Posted on Thursday, Apr 8th 2021
If you have been bootstrapping and think you are ready for investors, you need to learn how investors think. First, please study our free Bootstrapping course and Investor Introductions page. Then start looking for entrepreneur – investor fit. Today I introduce you to Amir Banifatemi.
Amir Banifatemi is the Founder and Managing Partner of K5 Ventures, a fund focused on pre-seed, seed, post-seed, and early-stage investments from Southern California. Amir is also a Board Member and former President of Tech Coast Angels, a group of 340 angel investors from Southern California. You can listen to the podcast interview
here. Sramana Mitra: Tell us about K5 as well as your seed investing activities at Tech Coast Angels. Amir Banifatemi: With pleasure. K5 Ventures is an early-stage venture firm. We call it venture capital, because it’s the easiest way to qualify it but, in fact, we are extremely hands-on investors. There are 12 partners and we have operations of different businesses, large companies, successful at exits. We love the opportunity to work with new startups as well. It is our own fund and we are investing with passion in entrepreneurs, and we are working with them on a continuous basis. Sramana Mitra: How big is the K5 fund? Amir Banifatemi: We have been slow so far. It is at about $12 million. We keep adding to it as we go. Sramana Mitra: And what size investments do you like to make? Amir Banifatemi: We invest anywhere between $10,000 on a napkin idea to $250,000 for first investments. For the companies that we follow and who show signs of success or progress, we keep adding, so we go up to series B with them. So always, we keep our pro rata. The largest investment we’ve made was about a million and a half dollars, but we still go step by step. Sramana Mitra: What is the focus? What kinds of businesses do you like to invest in? Amir Banifatemi: We initially started with businesses that were more about employing certain type of technologies such as machine learning, data science, and robotics. Gradually, by working with entrepreneurs, we understood that our focus should be shifted more to real problems and be more than just a technology focus.
While we like to invest in companies that do employ technologies, such as machine learning, data science, and maybe predictive analysis, we are trying to identify teams and startups focusing on very immediate, real problems that have an impact, and that can be pragmatic and practical in their outputs. Sometimes, they don’t go and become unicorns but we’re not investing for that purpose anymore.
We’re trying to basically be domain-focused on health, education, gender equality, environment, and so forth. This becomes our new angle of evaluation, if you will, but we have to have strong technology understanding and capabilities to build applications and to deploy them somehow.
Sramana Mitra: What about geography? Amir Banifatemi: We started in California. Because our partners are distributed globally, we invest in China, Israel, India, Europe, and Canada. Of course, New York as well. But we did it because our partners were located somewhere and we would need to have feet on the ground to have an understanding of the ecosystem in which startups were developing and growing. There is no way you can help just with money. Throwing money at the company, which is somewhere else, could be interesting if you’re part of a syndicate or if there is an interesting deal going on, but usually we don’t do that.
Since we try to be involved in the development of the company, we try to have knowledge of the ecosystem; understanding who can be their support, who can be their client, or how much money they can raise. These building blocks take time, so we organically started investing beyond California as we added partners.
Sramana Mitra: And your 12 partners are spread out in all these different geographies that you mentioned? Amir Banifatemi: Yes, they are. Sramana Mitra: Okay, So what trends are you seeing in your deals right now? What’s worth discussing? Amir Banifatemi: We see a lot of chat bots and CRM. There are few big ideas. I think all the ideas have been spoken for already. There’s always these new variations of existing ideas or new approaches.
Obviously with new technology capabilities, you can tackle problems that were not easy to tackle before. Maybe because of better distribution of networks and access to information, or better payment capabilities, or the work becoming more open, there are some ideas that could be triggered to come back to life and be visible. You were mentioning this in one of your podcasts. I don’t think we have new ideas coming up all the time. That is very rare.
Of course, we see a lot of blockchains. We hear a lot of ICO right now and that worries us a little bit because it’s not that they’re not good. I think there are definitely merits in all of the above. We hear less and less ideas focusing on making humanity better and wealth distribution wider. It is a bit worrisome sometimes when we see entrepreneurship becoming a global sport. Everybody has access to tools and with little money can do a lot of things. I would hope to hear more original ideas.
