Seed Capital From Angel Investors: Eric Paley, Managing Partner, Founder Collective (Part 6)

By guest author Irina Patterson

Irina: Do you have any sector preference?

Eric: We are seed-stage, software-enabled capital-efficient investors. So, within that there are a lot of things we can do, but our setup tends to lend itself to a lot of Internet investing.

We can do other things, and we are doing other things. I think it really depends on the company. >>>

Seed Capital From Angel Investors: Eric Paley, Managing Partner, Founder Collective (Part 5)

By guest author Irina Patterson

Irina: Do you have a number for what is a reasonable size?

Eric: I think there is no set number. I need to believe that the entrepreneur can build a big company. It depends what you mean by niche. A $500 million–dollar market where there is no real competition and the company can attain a significant portion of that of total available market might be unappealing to most investors, but it doesn’t necessarily bother me. >>>

Seed Capital From Angel Investors: Eric Paley, Managing Partner, Founder Collective (Part 4)

By guest author Irina Patterson

Irina: Do you think in terms of the valuation of the company?

Eric: We have a zone of valuation we think is appropriate for our thesis of investment as seed investors. If a company reaches a point at which it feels it has accomplished far more than what we call seed, then we are probably not appropriate investors for that company. It would be outside our valuation range. So, we have a fixed zone for what we think makes sense for our type of fund. >>>

Seed Capital From Angel Investors: Eric Paley, Managing Partner, Founder Collective (Part 3)

By guest author Irina Patterson

Irina: How can entrepreneurs who are seeking funding reach you?

Eric: I think you have heard this from a lot of people. It is not rocket science: Go on LinkedIn, figure out who knows us, and get them to vouch for you as somebody they know and respect.

There are so many inbounds calls that it becomes hard to figure out what is and isn’t credible. We are really people driven, so just seeing an interesting plan by itself without having some notion of who that person is does not motivate us.

To us, the best way to come in the door is through someone we know and respect who will actually say, “This is someone I know, and I think he or she is terrific.” Because LinkedIn is such a phenomenal tool, it is not that hard to figure out who knows us. >>>

Seed Capital From Angel Investors: Eric Paley, Managing Partner, Founder Collective (Part 2)

By guest author Irina Patterson

Eric: We view ourselves as unique for a handful of reasons. We have six out of eight entrepreneurs at the fund who actually run companies day to day. I think that is a really good model in terms of keeping us in our mindset as founders. When most of your partners are actually running companies every day, it is hard to deviate from your roots.

That’s the theory of why we’ve gotten into this. It has been pretty exciting. >>>

Seed Capital From Angel Investors: Manu Kumar, Founder and Chief Firestarter, K9 Ventures (Part 5)

By guest authors Irina Patterson and Ravi Bulusu

Irina: Do you have any interesting stories?

Manu: Sure. I met one founder in December 2008. I had my second and third meetings with him in January. The company had not even have been formed yet. It was only a single person or, rather, the founding team with one person leading. I told them in January, “I know that your round is going to be oversubscribed. So, here is my check.” He said, “Manu, I can’t take your check right now because we don’t even have a company set up yet.” >>>

Seed Capital From Angel Investors: Eric Paley, Managing Partner, Founder Collective (Part 1)

By guest author Irina Patterson

This is the eighteenth interview in our series on financing for entrepreneurs. I am talking to Eric Paley, managing partner of Founders Collective, a $50 million fund dedicated to investing in seed-stage deals. The fund has offices in New York City and Cambridge, Massachusetts.

Irina: Hi, Eric. Let’s start with your background.

Eric: I am a two-time entrepreneur. My most recent company was founded when I was in business school and was called Brontes Technologies. It developed 3-D intra-oral imaging technology for use in dentistry. >>>

Seed Capital From Angel Investors: Manu Kumar, Founder And Chief Firestarter, K9 Ventures (Part 4)

By guest authors Irina Patterson and Ravi Bulusu

Irina: And what character traits in a founder would clinch the deal for you?

Manu: I will probably answer that in the negative, meaning I can definitely identify the traits of people who I would not invest in. The number one thing there would be integrity. >>>