Christopher Hill — strategic advisor at Retina AI, angel investor, and board observer for the city of Los Angeles talks about government support for the startup process, angel investing, and major mistakes founders make on their pitch decks. We also talk about some free resources that founders frequently forget to utilize and about the ways universities support early-stage founders.
Christophter's LinkedIn: https://www.linkedin.com/in/christopherahill/
Our interview with the founder of a free accelerator in Los Angeles - Miki Reynolds: https://www.fundraisingradio.com/Miki-Reynolds/
Some useful free resources can be found here: https://www.sba.gov/
And today's a guest speaker will have Christopher, he'll strategic advisor at Regina angel investor, and a member board of advisors Angeles, and this episode we'll talk about christopher's annual investing how he does it.
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How angel investors are different from vc's, especially in terms of how fast they make their decisions.
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And also, what kind of support does the government specifically and Los Angeles offer to the startup founders and why do some Sarah founders actually forget to use this support?
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So, Christopher, let's kick it off by giving us some background on yourself and on routine.
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Sure, so I have been a investor across a variety of sectors over the last 20 years through both private equity as well as venture capital.
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I've spent the last several years as a venture investor 1st, as part of Comcast Ventures, which was the corporate venture arm of Comcast, the corporation, which includes NBC Universal as well as now sky.
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And now, do most of my focus as an independent individual.
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Angel investor, at this particular time retina is actually a company that's based here in Los Angeles.
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They were a company that we invested in as through Comcast Ventures,
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but I really love what they're building and then and excited about the team and the product and so have continued to remain involved after leaving Comcast.
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So, now just serving an official advisor capacity to them.
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Nice. Perfect. So, yeah, let's start off by center question with a standard question to ask pretty much every single investor that comes down to fundraising radio.
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Would you like to invest in, in terms of field stage and average tech sites?
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Yeah, so as a angel investor, I focus on really Pre seed, and maybe sort of early seed investors. I typically like to see some level of a product that has been launched.
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I will invest in a Pre seed or Pre launch product. If I know the founder personally, and have a relationship, or if that person come highly regarded from someone within my network, I will invest broadly.
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But my core areas of focus are commerce fintech and prop tech in particular where there are those companies that intersect along those lines. My typical sort of check size right now is sort of between 25 to 75,000.
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But it's very clear absolutely love it when investors have a very specific investment basis, and not like, oh, we invest in everything. And then when you reach out to them, like, hey, I have a deal for you, it turns out they do not invest in this and 20 other fields.
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So thanks for being very specific in this. So you're in individual angel investor, which is.
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I personally love it, but let's talk a little bit about differences between individual investors versus more of an institutional investors.
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So, 1 of the major ideas that founders have, when they reach out to angel investors, is that those people can write a check basically on the fly after the 1st mean, which is.
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Very frequently myth, and I've seen very few investors who do this. Do you think that's actually the case? Have you seen a lot of angel investors who do this kind of investments or do most angel investors operate?
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Pretty much like vc's around, you know, we do diligence, et cetera, et cetera.
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Yeah, I do think that it is the sort of I'm going to write a check immediately is the exception rather than the rule. There are certainly some angel investors that will do.
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So, and in certain circumstances, like I said, if there are if there's an entrepreneur that is known to me, data is connected, or that I've known for a long time and said, look, I'm putting together around. Are you interested?
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There aren't going to be certain cases where I may very well say yes, absolutely. Count me in more likely than not though.
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I think many angel investors actually take longer than a traditional sort of institutional investor and the main reason for that. It's not their full time job when working as an institutional investor.
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Whether at Comcast or any other fund. That's what I was spending my time doing 12 hours a day that was both researching new companies and reaching out, conducting due diligence working with my portfolio companies.
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Everything I did was entirely focused around investment opportunities.
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As an angel investor, I am looking at a wide range of other activities that I may be potentially doing and there's not a certain level of urgency for, for many investors that I think.
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For participating in a certain investment, as opposed to when I'm working on it full time I think that angel investors, they look at this as sort of something that they'd like to do, but it's not a full time activity.
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And so they're also going to, in certain cases, not to, because of that not do the full level of due diligence and I'm going to be reliant on maybe somebody else they know to do a lot of the work. And as opposed to sort of the heavy lifting in order to be comfortable, making that investment.
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It's very accurate I've seen based on my experience. It's.
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Exactly how it works. So thank you for being very precise here. So let's move on to the major topic of discussion for today, which is the support of the government specifically support that Los Angeles provides to its ecosystem. So we're both.
