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April 24, 2017
Investor Profile: Joe Caruso of the Bantam Group

For our second installment of NEVYs Awards interviews, I sat down with fellow Northeastern University alum, Joe Caruso. Aside from countless years spent within startups, Joe has been an avid mentor, advisor, and active angel investor in startups across multiple industries. His passion for helping founders came from a lack of mentorship in his own early journey through the startup industry.

Joe is nominated for the prestigious Angel of the Year award. His investments include notable companies such as Constant Contact, HubSpot, Carbonite, Crashlytics, and many others.

After chatting with Joe about his background and career, it’s no surprise that his humility shines through all that he does, including his reasoning of why he should win the coveted award.

Nina Stepanov: Tell me about your background - where did you grow up and why did you choose to attend Northeastern University?

Joe Caruso: I grew up in Roslindale, MA then I moved to Dedham as a teenager.

I became bored and frustrated while in high school, so I quit during my junior year and convinced Northeastern they should take me. I picked them because they were the only school I had heard of outside of the Ivy League colleges, which I felt were too much of a stretch for a high school dropout.
    
NS: Tell me more about your early career after graduating.

JC: Having had summer job experiences at Texas Instruments and AT&T, I knew I wanted to work for a small company, rather than a large one. My first job was at Teradyne, a company that made automatic test equipment for the semiconductor industry. When I joined the company was about 150 people and when I left it had reached around 700. Then I went to another small company, Autex, which was about 60 people and then to a startup called Cyborg. My life has been entrepreneurially focused ever since.

NS: What lead you to Cyborg and how did you get interested in startups? 

JC: It was a fluke phone call from a friend of mine who had introduced me to the founder. They were in an esoteric field called biofeedback. I helped the company pivot to a focus on applying biofeedback to clinical issues related to stroke and spinal cord injuries.  A few years later we pivoted again when PC’s were becoming popular to transition into a laboratory and factory automation company. 

During the last 3-4 years the company had significant success but it blew up because a few mistakes I made. I’d concluded that I was good at being a change agent; I was less of a manager and more of a goal setter and strategist. After Cyborg, I spent the next 10-12 years serving as CEO or de-facto CEO of companies in trouble…. In need of strategic change. That went well for me and it allowed me to get into investing.

As for how I got into startups, I had been entrepreneurial all along. As a kid, I had a neighbor with a lucrative paper route. I envied him because all I could do was cut lawns because I was too young to have a paper route myself. So I took some money I had saved and bought his paper route from him. He continued to act with the newspaper company as if it was his but I went and did the paper route and made all the money and tips in the process. That’s really where it all began.

NS: At what point in your career did you decide to go to Harvard for your MBA? Why did you choose Harvard for Marketing and Finance?  

JC: I went to Harvard Business School directly after Northeastern. I was torn between an advanced engineering degree and an MBA. I had scholarship offers for advanced engineering study at UCLA and Northeastern University but felt more affinity for the people and business side of life, so I applied to HBS. 

At the time, I hadn’t heard of “Harvard Business School” and naïvely called Harvard to inquire whether they offered an MBA degree. I applied without understanding it’s significance. Northeastern had offered me a great deal for a combined MSEE and MBA with a fellowship that would cover most of the tuition. I accepted their offer before hearing back from HBS.  When I received notification of acceptance to HBS, I was typing, yes on a typewriter, a letter telling them I had already decided to go to Northeastern.  My boss at MITRE, where I was working on co-op, asked what I was doing and spent the next few days telling me I was stupid to turn down HBS. He took me to see some VP’s at companies like Raytheon and Itek who universally laughed when posed the question, “What should Joe do?” To each of them it was obvious. While I may have been slow, it gradually sunk in that this “HBS” thing might be something I should consider, but still felt I couldn’t go because I’d already told Northeastern I’d be going there. Once again, the “big guns” of high tech were unanimous. I suspect they’d heard how bad I was at engineering, and would need something to differentiate myself when I graduated.  I ended up accepting HBS, initially without any major but eventually gravitated towards marketing and finance.

NS: You are or have been a mentor, investor, advisor, and board member of countless companies and multiple universities and high schools. Which has been the most fulfilling and which has been the most challenging thus far?  

JC: I’m reluctant to call out any one specific company or entrepreneur. but will say that the most fulfilling relationships have been those where there is complete openness and trust. No “selling” and no b.s. 

Exemplified in one case where I was asked to officiate at a founder’s wedding and in another where I was asked to be executor of his estate. In neither case did the personal connection make my counsel, which was at times brutal, any less direct. They knew I had their best interests at heart.  

As for most challenging, I’d say those entrepreneurs who repeatedly ignore advice, even when given repeatedly and with passion. Advisors and mentors can often be wrong, as I have been more than my share, but occasionally you just know with 100% certainty  that the entrepreneur is misguided. Seeing that advice ignored, especially when things end in what could be an “I told you so” scenario, it’s disappointing. 

