Thursday, March 9, 2006
Interview with John Dilts, Maverick Angels
My interview this morning is with John Dilts, founder of the Maverick Angels, a new angel investment group here in Southern California. John is the former head of the Keiretsu Forum's Los Angeles chapters, and recently left to form this new group. I spoke with John to understand how he sees the Maverick Angels fitting into the angel investing landscape here, and what they have to contribute to the community.
BK: Congrats on your new angel group. Tell me, where does Maverick Angels fit into the landscape here for angel investing?
JD: Thanks - we have received a great deal of positive feedback regarding the new group and we are excited about our future. Maverick Angels has the benefit of both a regional focus and national affiliations with other angel networks. We have chapters in Los Angeles, Westlake Village and Santa Barbara that meet monthly. We believe that angel networks work best when their members can collaborate closely together rather than compete with each other within a larger group to invest in a given deal. Our affiliations with other angel groups across the U.S. and Canada will provide deal flow, resources and contacts beyond Southern California.
BK: What's different about Maverick Angels from other angel groups here?
JD: We like to say that we take "an entrepreneurial approach to angel investing". In other words, we are entrepreneurial in both our style and focus. We work to serve the needs of our "customers" which are, first, our angel investor members, second, our presenting entrepreneurs and third, our sponsors. We have to make sure that we provide a high level of value to all three groups. We do this by employing a full time staff that is focused everyday on creating a well-coordinated deal screening process where our members collaborate smoothly to evaluate opportunities. We have also created proprietary software called MaverickLinkTM which is focused on supporting the back end due diligence process following an investor presentation. In the end, we strive to make sure that we have the best members to provide capital, the best presenters to provide investment opportunities and the best sponsors to provide much needed resources. It is a lot of work, but a lot of fun as well.
Other differentiators of Maverick Angels include the fact that we will look at any deal that has significant upside, no matter what industry they come from, not just technology companies. Also, we have a charitable focus because we believe it is important to support our local communities.
BK: How is Maverick planning on serving the entrepreneurs in the community?
JD: Our commitment to entrepreneur education and support is a major focus for Maverick Angels. We believe that if we give back to entrepreneurs, educating them about the angel investment process and giving them the chance to show us what they can do, we can all win in the end. If we spend the time to contribute valuable knowledge, expertise and resources, our investment returns will ultimately be exponentially higher. That is why we created the One Day Bootcamp for Entrepreneurs and the Three Day Entrepreneur Workshop. Both will go a long way to educating the entrepreneurial community about what angel investors are looking for and to offer much-needed resources to aspiring entrepreneurs. It is like most things in life, you get what you give. We know that this more open approach will endear us to entrepreneurs and will enable us to attract and profit from some great new opportunities. Entrepreneurs can go to www.maverickangels.com for more info.
BK: There's been a lot of talk recently about angel groups filling the gap between startups and the kinds of deals venture funds are willing to do. What's your take on this?
JD: You're talking about the "funding gap" which is the space between the friends and family round and the venture round of financing. This gap absolutely creates an opportunity for us as angel investors. Since the tech downturn, many venture firms have moved upstream to invest only in deals with sizable revenue and significant traction in the market. At Maverick Angels, we want to see some level of validation as well, but that validation can come in many different forms. A credible, objective third party needs to say that they would use a product or service in order for us to take a seriously look at investing. Otherwise, we are talking about a concept which is usually too early for our group.
BK: I'm hearing and seeing there is a lot of new startup activity in the area. What's your opinion on the state of deal flow, and have you run across any companies as an angel you thought were particularly noteworthy?
JD: There does seem to be an increase in early stage opportunities in the area. It is a good sign that the number of local deals is on the rise. Specific companies worth noting are Interneer out of Culver City. This company has developed a powerful platform for enterprise process management with an initial focus on streamlining product development for large companies like Boeing, Bose and Harmon International. I also invested in a company called Voice Genesis based in Manhattan Beach. This company is doing some exciting things around enabling cell phone users to speak replies to written e-mails. Numerous wireless carriers now offer their service. I am impressed with the management teams for both of these companies.