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Basically, I'll send you a, so, let's let's talk a little more about this. 1st, let's start by the question about your position as a member board of advisors of Los Angeles. Would you do there? What does this organization do.
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Yeah, well, so that's actually with the state of California and that's the workforce investment board. And so that's actually a specific position.
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And then I was appointed to that is involved less focused on venture capital, but more about how to help.
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People in economies or locations, or in particular job functions that are shifting significantly because of changes in the economy or underlines the structural components.
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And I think that the, where that becomes applicable as it pertains to venture investing.
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Is that in many cases,
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there are existing industries,
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and we can talk about retail or tax versus Uber where they're going to be industries that are heavily reliant on,
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or a amount of labor and individual employees.
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And as new companies coming to disrupt that the existing companies, those comments are going to have to need to change what they're focused on and answer what they're going to be doing this from a professional job scale capability.
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And so that's sort of where we focus on.
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Are sort of within sort of helping identify, what are some of those core sectors where there's going to be continued job growth, for example, healthcare that is going to benefit individuals as well as sort of the state as a whole.
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Nice love. This sounds really interesting. Actually. Now, I kind of want to be involved in this kind of work myself, but that's a conversation for different day. Now.
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Let's talk a little more about the resources that the government specifically the government of Los Angeles or California provides to the startup ecosystem that's based in California.
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What do you think are the major resources that the government provides that maybe some vendors just don't know about.
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Yeah, well, I think it really depends on the individual sector.
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Los Angeles started up several years ago,
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a biotechnology court,
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which included resources related to office space lab space,
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just launched a out in woodland hills in conjunction with a public,
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I believe sort of a transit port or.
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And where where the city or any sort of governmental institution can sort of be helpful, is particularly.
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For companies that are.
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Focused on, that are ultimately going to have some sort of impact on the public at large.
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transportation is a great example if you think about the changes that have occurred over the last 10 years with companies,
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such as and lift and bird the municipalities,
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the governments have to respond with new regulations in order to make sure that those needs the public are met while the same time,
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sort of allowing for the encouragement and development of sort of new new modes of transportation and engagement.
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And so the transcript,
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the transit initiative is sort of a streamlined process that helps them provider of almost like a lab space where you actually can work with industries and sort of say,
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how is this practically going to work as opposed to sort of,
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by sort of like,
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do it now and ask for forgiveness later.
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Let's talk about the resources that the government provides. So off top of my head, I can actually think only about I think too.
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So 1 of them being greed 1 time, which is a specific killer year for super early companies, very well known and Los Angeles feels like reciprocating them as well and the other 1 day.
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I know off top of my head as a small business administration, which is nationwide for the United States, do you feel like there are any other really useful resources that people can utilize.
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You know, from the government, I think there are, it's going to vary, you know, there aren't a ton. I think obviously there will be exceptions. You think about the loans that were done in response to.
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You know, cobit over the last year, and how that was critical for a number of startups and companies and sort of their applicability to go and have that.
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I think in a lot of cases, the government as particular as it pertains to a place like Los Angeles. They don't have a ton of resources simply because the city is so big and they're going to be looking for a sort of making those particular impacts.
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But you will have various things where they often that the city will partner with say, with the universities to help, make sure launch various job fairs, particularly to focus on startups.
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That's been an initiative that Los Angeles has done in the past building.
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In certain cases, an actual department, or or sort of central point for startups to actually again interact with the government agencies to ask questions and everything, which, in many cases didn't simply exist 55 years ago.
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But a lot of is sort of helping potentially provide a clearing house between the local universities,
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the government itself and then sort of for some of these broader issues such as how can we run a job?
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Fair, how can we do certain things Los Angeles is so distributed from location perspective that building, or sort of promoting a, a lab or Hub the way that say New York did several years ago in partnership with Cornell?
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Maybe isn't going to have as as big an impact.
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Right speaking of universities, by the way I know that you are still mentoring a number of starts from heal where you personally graduated from. Right? So how do you founders from universities like that can reach out to people like yourself?
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Is it every single university has its own visually mentors program? Or is there a centralized program that I'm not aware of?
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No, it's, they're independent on each individual University and in many cases really depends on how central and focal is business and entrepreneurship to that school. So you take again in Los Angeles.
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You see, the entrepreneurship program at USC is excellent.
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They have a lot of engagement,
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a lot of founders who leave us having taken both business,
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or sort of gone to the entrepreneurship program that program also reaches out and connects very heavily with a lot of local other founders as well as investors.
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So that if you leave that program, you've worked through it sort of gone through all the context.