Our conversation continues
here. This segment is a part in the series : Best of Bootstrapping . Bootstrapping to an Exit . Why is Bootstrapping Important? . How Can You Play this Low-Probability Game Intelligently? . Do NOT Go to VCs as Beggars - Go as Kings . Excess is NOT Required for Success . Bootstrap First and Raise Money Later . Some Bootstrapping to Exit Case Studies . The Buy Side of Bootstrapping to an Exit . Blitzscaling vs. Bootstrapping . Bootstrapping to Unicorns More »» . Cinedigm Acquires Bootstrapped 1Mby1M Company Future Today for $60 Million . Mailchimp Bootstraps to $600M Revenue . Bootstrapping from Arizona to $10 Million . Bootstrapped Basecamp Executes a No Nonsense Strategy . How Under30Experiences Bootstrapped to $5 Million . Bootstrapping with a Paycheck . How Algo.ai CEO Amjad Hussain Bootstrapped using Services from Michigan . Seed Investors Who Like Bootstrapped Businesses . How iHeartRaves CEO Bootstrapped a Niche e-Commerce Company to $20 Million . Bootstrapping with Services . How The Intern Group CEO David Lloyd Bootstrapped to $13 Million . How Passageways CEO Paroon Chadha Bootstrapped from Indiana . How SmartBuyGlasses CEO David Menning Bootstrapped to $50 Million . Death by Overfunding . How RainmakerForce CEO Mack Sundaram Bootstrapped Decisively to $5 Million+ . How FormAssembly CEO Bootstrapped a Virtual Company with a Paycheck . TimeSlips CEO Mitch Russo Bootstrapped to Exit with Sage . The VC-Entrepreneur Compensation Disbalance . BioConnect CEO Bootstraps with Sophisticated Strategic Maneuvering . Tremend CEO Marius Hanganu Bootstraps from Romania . Gesture CEO Jim Alvarez Bootstraps to $10 Million . SproutLoud CEO Bootstraps to $30 Million from Florida . Tuft & Needle CEO Bootstraps to Over $100 Million . Co-founders Bootstrap Linguamatics to Over $10M from the UK . Ownership Matters . Vainu Co-founder Mikko Honkanen Bootstraps from Finland . Entrepreneur Couple Bootstraps to $10M from Colorado . Power2Motivate CEO Bootstraps to $80M from Canada . Financial DNA CEO Bootstraps to $10M+ from Australia . Big Barker CEO Bootstraps a Niche E-commerce Brand . PrecisionLender CEO Bootstraps to Over $10M from North Carolina . Master Bootstrappers with Over $1B in Exits . Ultra Mobile Founder Bootstraps to Over $100 Million . Bootstrapping a Two-Sided Marketplace to $10M . Can You Bootstrap a Virtual Company to Over $5 Million? . Capital Efficient Entrepreneurs Turn $1M into $80M . Discussing the Journey Through Failure to Success . From a Small Town to $12 Million . Bootstrapping to Y Combinator and $10 Million Series A . Bootstrapping a Marketplace to Over $10 Million . Freightwise Bootstraps to $33 Million . Bootstraps First to $5M ARR, Raises $10M Later . Bootstraps in Europe, Raises Money and Goes Global in the US . English Major Bootstraps a Tech Company . Bootstraps with a Paycheck to $15M from Tennessee . Queue-It Bootstraps from Denmark to the US . 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Madwire CEO Bootstrapped First, Raised Money Later to $120M . Bootstrap Using Services First, Raise Money Later . Wonderful Bootstrap with a Paycheck Story . RushOrderTees CEO Bootstraps to $23M . Bootstrapping with Freemium and Free Trials to $13M . Bootstrapping, Pivoting, Gaining Liquidity, Scaling to $100M+ . Bootstrapping with Affiliate Marketing . Bootstrap to Exit, Bootstrap Again, Then Raise VC Money . Bootstrapping Using Services to $12M . Bootstrapping an Ad Tech Company from Paris . Bootstrapping a 100% Virtual Company from Ireland . MiQ CEO Bootstraps with Services from London . Bootstrapping to $8M During the Covid Crisis . Bootstrapping a Marketplace from Brazil . Bootstrapping Using Services from Sweden . What Should Startups Do To Raise Seed Capital in 2021? . EdTech Unicorn Bootstrapped First from Canada . Coalition Technologies Co-founders Bootstrap to $10M . Bootstrapping a Virtual Company to $10M from Atlanta . Bootstrapping a SaaS Company with a Paycheck and Scaling . Bootstrapping with Services to $20 Million . Onit CEO Bootstraps First, Raises Money Later . Pura Vida Founders Bootstrap to $130M . Lawline CEO Bootstraps to $10M . Bootstrapping a Technology Product Company from India . Codesigned CEO Bootstraps Using Services . Rukkus CEO Follows Bootstrap First, Raise Money Later Strategy . Bootstrapping and Managing a Successful Pivot . Ukrainian Entrepreneur Bootstraps to Global Scale . Bootstrapping a Niche E-Commerce Venture . Bootstrapping Planon to $100M from The Netherlands . Co-founder Bootstrapped with a Paycheck from Indiana . Bootstrapping an Education Company . Bootstrapping an IoT Company from North Carolina . Serial Bootstrapper Bootstraps to $27M . Bootstrapping Identity Automation Using Services from Houston . Bootstrapping ProjectManager.com from NZ, Scaling in the US . Bootstrapping to $15M in Three Years . Peruvian Entrepreneur Bootstraps to $200M . 