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Seed Capital From Angel Investors: Larry Chaityn, Keiretsu Forum, New York Tri-State Chapters President (Part 6)

Posted on Wednesday, Sep 8th 2010

By guest authors Irina Patterson and Candice Arnold

Larry: Some of other things that we have looked at are mobile technology and that weaves itself into media. So, it’s mobile media. We’ve looked at electronic coupons and location-based services. We look at what is the business problem that you are trying to solve as a company for your customers.

So, maybe it’s location-based services coupled with electronic coupons. That could help a retailer with an overstock problem.

So, we’re overstocked but because we know who our customers are, because they have opted in, now we’re able to send out an electronic coupon to those people who best fit our market.

That’s an example of kind of three businesses or three types of entrepreneurs helping a retailer.

Irina: What is your usual investment type?

Larry: Preferred shares. It could be a bridge loan with a discounted coupon on the next round of financing but typically, it is preferred shares.

Irina: You don’t have any exits, yet, right?

Larry: We don’t. But, you know, some of the life science companies that our investors have invested in are in early talks with large pharma companies and also large medical device companies. So, although there is no exit yet, discussions are underway.

Irina: What would be the most likely way of exit for you?

Larry: An acquisition from a larger company acquiring one of our portfolio companies.

Irina: What is your biggest investment to date?

Larry: One of the investors invested over $1 million in a retail-focused product company. We’ve had other investors invest hundreds of thousands in Web-based social media, social networking-type companies that are growing.

Irina: Can you give us more details?

Larry: One company is The Hotlist, a New York-based company. Their customers are people from 18 to 24, and they’re helping with their extracurricular calendars but the value really is in understanding who their customers are and then helping their customers with their schedules, purchasing items that they’re interested in. That’s one company.

There’s another one called Ivy Exec. It is a company that helps really high-end, qualified people to get jobs.

Another one is Carbon Nanoprobes. They got investments from multiple chapters. [They manufacture carbon nanoprobes, which are incredibly small needles made of carbon nanotubes. The needles are used in atomic force microscopes as lenses to generate three-dimensional images of substances at the molecular level, as it’s explained in Philadelphia Business Journal here.]

Irina: What do you think is the most important thing that the founders of the companies that you’ve already funded can do to increase their chances of success?

Larry: Laser-beam focus on the customer, understanding the customer’s problem, and accelerating revenue. You know, it’s all about acceleration. It’s all about bringing in revenue.

Irina: What do you think angels could do to increase their chances of success?

Larry: Working with the portfolio companies in helping them grow, through strategic introductions, through mentoring but really through revenue acceleration. Who do the angels know in the marketplace where they can bring the portfolio company to accelerate their revenue?

Irina: Thank you, Larry. Great insights.

This segment is part 6 in the series : Seed Capital From Angel Investors: Larry Chaityn, Keiretsu Forum, New York Tri-State Chapters President
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