Dharmesh Shah (a longtime lurker on my blog – but he did comment once!) made a seed investment in Backupify, a provider of backup services back in June. Backupify has just received a larger angel investment of $900k from First Round Capital & General Catalyst (as well as some other really well known angel investors like Jason Calacanis).
Why am I mentioning this? Because it’s important to get the word out about Boston’s angel investment community. Dharmesh and the other initial angels invested $125k in the first round, and Dharmesh is a pillar of the Boston startup community.
I was out with a well known startup’s development group the other night, and one of their VCs from the West Coast was out with them. He and another investor (acting individually, not as part of a VC fund) invested over $500k in a young developer’s startup after just a couple of breakfast meetings. Obviously this was in Silicon Valley. There is just not a lot of this fast decision making angel investing in New England. The West Coast VC made it pretty clear that he thought that investors in Boston would never be able to make these sorts of fast, company forming investments.
He’s correct, in that we don’t have a lot of the “have breakfast, get a check to start a company” investors in NE. So I think it’s important to celebrate the investors who do make company forming investments. I don’t know how much research/effort went into Dharmesh making the initial investment in Backupfiy, but regardless, he helped get something going and we should all be proud that there are investors in Boston who do this sort of a thing.
Finally, TC mentions that Backupify is looking to move HQ… Let’s make them feel welcome in Boston and see if they will move up here!
February 16th, 2010 at 5:50 pm
You're spot on, Healy. Reward good behavior.
March 5th, 2010 at 9:33 pm
Thanks for the kind words. I've never been called a pillar before.
I'm a massively big believer in quick decisions when it comes to angel investments. A few reasons for this:
a) I don't have the time for due diligence and research
b) Even if I did have the time, I'm not smart enough to do it.
c) Even if I were smart enough, there's usually too little data available anyways.
In the Backupify case, I'd known Rob for a couple of years (but all online). At the time I made the investment, I'd never met Rob or talked to him on the phone. My most recent investment decision was made in the span of about 6 hours (clock time) and 30 minutes (actual time spent). On a Sunday.
March 5th, 2010 at 9:39 pm
Wow, that is fast turn around time. If we could find a few more investors like you in Boston we could get some really interesting companies started.
Regarding your 3 points – I very much DISAGREE with b), but the other two are probably quite true.
Finally, this does show the value of developing a real presence/brand online, since you first met and got to know Rob online.
Actually, real finally, can you get Rob to move the company to Boston? Sounds like his team would be a good addition to the local startup community…
March 5th, 2010 at 9:46 pm
As you might imagine, with the whole "inbound marketing" thing, I'm a supported of building an online presence and brand. I'm surprised more investors — particularly VCs, don't do it. I have a draft blog post started that talks about why junior VCs and associates should reduce "sourcing" deals with cold calls and emails (lots of firms do this) and instead invest some time in just saying something useful and *pull* dealflow in over the web.
And yes, Rob and Backupify would make a great addition to the Boston startup scene. Working on it.
March 5th, 2010 at 9:51 pm
I was actually saying that it was good of Rob to have made himself known online; I guess I took it as a given that you had a presence on the web.
Some local VCs have good blogs etc. Rob Go comes to mind.
But the reason you are getting calls/emails from junior VCs is that Hubspot has shown up on enough "hot company" lists that they are just calling down these lists once every few months to see if anything has changed. And this strategy works (so far as it generates pretty good returns for the growth investors who pursue this investing strategy.)
March 15th, 2010 at 2:47 pm
Could be great news:
RT ScottKirsner @HealyHoops: heard from the Backupify guys here at #sxsw that they are making the move from Louisville to Boston: http://bit.ly/cOCiJY
http://screencast.com/t/ZTBiYWEx