This is the first in a two-part series covering strategic technology red flags companies should address in preparation for investment discussions.

Investors go through an exhaustive due diligence process when deciding whether to invest in the latest tech company or during M&A analysis. Financials, market fit and growth, traction, and the founders and employees’ ability to attain what is promised are all thoroughly vetted.

One area they are likely to study is your technology strategy—potentially examining the intricacies of the technology, your infrastructure, and whether the existing technical staff is strong or in need of critical improvements. Is your technology and technology strategy solid?

The three "Ps" of technology product development—people, process, and platform—is a part of every investment decision, regardless of stage. Increasingly, investors are tapping in-house experience or enlisting experts that are fully versed in technical areas and have seen patterns emerge over time to more accurately evaluate potential risks.

With digital transformation across industries making almost every company reliant on technology, stability and a sound technology strategy for growth adds great value to companies looking to expand their investment opportunities. In the first part of this two-part series, we’ll look at some of the common tech risks related to platforms and infrastructure that investors may flag as problems.

TECHNICAL DEBT: WHAT WILL IT COST TO OVERCOME?

It’s an old term, but unfortunately technical debt still runs rampant today in most technology product companies. More mature, longstanding companies being considered for M&A may have amassed large amounts of technical debt by building products and infrastructure on older technologies, setting aside larger refactoring efforts, while trying to get new customer-facing features out the door as quickly as possible.

It may have seemed like a smart decision at the time, but try to address technical debt where you can and have an honest assessment of the cost to fix it. Some companies build a great looking offering, but have to cut corners to quickly get to market. We all know investors want to incur the least amount of cost to fix problems and realize high growth as quickly as possible, so having a good handle on any technical debt will be essential as you enter into funding or M&A discussions.

MVP: IS MINIMAL SUITABLE FOR THE MASSES?

Minimally Viable Products (MVPs) are designed to be lightweight and are a way to validate customer needs. But what happens when the “product” goes into true production? If the MVP was not built with a clear roadmap on how to scale (and scale rapidly), companies may quickly lose momentum, suffer painful outages, forego sales opportunities (revenue), lose their competitive edge, and incur additional costs as they try to react.

The bottom line is (as the scaleable agile framework cites) “crappy code can’t scale,” and if your eye is on quick scaling, how to do that should be a part of your strategy (and contingency plans). If there are concerns about scaling, or you need help in reconciling growth plans with your roadmap and the smartest way to scale, many companies seek counsel to advise on the smartest and most cost-effective path forward (making you look really smart to investors).

The moral of the story is that if you identify the issues early on and begin a measured remediation plan to address them, the happier both customers and investors will be.

TECH STACK: RISK OR REWARD?

How was the product built? What architecture and frameworks were employed? Is it largely based on open source, stitched together to create a functional product? This may be a problem in the future, including impacting IP rights, security concerns or vulnerabilities, and defining “ownership” when it comes time to potentially sell the company.

Just be careful in understanding all of the underlying potential issues and address those before the conversation happens with your investor partner.

LEGACY PLATFORM: WILL OLDER PLATFORMS PERFORM LONGTERM? 

Technology moves at a lightning pace today. What may have been a state-of-the-art platform when a company first started building a product could be antiquated (or worse—discontinued or unsupported) by the time the product goes to market. This “hot or not” trend is especially prevalent in the software development world. The latest and greatest today is quickly usurped by something better.

Remember when Ember.js was “the latest” - only to fade from favor for Angular.js? And what about Angular 2? Many in-house products are built with no clear-cut plan of whether portions are cloud-based, and no ability to migrate the product to the cloud.

Be prepared to explain how the code was built and why underlying technologies were chosen at the time to make your product state-of-the-art and prepared for the future.

INFRASTRUCTURE: READY TO GO OR NOT UP TO THE TASK? 

A company’s technology requirements for growth go well beyond the product itself. All departments including operations, finance, marketing, sales, service, and development must have the right infrastructure and systems in place to truly be successful.

Early stage companies often struggle to strategically choose the right path for enterprise applications like ERP, CRM, or SCM that balance functionality requirements—now and for the future—with cost effectiveness. What may have seemed like a cost effective decision in the early days could actually be hindering your growth today. Even more mature organizations may be operating on antiquated infrastructure solutions that will require investment in order to pave the way for growth.

