Q&A: Why this Seattle angel financier done 50 deals in a final 18 months
November 19, 2014 - Supermoon
Gary Rubens might not be using his possess startup anymore, though a male is positively gripping busy.
The maestro Seattle businessman has been on an investing goal as of late, creation 50 early stage deals in usually a past 18 months by his investment arm, Start It Labs.
Rubens is a longtime Seattleite, initial starting a manufacturing company in a liberality attention and later launching a home furnishing and fixtures e-commerce site that was acquired by Lowe’s in Dec 2011.
Rubens stayed on with Lowe’s for dual years after a acquisition, though over this past January. Since then, he started his own private family foundation and has dabbled in genuine estate investing.
He’s also spin one of a region’s many active angel investors, with a infancy of his money going toward Seattle-based startups that are usually removing off a belligerent like Fanzo, Reveal, IdealSeat, and Farmstr.
We held adult with Rubens to learn some-more about his investing philosophies and his opinions about a Seattle startup theatre in general. Read on for an edited excerpt from a chat.
GeekWire: Thanks for holding a time to pronounce with us, Gary. Let’s start with a apparent questions: Why are we creation so many deals right now, and how did this happen?
Gary Rubens: “One of a initial things we did was go and figure out who we indispensable to know in a Seattle area angel scene. People would tell me that we indispensable to accommodate Geoff Entress, Rudy Gadre, Chris Devore, Andy Sack, Andy Liu — all these people. So I systematically spent 3 months going around and assembly a pivotal tip 30 or 40 angel investors in a area. Not usually did we wish them to know me and what we was interested in, though we wanted to understand what they were doing and what they were interested in as distant as a whole internal ecosystem, and how we could presumably assistance and get involved. Through that we got introduced to some-more people who sent me understanding flow, and we also attended events and assimilated organizations like a Keiretsu Forum, Alliance of Angels, and TAGS.
So since did we invest? we wanted to deposit in a internal market, and we know there are a lot of people looking for income that have ideas and really struggle to get in front of angel investors. So, a lot of times it’s who we know, and if we don’t know anybody though we have a good idea, it’s tough to get those connections.
I usually deposit in companies that we feel we can supplement value to. If somebody brings me a medical device, I substantially don’t know too most about it or know anyone who can assistance over a check. But if we move me something around analytics, e commerce, amicable media, selling — anything like that — I’ll substantially deposit if they have a good team.
A lot of times I’m the lead financier because people need someone to start with before they can get a others, so I’ll take a risk. I’m probably more risk-willing than some angel investors because I’m unequivocally investing in people. People first, a suspicion second. A good organisation with a common suspicion will know how to spin it into a good company. A common organisation with a good suspicion will substantially fail.”
GeekWire: Why are you focused on companies in a sports, e-commerce, amicable media, and selling arenas?
Rubens: “I try to deposit in clusters. It’s around areas that we consider could use a little bit of intrusion like a genuine estate industry. The routine and price structure of how people emporium for homes hasn’t changed, and that needs to be disrupted.
I tend to deposit in these clusters around themes that can work together, though aren’t competing. I also like to teach myself about an attention we can learn some-more about. we can also assistance these teams assistance any other. Ultimately, in a hapless box one of them fails, maybe they can catch people from a other one. we don’t deposit since of that, though it’s a approach to supplement a small word to your bet.”
GeekWire: Since we have spent a past few years unequivocally removing to know other angels and entrepreneurs in a Seattle area, what have we learned about a city’s startup climate?
Rubens: “There are a lot of ideas out there and a ton of companies launching. In some cases, it feels like it’s comparatively easy for people to get income if they know a right people. In other cases, unequivocally good ideas are struggling since a founders don’t know a right people.
I feel like my pursuit as an angel investor is also to be a monitor and connector. we need to get people in front of other angels. we need to get them unprotected to a right people. If their suspicion truly is good, afterwards other angels will see it — they wish to see good ideas, though infrequently there’s not a approach to connect.
I would contend a theatre is unequivocally hot, very lively — maybe not as prohibited as a Valley, but we consider we’re definitely getting there. You’ve got a lot of tip angels in city putting their income into things that we know are going to assistance this businessman ecosystem in Seattle grow. There’s also a lot of income entrance out of Microsoft and Amazon now, with people putting their income behind into ideas, and people withdrawal those companies to start ideas. It’s flattering prohibited right now in Seattle with a lot of good ideas entrance out of here.”