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You potentially have a pretty good sense of what the startup ecosystem looks like in Los Angeles and then, in certain cases, someone like you a senior yeah.
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They're often as an alumni network where you're able to reach out and try to connect with people who have those resources and then there's sort of a separation when things does very well,
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is that they have a lot of alumni programing that allows to provide opportunities for alumni to to interact and see what's going on with on campus and that provides a solution for current students to
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have an opportunity to just show what they're building with alumni who might be interested in investing or provide resources for their success.
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Right. So now that we've touched on universities as well let's talk a lot more about C, specific programs.
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So, have you seen, or maybe actually outside of the United States that has just recently done a great job in helping the startup eco system within this a, or is it just now, like, nationwide, mostly organizations that are doing the most impact.
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I think it varies and I think right now it's it's,
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you almost have to look at it at sort of Pre and post coded in terms of how with a lot of people re,
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evaluating where they can live and work.
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And how some of the sort of smaller more regional cities are seen, as an opportunity to attract talent to them, that they wouldn't. Otherwise.
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So 1 of the most dramatic versions I've seen is, I think it's, I can't remember if it's Tulsa, Oklahoma City or just the state of Oklahoma in general, but they'll pay you 10,000 dollars to move.
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You know, and that that's probably, you know, and that's a pretty extreme example of sort of we can do, but I think it's also a very good example in terms of the sentence.
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You have, you know, There'll be various cities, whether it's Columbus, Ohio, I think, has done this as well as a couple of programs in Texas.
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And so where they will, the government will approve the local municipality will help provide space or ideas for.
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This is where we want startups to start working on it's usually a public private partnership, because you do need someone to actually drive with initiative. But a lot of it is really going to be about helping facilitate and make things easier for someone to want to work. There and work and let their.
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Is there a place where you can find something like that? So, like, off top of my head, I cannot really come up with a right Google search for this kind of work. How would you recommend start founders or just.
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Future restarted founders who are listening to this episode right now. How would you recommend them? Find these kind of programs.
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Well, I think that the most important thing is, why are those Pro, what is the benefit that you're looking to get through those programs? You know, it's always a case of those can be valuable, but you want to make sure that you're focused on.
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You know, what are the end goals that you are looking to accomplish?
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And to what degree do those programs potentially impact or make your determination about why you want to be in a particular location?
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Because while those incentives can be helpful to start, if you're basing that they're not reasons necessarily base a decision around if ultimately, like, for example, it's going to impact your ability to hire people and grow your team.
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Great. That's I show you my next question before we move on back to you. I want to ask just 1 more question on the government support. And in this case, actually on the Government's.
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Bad support, I guess. Have you ever seen partnerships with the government when they start was doing actually pretty good. Then they decide to partner up with government on some particular project and that just led to a lot of not great things.
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Or is it not as frequent as 1 might think.
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It's very look, it's going to very significantly based off of.
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It's gonna base dramatically based off of the individual sector and location again. If you take something like transportation, for example, in this, going back to some of the questions, there are certain municipalities or certain cities.
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That have been much more open to allowing the development of autonomous vehicles. Phoenix, for example, as, you know, there's been a number of companies.
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That have been testing their autonomous vehicles out there and that's providing a lot of value to to both, both customers.
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But the government as well,
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as the company,
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if you look at anything that's space related,
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a large portion of those startups,
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at some point,
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are using some resources from NASA,
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whether it's public,
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private partnership or some or maybe some of the older facilities.
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There are a lot of cases where those are all going to be.
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You know, where there's a lot of value between those it certainly look, there's going to be those cases where there, maybe those partnerships don't always work out, but I don't think that there's a, a.
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A single overarching pattern it's really going to be about what this,
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what the goals are and whether or not there's an expectation I think,
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in many cases,
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or there's are are increasingly looking to the startup community to provide.
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Solutions to help meet a lot of the changing needs you said and maybe the best example of that is if you go back to when the launch of Obamacare and some of the issues that the website had back and whatever it was 2009,
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you basically had brought in a bunch of almost volunteers to help fix that and address it.
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And sort of a record time is, for example, where there can be a lot of potential centers.
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100% very accurate response. Absolutely. Love it. So, now that we're talking about some mistakes, let's actually talk a little bit more about mistakes that founders make, rather than the government.
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So, based on your experience, has it ever happened to you that founders reach out to you? With their pitch deck, where they were referred to you by someone that you trust and then they make a pitch and you're like, okay, now I'm not interested. They just butchered date page hasn't ever happened to.
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And if yes. What were the major mistakes that the factories made there?