Technology is complex and infinitely ever-changing. Having experts who are tapped regularly to provide understanding and guidance around technical red flags before they become problems or risks can go a long way in making a company attractive to investors. With every company today relying on a digital approach to business, taking stock of weak spots and areas in need of improvement can pave the way for successful investor discussions. 

Peter Karlson is the Founder of NeuEon. Follow NeuEon on Twitter: @neueon

Image via Shutterstock

Employees make a company. They define its philosophy, shape its culture, and drive success and failure. So, it’s not a stretch to argue that how a company recruits and staffs itself greatly influences its identity and evolution. A strong, focused recruiting program helps build and fortify a great organization. But in a market where competition for talent is fierce, how does a sharp recruiting program maintain its edge?

Enter the employee referral.

A deft employee referral culture is an essential component for any recruiting program to achieve immediate and long-term success for a growing organization. And I’m sure if you’re a technical recruiter in an uber-competitive market you hear it every day: “Employee referrals! The inside track to passive candidates... The best way to find qualified candidates… Faster to hire, highest conversions, longevity, and higher job satisfaction... People trust their personal connections... Statistics show..." Blah, blah, blah.

Yeah, I get it and 100 percent agree. In the short term, on-target referrals supercharge the recruiting process. They make it possible for critical roles to be filled with top-notch, hard-to-find candidates in a fraction of the normal recruiting cycle’s timeline. A solid referral can be the light in the darkness, that drop of rain in a dried up candidate pool, or the missing piece to your recruiting puzzle. More importantly, a great referral culture begets happy, long-term employees. It grows and fosters a company’s culture and makes a company better, faster.

HOW CAN YOU SUBMIT QUALITY REFERRALS?

Referrals are more than just who you know. It's not just the quantity, it's the quality. There’s an art to submitting a quality referral. It requires common sense, timing, work, honesty, and perspective in order to get it right.

Remembering this will get help you have quality referrals over and over. Plus, getting it right will usually cause a recruiter to drop everything and call your referral!

COMMON SENSE

Why are you referring this candidate? I feel compelled to answer this with a brief example of what NOT to do. Maybe your introduction of a referral goes something like this:

“Hey, here is the resume of a buddy of mine I play beer-league hockey with. I don’t know if he’s interested or qualified for anything, but can you find a role for him? That bonus would be sweet right now!”

Don’t do that. Ever. Why not? Refer to paragraph one. If a referral bonus is your only motivation then you’re doing it wrong.

TIMING

Every company strives to hire amazing people. But that’s only half of the solution. Pro Tip: Don’t start with a referral in mind. Start with a role. A recruiter spends a lot of time talking on the phone, but who are the people on the other end of the line? They’re not just amazing people. They’re candidates who can potentially fill open roles.

You may have a buddy (or 12) who’s an amazing person and that's a great start. But if there’s no open role posted on your company's job board that matches your referral, it's OK to wait. I know you’re excited to submit that resume and you already told him, “I’m calling.”

But I also know that no matter how great this guy is, if there’s not a role for him now, calling him isn’t going to magically create one. If that referral of yours is a rock star now, he will be a rock star when a matching role opens up.

WORK

So how do you match a referral to a role? Don’t just read the titles on your company’s job board. Read the role requirements, too! And if you can, verify that your referral has the skills required, that the location works, and that the level of seniority fits.

In other words, do a little homework for that referral bonus! It will pay off in the end… literally. And if you aren’t sure on anything, then ask your recruiter. We are here to facilitate the referral process and are happy to help you identify the key skills we’re looking for.

HONESTY

Another thing to consider is that your referral is a direct reflection of you, so keep in mind that you’re essentially reference check No. 1. Ask yourself these questions before submitting the referral:

1. “Would you give this person a glowing reference?”

2. “Are they reliable?”

3. “Can they effectively communicate?”

4. “Would you want to work with them again or hire them if given the chance?”

The key is to be honest about your referral because those red flags will eventually fly. A recruiter will trust you as a partner until there is a reason not to.

PERSPECTIVE (THE BIG PICTURE)

If you love your company culture, then one could assume that you would want like-minded people to join into the cultural ecosystem.

As an employee, you should have your finger on the pulse of the company. You are an insider, an expert. You know what kind of person thrives and what kind of person falters in the work environment. Use that to your advantage when you refer somebody. Will this person be happy here and will the company benefit from hiring him or her? These are crucial points to consider.

Hiring based on cultural fit does two things: First, it increases the likelihood that a new hire becomes a happy, long-term employee with job satisfaction. Second, it ensures that the company culture (the one that you love) will endure.

