President, Berkus Technology Ventures LLC
Years in Tech Finance: 15
Companies Funded: 67
Value of Fundings: $5 million
An active tech angel in Southern California since 1993, Dave Berkus has invested $5 million in 67 ventures, including several Web 2.0 companies.
The secret of his success? Diversification.
For every 10 of his investments, five will die, three will get sold for a small profit, and one will yield a solid return. But each one that goes supernova generates enough money to easily compensate for the losses.
"I have had 24 liquidity events, and three of those account for 90 percent of all my gains," he said.
Berkus entered the business world at an early age when he started his own record company in high school. After graduating from Occidental College in 1962, he started programming in machine code to create a computerized billing and accounting system for his firm.
It was obvious to him that there was more money to be made in minicomputers than in music, so he sold his record outfit and launched a software company. Founded in 1975, Computerized Lodging Systems eventually grew to employ a workforce of more than 200, capturing more than one-fifth of the domestic market for hotel enterprise software systems. Among its star customers were the Marriott and Sheraton chains.
After selling his software company in 1990, he plowed some of the proceeds into Berkus Technology Ventures and began investing in Internet startups. One of his first big deals was GameSpy Industries, a Web community providing games and software patches for game aficionados. Berkus was angel investor, CEO coach and chairman, co-founding the company in 1999 and selling it in 2004 for $65 million.
One of his latest angel investments is MyShape, a Pasadena-based Web startup offering an online emporium for women's apparel. Shoppers are invited to set up their own personal boutiques featuring their exact clothing measurements and preferences, enabling the site to locate tailored garments. Women can peruse merchandise from retailers and designers, and communicate with other shoppers about their experiences.
The idea matches Berkus' vision of Web 3.0, a new frontier that will advance beyond text-based Internet searches.
"Web 3.0 is the semantic Web, one where search is by meaning, not words," he said. "MyShape is tapping into the idea that women can create a customized search by sharing their preferences, so search suddenly has meaning."
MyShape has 185,000 personal boutiques built by shoppers just since its October launch.
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