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I mean, there's certainly been plenty of pitches that I was, um.
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Open to taking, and did not end up going live and look there can be any number of reasons. I mean, as an, as an investor as can, you see, my job is to take is to take calls and to be open as much as possible.
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So, you know, whether or not, it's a warm intro or not and I certainly like the warm intros better. My goal is to take as many of them. I think 1 of the most basic ones is.
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You know, not having done a sufficient amount of research about what kind of companies I may be interested in investing in, or what stage were for example 1 of the things.
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And it's an understandable mistake. But, like, people always assumed that Comcast at the time was only doing strategic and we would invest in everything. And so.
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I don't want people to only approach me about media deals, like, curious and you'll be surprised, but there's actually not a great. A lot of those deals haven't done very well from a venture perspective. And so we'll be those international where we were focused on.
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And so, I think sometimes not understanding what a particular VC is invest it's interested in. It's a common mistake and also making not understanding that.
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Um, particularly at a larger firm.
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That typically a individual investor focuses on specific areas and so you may be like, oh, this fund invest in call it gaming.
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May only be going out of 4 or 5, invest of the partners, or investors who focuses on that sector and you make the mistake of not going to the correct partner. Who has that domain expertise.
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Great do you think usually the partners from my experience, I think most of the partners just put it in their bio on LinkedIn, right?
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Is there any other place where the founders can just double check that they're reaching out to the actual to the right person?
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Well, the website for the respective venture fund or fund almost always outlines what that individual person's focus is.
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I mean, it's, you know, the funds website is designed to help provide information.
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Good 1, about like, what kind of founder how and why, and what type of founders should be reaching out to them again our job is to be our job is to be accessible. And so, if we're not communicating clearly what we're looking for, then we're not making it easier for founders.
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We're not making any easier for founders to find.
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100%? Yes, here correctly. I mean, 100% right that's basically a CBC job to take the calls to talk to the founders to find the best deals. If they're not talking to the founders, they're not seeing the best deals.
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Just just facts so now that we're.
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Talking more about mistakes I want to ask 1 more question on this, and it's the red flags on the pitch deck itself. So when someone sends you a pitch deck, maybe after the presentation may be actual.
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You see, during the presentation, what are the major red flags that you can see on the pitch deck or that you frequently see on the pitch deck.
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I think 1 of them is to.
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You know, 1 thing that I'm always trying to understand is the competitive landscape, and there's always some level of competition. Okay. And there's the obvious examples where, like, oh, if you're an E commerce well, like, how is Amazon competitive?
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But there may, maybe if you're, like, say, building something, that's a new type of content. Well, no, 1 else has this content. So there's no competition.
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That's not necessarily true because you're competing for somebody's time and energy.
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So, video games are a competitor or TV is a competitor, but but trying to I'm always going to end up having to do some research about what, where does this fit within the bigger ecosystem?
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And not being clear about where other potential players are competitors is always 1 thing. I think I do not believe in the there is no, I have no competition.
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There can be someone who's like, there's no, 1 has.
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You know, that they are not addressing this in the right way, or they have a different approach, or it's like, but there's always something that's going to be somewhat adjacent, even if it's just simply like nursha, like, the, if the competition is like, well, there's no.
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1 else out there, then the competition is well, why has no 1 built that before? Is there actually a need for it?
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100% that's very accurate. That's personally huge, enormous, enormous red flag for me when I review pitch deck as well. So if you don't have direct competitors, it does not mean you don't have competitors at all. It just has just physically impossible.
00:23:41.364 --> 00:23:45.084
You know, 2021, every single idea that you can think of, it's already been built. That's.
00:23:47.759 --> 00:23:56.159
Facts again, so now that we've touched on to this, any other red flags that you would like to mention to those founders who are maybe drafting their page decks right now.
00:23:56.159 --> 00:24:03.868
You know, I would say for you, the initial pitch deck, and there are people have very.
00:24:04.433 --> 00:24:10.584
Differing opinions on this. So, mind may be different is somebody else. I prefer shorter pitch decks.
00:24:10.824 --> 00:24:11.003
00:24:11.003 --> 00:24:11.513
I can get a,
00:24:11.513 --> 00:24:17.604
I think maybe 1 of the other things is something that gets too technical is,
00:24:17.604 --> 00:24:28.493
is while it may demonstrate that the robustness and the depth of the technology solution a lot of times it's hard to communicate in a pitch deck.
00:24:28.703 --> 00:24:42.413
And so that's something that I want to have a conversation with the founder with and understand how does something work that doesn't have to be overly communicated within within the deck because I'm probably,
00:24:43.523 --> 00:24:45.263
I'm probably going to miss a nuance in there anyway.
