.
Best Career Moment: Starting (online polling and social networking site) Sodahead.
Trends I See in Web 2.0 Financing: Investors are looking for proven management teams rather than new ideas. The barrier to entry is so low that the differentiator is the management team.
My Vision of Web 3.0: It's a convergence of traditional and new media through technology, content creation and multiple platform distribution from mobile and Web to video games and TV.
Co-founder & Former Chief Executive.
Age: 48 - Residence: Los Angeles
Years in Web Finance: 9 - Companies Funded: 5
First Significant Investment: PriceGrabber.com
What I Look For in an Investment: Clarity of the proposition. How will it help the intended users or customers? What is the target market? How focused is the team, and do they have a successful track record?
What Surprised Me About Investing: How many new ideas there are out there and how many actually get funded. You look at a business and think it will never get funding, and then it gets significant funding.
Best Investment: PriceGrabber. The company started in 1999, raised about $1.5 million in angel (funding) and the exit was close to $500 million in enterprise value in 2005.
Hints for Entrepreneurs: They have to be passionate about the project they are doing. With that, there has to be a well-thought-out plan that is comprehensive and comprehensible. They need to know the market and be able to demonstrate they know the market.
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