Seed Capital From Angel Investors: Ira Weiss, Hyde Park Angels (Part 7)

By guest authors Irina Patterson and Candice Arnold

Irina: What are your other notable investments?

Ira: I recently invested in a company called SURGiVIEW, which has an inexpensive way for surgeons to archive the videos of their surgeries and also to remotely broadcast the surgeries to other parts of the world.

I invested in a company a while ago called HxTechnologies (HxTI). We already invested and exited that company. It was bought by a company called MEDecision. It was a pretty good exit, but not great.

I’ve also done some investing in financial services technology software. There’s a company called Axioma and a spin-off from it called Mismi – I invested in that.  And then more recently I invested in a company called YCharts; as I told you earlier, that was an investment with Hyde Park Angels.

Irina: What do they do?

Ira: YCharts is a consumer-oriented financial website that helps people figure out which stocks and other securities to invest in. It actually occupies the middle ground between Yahoo! Finance and a Bloomberg terminal. It’s useful for people who do day trading.

Irina: What does Axioma do?

Ira: They have optimization and risk analysis software. It’s software for portfolio managers. If you’re either a qualitative or quantitative portfolio manager, then hopefully, you’re using Axioma software. And many are. It’s for small, medium, and large financial institutions that manage money.

Irina: What is your preferred investment type?

Ira: We usually invest in preferred stock, pretty standard for angel investors. We’ve done some convertible debts. Usually whenever we’d invest in convertible debt, we would include a cap valuation on the conversion. But those are the two things, either convertible debt or preferred stock.

Irina: How long do you prefer to stay invested?

Ira: My preference would be three to five years. It usually ends up being more like five to ten years.

Irina: Do you plan for that?

Ira: We are assuming, whenever we make an investment, that the money’s going to be tied up for at least five to seven years.

Irina: Do you actively look for companies to acquire your companies?

Ira: It depends on the stage of the company and how far along it is. We are always open to that. We’re not always actively searching for companies to acquire our company, but we’re always paying attention to who the most likely acquirers are.

Before I make the initial investment, I always want to know who are the five most likely acquirers at any point in time. And I want to see how they’re doing. Are they doing well financially, do they make acquisitions, are they acquisitive? Do they tend to just grow organically?

You could think that someone’s an acquirer just because he’s in the same space and your company might be really useful to him. But if it’s a company that very rarely makes acquisitions, then it’s much less likely that it will acquire you.

Irina: If you identify a potential acquirer, what do you do?

Ira: It depends on whether at the point we’re actively looking for the company to be acquired. If we’re not looking for the company to be acquired, then I’ll ask the CEO of the company.

I’m not going to go pitch the company without the CEO or the board knowing. Sometimes, many of those most likely acquirers are companies that may know about you already or know that what would be useful is some kind of business relationship, a partnership with them or a reseller arrangement.

So, the reason you may want to make an introduction is because maybe you’d be a supplier to them, or maybe they’re a reseller for your software, maybe there’s a certain kind of partnership that makes sense because of the industry that they’re in.

Irina: What has been your biggest investment success to date?

Ira: There’re a few companies that I would say have been the most successful for me personally. I personally invested in a company called Rackspace, which is pretty well known. On that, I was just a small investor. I think we were in the third round and that was a nice return – that was actually my New York group.

My New York group also invested in a company called Edusoft, and that we invested in and a year later it was acquired for cash for a really nice multiple on our money. Axiom has been a good investment because we’ve already gotten some money out of that.

There’s a company called Avid Radiopharmaceuticals that is getting close to liquidity that might end up being our best investment.  There’s a company called Cardiac Concepts that we’re invested in. It’s a medical device company. That’s the list of the most successful ones.

This segment is part 7 in the series : Seed Capital From Angel Investors: Ira Weiss, Hyde Park Angels
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