00:24:47.153 --> 00:25:01.824
That's that's another thing that I totally agree with you and that's pretty much every single founder that has gone through fundraising agrees with. I have a quote from 1 of the previous founders who is very technical founder, and who is building a solution in deep tech.
00:25:02.064 --> 00:25:13.584
But he's quote is and whenever I start talking in technical language, I just lose the ambassador. That's it. So, be aware of this be careful. Do not focus too much on the technical part of it.
00:25:13.973 --> 00:25:17.604
I know that I mean, we all know that you love the product that you're building, but.
00:25:18.743 --> 00:25:24.054
Investors don't care too much, so we do care. We just want to.
00:25:24.443 --> 00:25:34.013
It's like, but I guess I would say is that it's always 1 important things is to understand is like, sort of to that point is how is.
00:25:34.858 --> 00:25:42.088
You know, or maybe 1 of mistakes is like, I understand, you know, sometimes a founder will say this is the problem that I had.
00:25:42.088 --> 00:25:45.749
And what I am looking to understand is why is that problem?
00:25:45.749 --> 00:25:57.144
Applicable to a much bigger audience than just, you know, is this something that other people not only? Is it a problem for them? But is it something that is a big enough problem or challenge?
00:25:57.263 --> 00:26:04.763
They are willing to spend time money resources as a customer in order to address.
00:26:05.009 --> 00:26:11.723
Um, and I think that sometimes, like, there are people who become very passionate about something for good reason.
00:26:11.963 --> 00:26:24.144
But that doesn't necessarily mean that there's a big enough audience or customer base to build a, a company and most important building, a venture back company, which is a very different proposition than just doing a startup.
00:26:24.144 --> 00:26:29.963
Not all startups, not all businesses deserve or frankly need to be venture backed.
00:26:30.653 --> 00:26:35.574
I'm glad you said need to be, because there sounds too much for your 2 vc's.
00:26:35.574 --> 00:26:45.923
Honestly, a lot of startups, honestly, they just don't need venture funny because, I mean, venture capital is 1 of the most expensive types of capital out there that's ever existed.
00:26:46.134 --> 00:27:00.023
So be careful while deciding to, to, to go to become a venture backed company, because it's just drastic looking to change your future. So, now that we've touched on this, let's move on to the last question of today's episode.
00:27:00.054 --> 00:27:05.844
We choose a call to action. So, Christopher, would you want to, at least had to do as soon as the episode is over.
00:27:07.499 --> 00:27:10.979
Yeah, I mean, I, what I would like them to do is.
00:27:10.979 --> 00:27:20.159
If there is, you know, after after listening this, and with some of those red flags or or things, where they're sort of going through a pitch deck, or sort of a resources is sort of.
00:27:20.844 --> 00:27:32.513
Look and say, like, okay, what is a immediate need that I have and how exactly should I go about thinking about some, these responses go ahead and address that shortcoming.
00:27:32.814 --> 00:27:45.263
And what I mean, by that is, like, if if you've thought through pitch deck is, okay, well, how about have I actually my paycheck addressing, maybe some of the points that are being raised here or anything along those lines.
00:27:46.493 --> 00:27:50.124
Perfect yet great call to action. You can do right away. I'm pretty sure.
00:27:50.453 --> 00:27:54.203
Most of our listeners are actually somehow only seeing this broadcast on their computers,
00:27:54.203 --> 00:27:55.044
which is weird,
00:27:55.074 --> 00:27:59.034
but sincerely saying to this most likely on your computer,
00:27:59.064 --> 00:27:59.844
just go there,
00:28:00.023 --> 00:28:05.394
check out your own page that can make sure you don't have those red flags or that things that we mentioned,
00:28:05.423 --> 00:28:11.663
and also my call to actions can be do that follow christopher's advice and also check out the description of this episode.
00:28:11.723 --> 00:28:17.903
I'll leave linked in link to christopher's account and also to.
00:28:18.239 --> 00:28:24.419
Something else most likely, and that to link to an episode on fundraising, read it about.
00:28:24.419 --> 00:28:33.239
Agreed 110, so that Los Angeles area does sponsored the government and also a link to.
00:28:33.239 --> 00:28:48.173
Something else that is the question to Chris I'll follow up with him and ask him to share some links to government sponsored programs or just some government resources that he would recommend. So, do that full advice check out the links and the description.
00:28:48.203 --> 00:28:51.054
This episode is usually have a good date.