Tell us about yourself, your background, how long you’ve been with CAN.
As the Director, I screen all incoming deals and manage the due diligence process for the Network. After we invest in a deal, I manage the closing process and keep tabs on portfolio companies. I’ve been with CAN since pretty much the beginning – March 2017. Prior to joining CAN I was with a small lower middle market PE fund in NYC where I was an associate focused on screening, due diligence, and portfolio company operations, basically the same as CAN but for later stage investments. I have an MBA from Kenan-Flagler and in a prior life I use to trade high yield bonds for a boutique investment bank in New York.
Tell us about CAN in terms of history, industry focus, current funds, etc.
CAN was formed in 2016 and started looking at deals in the beginning of 2017. We call ourselves industry agnostic but typically don’t do real estate, biopharma or nonprofit deals because they don’t fit the profile of your standard angel investment. We’ve invested in 16 companies over 23 rounds and have invested over $11M since we started. We have about 200 members from all over the world.
Give us an idea of how many investment opportunities you see in a year and how many of those make it to an actual investment?
It’s hard to keep perfect statistics because so often we track companies over several months or years, but I’d say in a typical year I look at around 100-150 companies and we invest in 6-8 deals per year.
What are the two or three things you look for in doing your first review of a startup?
1. Team – we put great founders at the top of our list for investability. So often that can be in the form of prior entrepreneurial experience, but we have had first time founders that have proven themselves by being experts in their market and by being extremely coachable. And quality of Board members is much more important than some might think, particularly with younger founders
2. Market – we like big markets! So often I’ll meet a startup with a product that has a tiny market or worse, the founders don’t know how to properly calculate the size of their market. Knowing your market size is a crucial aspect of launching a new company and every founder should know how to calculate it.
3. Traction – we like to see momentum and traction. This can look very different for each startup but usually means early revenues, signed contracts, partnerships, etc.
What stage of company do you typically invest in? How much is a typical first investment and how much capital do you usually invest per deal?
Most of our deals are Series A round but we are open to Series Seed or later and like to at least see early revenues/early traction. Our average check size is around $750k but always depends on individual member interest.
Firms usually provide more than capital. What is your firm’s “value-add”?
We have over 200 members with a wide variety of expertise. Our members will often provide introductions, expertise, or act as valuable Board members and advisors. As a Network, we have many syndicate partners and can lead and put together a financing round.
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