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Ash Fontana (Zetta Venture Partners): We enter at the seed stage. We like to be the the first and most important partner of the company.

By Borys Sydiuk

08 Jun, 2020

Ash Fontana is Managing Director at Zetta Venture Partners

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.

How it’s all started? How you decided to enter the venture investment business?

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.

What was the most unusual startup you ever supported? Or, maybe, your favorite?

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.

How many startup projects do you review per year?

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.

How startup team usually find you?  Do you wait for inflow or scout for interesting ideas and perspective teams?

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.

How you select startups to support? What are your criteria?

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. 

At what stage you prefer to enter?

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.

What is geography of your interest?

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. 

What is your due diligence procedure and how long does it take you to cover the whole way from the first meeting with founders to contract and check signing?

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.

And how big is a check you usually issue?

About 2 million USD, but they can be anywhere from half a million all the way up to five million USD. 

What is a fair share to take from a company for an investment?

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.

What qualities you are looking for in teams? 

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.

Investors prefer to work with teams. But have you ever supported a one-person startup?

I think, we have. It depends on how you define it – like a solo founder or one person with help of contractors.

With who you would prefer to work rather, with Steve Jobs and Steve Wozniak?

Both of them. If you want to start a successful company, you need both of them.

Have you ever rejected a startup and then regret it?

Many-many-many times. No name, sorry.

Accepted and regret?

No. Once you’re on board, you’re onboard and you just make it work. 

Can you name industries you really like, yet will never invest into?

I would never say “never.” Industries always change.

What books, movies, blogs, events can you suggest to startup founders? 

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.

Can you name three most breakthrough startups in the history?

Genentech, Google and I don’t want to name the third, because there are so many more. Let just stick with these.

Are you satisfied with what you do or do you think to apply your knowledge and skills to something else in the future?

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. 

What a desktop game can you compare VC business to?

Probably, more of a strategy game with a lot of luck, where resource allocation is really important, like Settlers of Catan or Dominion.

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About the Author

Borys Sydiuk

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