Seed Capital From Angel Investors: Saad Khan, Partner, CMEA Capital (Part 10)

By guest authors Irina Patterson and Candice Arnold

Irina: How do your companies usually exit?

Saad: Generally speaking, the vast majority of activity for any venture-backed company has been around acquisitions.

IPOs . . . there just haven’t been a lot in the past few years. I think in the Web space in particular, the vast majority of activity tends to be acquisitions. That isn’t to say that there aren’t opportunities to build big IPOs, but look at even the big companies that are around now on the social media side. None of them are public. Facebook’s not public. Groupon’s not public, yet. >>>

Seed Capital From Angel Investors: Saad Khan, Partner, CMEA Capital (Part 9)

By guest authors Irina Patterson and Candice Arnold

Saad: We’ve actually invested in a company that’s in the social recruiting space, and we did it three years ago. The company is  Jobvite.

In the case of Jobvite, the insight we had was look, this build-out of the social graph – and Facebook and LinkedIn and Twitter – is going to be extremely important for how enterprises go about executing their services. >>>

Seed Capital From Angel Investors: Saad Khan, Partner, CMEA Capital (Part 8)

By guest authors Irina Patterson and Candice Arnold

Saad: LiveOps also run a managed service where they have more than 20,000 agents who aren’t employees of the company [but] are contractors who are executing sales and customer support and other things for customers all over the world.

What’s interesting about that model and what really worked was this notion of crowdsourced work. How do you distribute work to people who are not necessarily employees of your company? How do you organize them? How do you create the flow and figure out how to allocate the right work to the right person at the right time? >>>

Seed Capital From Angel Investors: Saad Khan, Partner, CMEA Capital (Part 7)

By guest authors Irina Patterson and Candice Arnold

Saad: I think that the most difficult thing to find is exceptional entrepreneurs and exceptional teams.

Once you find them, everything else, as far as I’m concerned, is a commodity. Technology is a commodity, ideas are a commodity. Execution is the only thing that matters, and smart people figure out the right things to do.

Smart people pivot, and smart people build the right things and adapt to the market in the right way. So, if I have a smart team going after something, that’s the only thing that matters to me. >>>

Seed Capital From Angel Investors: Saad Khan, Partner, CMEA Capital (Part 6)

By guest authors Irina Patterson and Candice Arnold

Saad: I think the interesting thing about the world today is that if you put a small amount of money to work, companies with even small amount of returns – you know, with the $20 million to $50 million to $70 million exits – can still be great investments from a cash perspective. They can also be very attractive from a time horizon perspective.

We certainly are open to all of those kinds of opportunities. Some of the more “modest” successes are great for us from a cash perspective.

At the same time, some companies find themselves on a different trajectory where they have the opportunity to get very big, very fast as well. We certainly are excited about those, with the caveat being that it’s got to be somewhere in the three- to seven-year investment frame, just given the limitations on the actual fund life cycle that I just described. >>>

Seed Capital From Angel Investors: Saad Khan, Partner, CMEA Capital (Part 4)

By guest authors Irina Patterson and Candice Arnold

Saad: Almost all of the investments I have made have been before the companies had ideas for what they wanted to do. Again, it comes back to the same point. Exceptional people figure out the right markets to go after and the right technologies to build, and they know how to shift and adapt to where the opportunity is. >>>

Seed Capital From Angel Investors: Saad Khan, Partner, CMEA Capital (Part 3)

By guest authors Irina Patterson and Candice Arnold

Saad: I spend a significant portion of my life meeting with entrepreneurs either one at a time or, in some cases, we’re out there a lot judging business plan competitions and meeting people at conferences and events. So, in some cases, we’re meeting many more than one entrepreneur.

Roughly, I’d say I end up meeting 30 to 60 entrepreneurs a month. Of the things that I see, I probably meet with about 10% of the [people who send] pitches my way. >>>

Working Capital (Debt) Financing For Entrepreneurs: Heather Onstott, Director Of Small Business, LaunchCapital (Part 7)

By guest authors Irina Patterson and Candice Arnold

Heather: Sometimes, [I would say to entrepreneurs] “I’m interested. Here’s what I’d be willing to bite off, but here’s what I think I need to see you put in place first.”

And then, probably, ten – believe it or not – never call me back, which is fine. They’re not ready. And then the last, probably, eight to ten others, I ask for a business plan with financial projections, and I take a hard look at them. Of those, that initial scan probably weeds out another five to eight. >>>