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Seed Capital From Angel Investors: Ho Nam, General Partner, Altos Ventures (Part 1)

Posted on Friday, Aug 6th 2010

By guest authors Irina Patterson and Candice Arnold

This is the sixteenth interview in our series on seed financing for entrepreneurs. I am talking to Ho Nam, general partner at Altos Ventures, a first-stage venture capital firm, based in Menlo Park, Silicon Valley.

Irina: Hi, Ho. Why don’t you start with your background?

Ho: I got started at Bain & Company, a management consulting firm, and got a taste of venture capital business in the early days. I was at Bain from 1988 to 1990. At that time there were only two offices in the whole country, San Francisco and Boston. Bain did some work with smaller companies for equity compensation. We worked for a company called Lattice Semiconductor, which I think might still be their client after twenty years or so. We were hired by the new CEO before it went public. That gave me an interesting view into startups and reporting to a board.

I joined Trinity Ventures, where one of the founding partners was a Bain alum. I was at Trinity from 1990 to 1992. Then I went back to business school and started Altos a couple years after graduating from business school in 1996. I’ve been there ever since.

Irina: Give us a brief overview on Altos Ventures.

Ho: We focus on first venture rounds. The first venture rounds could be seed- or concept-stage companies to profitable bootstrap companies with tens of millions in revenues that have never raised a venture round before.

As you know, many growth equity investors focus on finding fast-growing, bootstrapped, profitable companies. Rather than trying to put in tens of millions of dollars into those companies that have never raised capital, we invest low-single digit millions into those companies and work with the entrepreneurs to try to help take it to the next level.

When we start companies from scratch, we try to model our companies on those bootstrapped companies. So, even though we’re a small, early-stage investor, most of the companies we invest in already have some level of revenues. Quite a few of them are profitable or pretty close to breaking even at the time of their first institutional round.

Irina: How big is your fund?

Ho: Our most recent fund is $86 million. We’ve had four funds, all of which have been between $50 million and $100 million.

Irina: Do you consider Altos regional?

Ho: Yes. We are regional players. Most of the companies we’ve invested in are in the northern California or Bay Area.

What’s interesting, though, is we’ve seen a globalization of our business. Even though we continue to make investments here in northern California, when you look at the headcount across our portfolio companies, I think as of about three years ago, we had more than half the head count outside of the United States. They’re in places, certainly, such as India and China but also in Korea, the Philippines, Ukraine, South America, and Ireland. Really, it’s very much a global economy.

This segment is part 1 in the series : Seed Capital From Angel Investors: Ho Nam, General Partner, Altos Ventures
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