Seed Capital From Angel Investors: Ira Weiss, Hyde Park Angels (Part 6)

By guest authors Irina Patterson and Candice Arnold

Irina: What do you do with the companies you don’t invest in?

Ira: We try to refer them to somebody else who may have an interest for one reason or another. Sometimes a company’s too late stage for us and we’ll refer it. Often times we’ll put it on hold and we’ll say, “We really like the idea. We like the business. We want to see a little more traction so if you can bring on more customers; keep us up to date and let us know.”

Ideally, we provide some other good home for them because then we add value and kind of pass them along. You know, the life of an entrepreneur looking for money is very difficult. They make lots and lots of calls, lots and lots of presentations. They knock on a lot of doors. For those who’ve done it before, if they’re successful entrepreneurs already, then they have a lot of doors open for them. But if they haven’t done it before, it definitely can be a challenge to finance their companies. It’s tough to be running a company that’s very cash constrained.

Irina: Are there any specific organizations that you routinely refer your entrepreneurs to?

Ira: One of the places in Chicago that we’ll often refer people to is the Chicagoland Entrepreneurship Center. They do a very good job with businesses. They have some resources available. Sometimes they’ll give startup companies grants to bring on a mentor. We also refer people to the ITA, the Illinois Technology Alliance. These are both quasi-governmental organizations. Other times, if it’s later stage, we’ll refer it to a venture fund.

Irina: Do you have a sector preference?

Ira: There are a few sectors that we’re definitely more likely to invest in than others. One is technology-enabled consumer and business services, probably more business services than consumer services.

We also do some healthcare investing, more on the services and technology side than on the life sciences side.

My partner, Sam Guren, has done a lot of investing in the retail space, the consumer products space. We haven’t actually as a group made one of those investments but I have. But we’ve been looking a lot at retail investments, which is a sector some invest in, but it’s relatively few.

Irina: Is it traditional retail or online retail?

Ira: Traditional retail. Online retail we absolutely do, any consumer and business technology services, online business, we’ll look at that.

Irina: What about enterprise software?

Ira: We don’t really do enterprise software. We have done quite a few software-as-a-service businesses. We invested in one company that uses a distributed workforce, and we’ve been looking at more companies that use a distributed workforce in creative ways.

Irina: What was the name of the company?

Ira: It’s a company called Retel Technologies. I think I mentioned that to you earlier.

Irina: What does the company do?

Ira: It takes information from a retailer . . .  most retailers have video cameras that are posted in the stores, and that video information is used very infrequently. What this company does is take that information and turn it into useful information, such as what is the average wait time in line for the store at various points during the day.

So, it’ll tell you exactly how long  your line is throughout the day. It will tell you how dirty your store is at various points throughout the day, which is nice because if you run a quick service restaurant like McDonald’s or Burger King, you don’t want your store to be dirty. It also uses the video for loss prevention, for theft and also for out-of-stock items. There are a lot of different things that their tools are being used for in retail businesses, both on the service side and on the product side.

Irina: In healthcare technology, is there any specific area you invest in?

Ira: I’ve made some investments [outside of Hyde Park Angels] in that space, one of which is in workforce management solutions. I am an investor in a company called Concerro, and that company helps hospitals and other health care providers manage, particularly schedule and staff their workforces, in particular staff nurses. Labor is the largest component of any hospital spent, and the spending ties into productivity and quality of service.

This segment is part 6 in the series : Seed Capital From Angel Investors: Ira Weiss, Hyde Park Angels
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