GeekWire: What’s singular about a startup theatre here compared to other places?
Rubens: “The village is unequivocally wiling to work together. Everybody wants to accommodate new people that are in identical positions or that could presumably partner with or deliver them to people. I just feel like people are unequivocally peaceful to assistance any other here. A lot of angel investors and mentors are peaceful to accommodate with companies and not accept compensate or equity. Just demeanour during a Techstars module and how many people proffer to coach companies entrance through. There are lots of internal entrepreneurs and angel investors here who give time and income to assistance companies.”
GeekWire: Some people contend that Seattle could use a lot some-more angel and VC money, generally compared to cities like San Francisco, New York, and Los Angeles. Do we agree?
Rubens: “I’m not unequivocally certain on that. Obviously we need some-more angel investors out there who deposit a decent amount of money. My smallest investment is $100,000, since a lot of angels will do $10,000 or something. That is unequivocally formidable to assistance a association get any runway, and we have to have a lot of investors on your list to make it like that. we always advise startups to not take investors that are investing $10,000 unless we positively need it.
There are a lot of people entrance out of Microsoft and Amazon that have done a lot of money. It would be good to see them put some of that behind in and reinvest in a future.
There also needs to be some-more VC firms in town. While you got guys here like Ignition, Maveron, and Madrona doing a lot of deals, we consider some companies feel like they need to go to a broader marketplace in a Valley where some-more VCs are appropriation deals.
I consider some-more VC firms will come to Seattle if they start saying adequate angel activity here and Seattle-based companies removing exits. It’s usually a matter of time. The some-more we see companies like Google and Apple opening offices here, we consider you’ll see some-more income here both in angel and VC format. It will substantially usually take 2-to-3 years for that to unequivocally happen.”
GeekWire: You’ve done 50 deals in reduction than dual years. Are we concerned about people like Bill Gurley warning that a stream tech bang is starting to uncover signs of a dot-com bang (and bust)?
Rubens: “It’s opposite than a dot-com boom. I do consider valuations are a small out of wack, both here and in a Valley, though some-more in a Valley. People are removing saved with ideas that are have these absurd valuations. Even during my theatre as an early theatre seed turn investor, infrequently people come in with a top of like $7 or $10 million — I’m like, how do we figure out your value like that with no information yet? Unless they have some fantastic IP or a unequivocally singular idea, we give them a lot of pushback for 3 reasons.
One, we consider their expectations are off. Two, even if we was to deposit in an unrealistic valuation, we can’t collect adult a phone and call Rudy Gadre or Geoff Entress or Andy Liu or Chris Devore or any of these guys and get them to invest since they will get hung adult on a valuation. Three, it’s going to be unequivocally difficult to get a subsequent turn of appropriation if their seed turn gratefulness was out of wack.
I try to advise entrepreneurs to demeanour during a prolonged highway of what’s a subsequent step. we wish to talk to my associate angel investors about a product or use and not get hung adult on this absurd gratefulness this association has. we consider there are some ways we have a small burble going on with valuations, though we still consider there’s a lot of income out there and a lot of angel income to be had and we know, we don’t see a bust function anytime soon. we usually consider valuations need to be pretty good suspicion out if companies wish to entirely get saved down a line.”
GeekWire: Any advice for people in a Seattle segment that have income to invest, though are demure to do so?
Rubens: “If they are still busy or don’t have a time or don’t know how to go about investing, they should join a organisation like the Keiretsu Forum, Alliance of Angels, or TAGS. These groups provide a good approach to drop your toe in and start learning about angel investing. Those groups do a due industry with we so we don’t go during it alone. You get a lot of understanding upsurge that approach and it’s a good approach to drop your toe in and be means to deposit a small bit of income or usually learn about companies and watch a routine over a period of time.
People should remember how they got their money. They got it since of companies like Microsoft and Amazon and being during a right place during a right time, or possibly meaningful somebody and carrying a good suspicion or ability set that got them a job. Maybe they can give some of that behind to a system. It isn’t indispensably a free contribution, since they might finish adult attack it big. But we can also give behind your skills, time, and recommendation to these companies that we deposit in.
There’s also another approach they could look during it. They don’t have to deposit money. They can usually invest time and unequivocally assistance companies by offering recommendation and knowledge.”