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Bootstrapping a Highly Profitable Company in Social Media Marketing . Discussing Investments in Indian Startups with Anand Daniel, Accel Partners . Bootstrapping an Evergreen Business from Oregon . Discussing Startups in Africa with Osayi Igharo, Ripple VC . Investing in Concept Stage Startups with Matt Holleran, Cloud Apps Capital Partners . Serial Entrepreneur Bootstrapped Two Startups to Huge Revenue . Discussing Investment Strategy With Deepak Jeevankumar, Dell Technologies Capital . Bootstrapping Hotelplanner.com to $20M with Intelligent Financial Engineering . Discussing Investing Across Sectors in India with Swapna Gupta, Qualcomm Ventures . Bootstrapping Cleverbridge From Germany . Discussing Open Opportunities with Hemant Mohapatra, Lightspeed Venture Partners . Bootstrapping E-commerce Company Fun.com . Discussing Seed Rounds with Bruce Cleveland, Wildcat Venture Partners . From Friends and Family Funding to $30M Exit . Discussing the Evolution of the Indian Startup Industry with Sasha Mirchandani, Kae Capital . Lean Company Bootstraps to $7M . Saatva Co-founder Bootstrapped a $25M E-Commerce Company . Looking at Terms with Heidi Roizen of Threshold Ventures . ADDA Co-founder CEO Bootstrapped with a Paycheck in India . Duda Co-founders Bootstrap with Paychecks . The Importance of Building Value with Shomit Ghose, Onset Ventures . Get Real Health Founder Bootstrapped Using Services . Bootstrapping Unique Vintage Using a Paycheck . Discussing E-commerce Startup Trends with Daniel Gulati, Forecast Fund . Bootstrapping a Digital Startup with a Paycheck . Discussing Seed Stages with Amir Banifatemi of K5 Ventures . Bootstrapping Avelead Using Services from Atlanta . Founder Bootstrapped a Big Data Company Using Services . Discussing Future Unicorns with Warren Weiss, Foundation Capital . Founder Bootstrapped Axosoft with a Paycheck . Raised a Series A with $10 Million in the Bank . 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Co-founder Bootstrapped a SaaS Company in India . Bootstrapped MindTouch to $12M+ and Exit . Mobiliya Technologies was Bootstrapped Using Services . What Traditional VCs are Looking for with Scott Sandell, NEA . Bootstrapped Srishti Software Applications with Services from India . How Robust SaaS Company RateGain was Bootstrapped from India . Bootstrapped eGroup to $20M in Charleston, South Carolina . Gravitant CEO Bootstrapped Using Services to $15M in Venture Capital . CEO Bootstrapped Sitecore Using Services from Denmark . Co-founder Dan Hermann on Bootstrapping Paint Nite . Founder Krishna Kumar Bootstrapped App Orchid Using Services . Bootstrapping a Web Hosting Company to $60M . Bootstrapping CloudSense with Services on Force.com from London . Bootstrapped Book E-Commerce Business BookPal . Student Entrepreneurs Bootstrapped a Zero-Logistics E-Commerce Company to $19M . Bootstrapped to a High Growth Inc. 500 Company . Bootstrapping Using Services and Scaling Using Content Marketing . Bootstrapped from London, Went Public and Scaled to $450M . Bootstrapped Credit Card Processing Business Payscape . Bootstrapped TEOCO to $175M with Services . InRule Was Bootstrapped Using Services . HighQ was Bootstrapped Using Services from London . Ingenious Med was Bootstrapped with a Paycheck from Atlanta . Bootstrapped VistaVu to $10M from Canada . OnSIP CEO Mike Oeth Bootstrapped in Pennsylvania . Pramata Founder Bootstrapped in Minnesota . Conversocial was Bootstrapped Using Services from London . Zephyr Health Bootstrapped First, Raised Money Later . iText was Bootstrapped from Belgium . CTO Bootstrapped InteliSecure Using Services from Colorado . Bootstrapping