Duncan Davidson (Bullpen Capital): In Silicon Valley failure is a feature, not a bug.
04 Feb, 2022
Ash Fontana is Managing Director at Zetta Venture Partners. Ash launched syndicates at AngelList – the biggest startup investing platform in the world that now manages over $2B. He previously co-founded Topguest, a Founders Fund-backed company that built customer analytics technology for companies like United, Virgin, and InterContinental.
I was always very interested in investing and in computers, so I just combined these interests. When I started a company I worked in finance, in law, because I’ve studied law. This idea was a sort of coming about in lots of different ways. I’ve built the relevant skills and experience as an entrepreneur. I came my way to Angellist, that, obviously, is a pretty interesting place to be in the ecosystem. And I started investing.
I shouldn’t say my favorite, I’ll say my very first angel investment was in a company called Canva. It has a great design product, is doing really well. It was really all about the people and the product. They’re being people that I thought were some of the best product designers, they are building a quality product, making a world startup company, and I was glad to have an opportunity to work with them on that company or with the company. My first investment for Zetta was in a company called Clearbit, and again, having worked with the founder, seeing how good he was in developing products – this opportunity was the one I couldn’t pass up.
We review a lot of projects in programmatic or semi-automatic way, so that would be tens of thousands. We review a few in a different way, we see pitch decks of several thousands. I meet, at least, a thousand.
Most of what we find is proactive. We find them using various systems that were built or operate in various ways. Some teams find us when they read out articles on our website – we have the AI PlayBook on the website. They may hear us on conferences or talks or whatever else.
Of course, there is a lot of different ways in which we assess an Investment. For us the main thing – and I think the thing is quite different from other firms – is that we really assess the data strategy, is the startup generating or getting unique data and then using that data to build a predictive system, whether that’s a machine learning system or some other sort of systems that is able to make valuable predictions. We are really digging on that and doing a lot of work with the company in terms of understanding what experiments have been done and what was made to generate more unique data and make more accurate predictions. And we invest only in AI sphere.
We enter at the seed stage. We like to be the the first and most important partner of the company. We like to invest when we are the first institutional investor, putting the first couple of million dollars. Also the first investor takes a very active role in the company.
We focus on the five major research centers of AI – London, Toronto, New York, Boston, and San Francisco. We also cover some areas in Europe, other than London.
It really depends on a company, it depends on how far they are, how organized they are, on what information is available – it depends on the questions. Some questions are very easy to answer in a few minutes, some questions take a few weeks. Here we’ve Invested in a company after a couple of days of diligence, here we’ve invested in a company after several months of diligence. It really depends.
About 2 million USD, but they can be anywhere from half a million all the way up to five million USD.
It really depends. We do need to have a good share of a company, because we’re putting a lot of time and effort. Usually, it is around 20%, but we are flexible.
There are so many things to look for in a team. For us, it is very important that someone in the team has experience in the field of technologies, machine learning or worked with large volumes of data. It’s also important that someone in the team has experience in the commercial domain to which they can apply their technology. It’s good to have a balance of the two. There are also all sorts of generic qualities that you really look for in a team, things like resilience and ability to relate to people, high managerial potential, etc. We look for lots and lots of things.
I think, we have. It depends on how you define it – like a solo founder or one person with help of contractors.
Both of them. If you want to start a successful company, you need both of them.
Many-many-many times. No name, sorry.
No. Once you’re on board, you’re onboard and you just make it work.
I would never say “never.” Industries always change.
I don’t know where to start. There are just so many good books. Venture Deals by Brad Feld covers the basic stuff you need to know as a founder how to get a deal. In terms of starting a company, I think, there’s a lot to be said for Steve Blank’s methodology. I don’t think it’s the necessarily right way to start a company. I think, all of these books are the sort of silly to recommend, because what really matters is that you develop an expertise in your domain and that you’re really learning and understanding something that no one else can understand.
Genentech, Google and I don’t want to name the third, because there are so many more. Let just stick with these.
We should always be and we are always adapting, always trying to figure out what we can do better. We have a strategy right now, it’s working very well. But the market is always changing, so we will always try to reassess our strategy. So, it is very interesting and exciting place to be, and I really enjoy it.
Probably, more of a strategy game with a lot of luck, where resource allocation is really important, like Settlers of Catan or Dominion.