Regarding schools, Roxbury Latin stands out. It’s an amazing institution and though I don’t know where it stands officially in high school rankings, I’ve seen few that match its rigorous academic standards combined with character-building built directly into all parts of the curriculum. Northeastern as well. They brought “experience”, referred to as cooperative education, into the mix long before internships became fashionable. And while I never attended, I have been involved in recent years with Olin College of Engineering because of my admiration for their “model” and the creative approach to engineering education under Rick Miller’s leadership.

NS: How do you find the time and motivation to do it all? Any signs of slowing down?  

JC: Using a metaphor that a friend of mine used years ago, “Labrador Retrievers Retrieve”. That’s what they do. 

We had a lab once. You could throw a ball into the pool and she would fetch it, once, 10 times, 100 times. That’s what she did. It was impossible for her not to fetch the ball, so for better or worse, that’s what I do. Every time I see a ball in the pool (e.g, an entrepreneur needing help) I dive in.  

I’ve been scolded occasionally by retired friends that I should “slow down” and “smell the roses”, but to me, I’m a labrador who enjoys chasing the ball. That’s my relaxation, education, and stimulation. Michael Jordan once said “Just play. Have fun. Enjoy the game.” and that’s what I do every day.
    
NS: You’ve been nominated for “Angel of the Year” at this year’s NEVY Awards alongside other local Boston giants, what would it mean for you to win it?

JC: Because I’m often “out there” in public view, people find it hard to believe that I’m shy. While I’d be honored should I win, I cringe when it’s even implied to be in a category of “giants”. There are numerous angel investors worthy of the award and I’m sure any one of them will be named this year, or some year soon. Three that come to mind immediately are Jean Hammond, Dharmesh Shah, and Michael Mark. There are others many others but I’ll leave it at that.
    
NS: Who do you think will win Next Pillar Tech Company?  

JC: OnShape has a fantastic team that knows what it’s doing. As for future nominees, I’d say keep an eye on Nantero.

NS: Now let’s talk about your investing activities through Bantam Group. What stage of investments do you primarily target?

JC: While I mostly focus on early stage (think: seed, pre-seed, even “pre-founding”) I’ve also invested in companies that are fairly well developed. I’m often a tiny player in A, B and later rounds.

NS: What are the top traits you look for in terms of investing into a company or founder?

JC: My primary filter is to be on the outlook for bright, passionate, high integrity people. I’m intrigued by “bleeding edge” technologies but equally intrigued by people doing something mundane, where outstanding execution is the key.

Nantero is a great example of bleeding edge technology. Now 17 years old and a couple 100 patents later, they’re just getting to commercialize what they’ve built.

NS: What sectors of technology, industries, or trends are of interest to you?

JC: My weakness is one of lack of focus. The proverbial “jack of all trades” and “master of none”. I have succumb to investing in some of the latest area of buzzworthy industries including virtual and augmented reality, blockchain, and IOT.
    
NS: How much do you normally invest in a startup?

JC: $25,000 plus or minus.

NS: What excites you about the current market in Boston?

JC: Activity remains high and in the last year or so, there are more people addressing more substantive problems. 3 or 4 years ago you’d see 2 guys and a dog doing an app over the weekend and calling it a business. Now people are solving real market problems, working on things that could be more platform-like. We’re seeing more in the way of hardware and deeper technology, AI, virtual reality, blockchain, and so on.

NS: Who do you admire or who has been the greatest mentor for you?

JC: It’s ironic you ask because the reason I’ve dedicated much of my life to being a mentor, is because I should have had one back when running Cyborg, I wouldn’t have made the mistakes I made. Having said that, at a higher level of engagement, while I didn’t realize it when I knew them, two people have probably had the most influence and affected how I approach things: my father and Alex d’Arbeloff (co-founder of Teradyne). He was a great listener and was incredibly thoughtful. 

NS: Outside of your day to day work, what are your personal interests or activities?

JC: I read a lot on a variety of topics including, (1)  the brain, mind and consciousness, (2) decision making and risk, (3) history/biographies, (4) philosophy, and (5) a variety of advanced science topics. Plus some esoteric subjects which are way beyond my understanding, but driven by intellectual curiosity.

I spend a lot of time zoning out. Long solitary bike rides; long walks in the woods or on the beach and the occasional trek with my grandchildren. I also travel, though infrequently. Annual trips to Florida and the occasional family trips to Italy.

NS: Let’s close it out with a fun one. What was the first album you purchased?

JC: When I was a kid, most people didn’t have a device to play music on, we just listened to the radio. I fooled around with music as a kid and even had a dance band but when it comes to listening, I mainly enjoyed Elvis Presley and The Beatles.


Nina Stepanov is a Contributor at VentureFizz.  Follow her on Twitter: @ninarstepanov.

Photo credit - Stuart Garfield