Evariant Using Services . Dave Elkington Bootstrapped Billion Dollar Unicorn InsideSales.com Using Services from Utah . PMG Founders Bootstrapped Using Services from Atlanta . Ensighten Founder Bootstrapped First, Raised Money Later . Bootstrapping LittleThings First, Raising Money Later . Bootstrapping eMazzanti Technologies Using Services . Reltio Founder Bootstrapped Using Services . Co-founders Bootstrapped Ateb Using Services from North Carolina . Bootstrapped HireVue While in School, Raised Money Later, All in Utah . Bootstrapping the First Venture, Raising Money for the Second . Co-founders Bootstrapped BeenVerified with Angel Money . Bootstrapping a Significant Software Company from Australia . Bootstrapping Meltwater to $200 Million . Bootstrapping Casewise from London and Scaling in the US . Bootstrapping Lessons Learned by FairWarning Founder Kurt Long . Abacus Group Founder Bootstrapped a Virtualization Services Company . Seismic Audio CEO Bootstrapped a $10 Million E-Commerce Business . PhishMe was Bootstrapped Using Services First, Raised Money Later . Firmex Scaled with Angel Money in Canada . Wrike Founder Bootstrapped First, Raised Money Later . Bay Dynamics Co-founders Bootstrapped Using Services . Building an AI Software Company from Dallas . RJMetrics Co-founders Bootstrapped First, Raised $22M Later . Bootstrapping Niche E-Commerce Business BuyAutoParts to Exit . TemplateMonster was Bootstrapped to $15 Million . Bootstrapping Edge Hosting to $18 Million . Bootstrapping, Fund Raising and Exiting with Sefaira . Bootstrapping IdeaScale to $5M from Scratch . Bootstrapping to $10M from Finland . Happy Grasshopper CEO Dan Stewart Bootstrapped to Inflection . Bootstrapping Gravity Pro Using Services . Founder Builds Multiple Bootstrapped Education Software Companies . Bootstrapping to $10M from Australia, Raising $25M from the US . Bootstrapped Y Soft to $30M from the Czech Republic . Bootstrapped from Belarus, Raised Money from Silicon Valley . Bootstrapped SproutLoud to $30M from Florida . Bootstrapped 2600Hz Using Services . A Serial Bootstrapping Entrepreneur’s Journey . Bootstrapped First, Raised Money Later from Udupi, Karnataka . Bootstrapped with Services, Raised Money, and then Acquired by Salesforce . Bootstrapping Niche E-Commerce Company Modded Euros . Bootstrapping KURU Footwear from Utah . Bootstrapped to $5M First, Raised Money Later . Ninth Wave Founder Bootstrapped Using Services . Bootstrapping Vantage Circle from Guwahati, India . Bootstrapping JobNimbus First, Raising Money Later . Bootstrapping Infragistics for 30 Years . Bootstrapping Zimit Using Services to $10M . Entrepreneur Couple Bootstraps an E-commerce Business Using a Paycheck and Crowdfunding . Co-founders Bootstrapped Using Services, then Raised $10M and Scaled to $16M . SearchStax Founder Bootstraps to $10M Using Services . Bootstrapping an AI Startup Using Services . Bootstrap to Exit and THEN do a VC-Funded Venture . Bootstrapping Using Services to $26M and a Fabulous Exit . Solo Entrepreneur Bootstraps with a Paycheck to over $15M . Bootstrapped and Later Raised Money from Oregon . Bootstrapping Evenica by Piggybacking . Bootstrapping a Vertical CRM Product using Services . Bootstrapping Using Services from Helsinki, Finland . Solo Entrepreneur Bootstraps First, Raises Money Later in Utah . Art.com Co-founder on Bootstrapping First, Raising $30M Later . Bootstrapping to Exit . Why is Bootstrapping So Important? . How Can You Play the Low-Probability Game of Start-up Funding Intelligently? . Don’t Go to VCs as Beggars – Go as Kings! . Excess is NOT a Requirement for Success . Bootstrap First, Raise Money Later . More Bootstrapping to Exit Case Studies . The Buy Side of Bootstrap to Exit Startups . Blitzscaling versus Bootstrapping . Bootstrapped Unicorns . Bootstrapped from Arizona to $10M . Bootstrapping Under30Experiences to $5M . Bootstrapping Algo.ai with Services from Michigan . Seed Investors Who Like Bootstrapped Startups . Bootstrapping a Niche E-commerce Company to $20M . Bootstrap Using Services . 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Master Bootstrappers with $1+ Billion in Exits . Bootstrapped Ultra Mobile to Over $100 Million . Bootstrapping a 2-Sided Marketplace to $10M . Bootstrapping a Virtual Company to Over $5M