PREP YOUR REFERRAL

At this stage, you should feel comfortable with your contribution to your company’s referral program.

So what’s next?

An employee referral doesn't end after you hit the submit button. Make sure they’re aware that they may get a call. Prep them on the role and the company. Make sure they're generally interested. All these little things help the process go. Also, if I'm dropping everything to call a candidate, then I’m convinced. Now convince your referral! Why is your company great? Why should your referral consider a change? Your referral trusts you way more than Mr. Rando Recruiter. Your conviction can help the process go faster.

The angels sing in a recruiter’s ear when someone says, “Hey, I have the perfect candidate for your role. I worked with him before. She/He is a rock star, would make a great fit, and is waiting for your call!”  

If you’ve put in the work and you can honestly foresee a long-term, mutual (bene)fit, your referral will have a stellar chance at achieving success.

Brian Aleman is a Sr. Technical Recruiter at Carbon Black with 10-plus years of progressive cybersecurity industry experience and knowledge.

A friend of mine recently wrote an article about a simple interview question to help identify if someone is a dreamer or a doer. It’s a pretty straightforward approach to ascertain: Ask about what the person feels passionately about accomplishing during his or her lifetime … and then follow up by asking about what actions he or she is taking to actually achieve it.

It’s easy to determine if someone is goal-driven by asking a few simple questions. Turning those questions on yourself isn’t always as straightforward. When was the last time you looked in the mirror and asked yourself how you’re turning your passions into reality? Personally, I don’t believe in fairy tales. I believe in writing our own happy endings, and then working backward to determine how to make them happen.

I’m one of those odd people who puts my goals in front of my face every single day so I can’t ignore them. One of the walls of my bedroom is covered with whiteboard paint (stop laughing, I know it’s weird) and I have my 2016 goals mapped out in a graphic visual. As a result, I’m forced to look at them every morning when I wake-up. Somehow, with these goals all mapped out in bright colors, they seem far less intimidating. I’ll admit, some days I’d just like to erase the whole thing and select far simpler items to tackle. And yet, really, what fun would that be?

Just as our parents taught us when we were children, we are all capable of accomplishing just about anything we set our minds to. Unfortunately, we often get trapped in our own ways of achieving these things. Whether it’s hoping the perfect partner will just walk into our lives, or that we’ll get the job of our dreams just because we think we deserve it, life is just not that easy. At the end of the day, almost everything incredible that happens in our lives isn’t just the result of “good luck.”  We need to work hard for it.  

So how do you make your dreams and goals become reality? Let’s assume you’ve allowed yourself to think big and you’ve selected goals that are realistic and true to you. It’s easy to write them down or make the audacious declaration, “I am going to accomplish X.” Even then, however, it’s possible to find yourself throwing up your hands in frustration before you even make a dent. To set yourself up for success, here are a few things to consider to help you get back on track:

1. BELIEVE YOU CAN DO IT

It’s easy to say, “I’m going to lose 20 pounds” or “I am going to get that promotion.” If you don’t emphatically believe you can actually do it, you will self-sabotage before you ever get started—consciously or not. Set goals you truly believe you are capable of achieving.  

2. PICTURE SUCCESS & MAP THE PATH

A written goal is one thing. Being able to visualize what success looks like gives you a powerful mental roadmap to help support those efforts. Pre-determining a successful end point will allow you to then work backward to plan the steps you need to achieve to truly meet that happy ending. Be realistic. Create a series of smaller steps: Go from A to B, B to C, etc. It’s far easier and less intimidating than attempting to jump from A to L to Z.

3. GATHER SUPPORT

You can’t do it alone. Share your plan and goals to build a support system that can help you along your journey—and shun the naysayers. Once I set a big goal, I share it. Why? Because I never want to be one of those big talkers who says I’m going to do something and fails to act on it. By sharing what it is I’m trying to achieve with a trusted group of supporters, I can better hold myself accountable to not merely make progress updates to myself, but to let them know as well.

4. MAKE PROGRESS… EVERY SINGLE DAY

Sometimes it’s hard to get started, but if you build in time to work on your goal every single day, you form a habit. It’s nearly impossible to not make progress when something becomes a routine daily priority. Create checkpoints weekly, monthly, etc. to assess how much progress you’re making, whether or not you need to rethink your strategy, and dial up the effort if or when it’s necessary. Don’t forget to weave in a little fun to the mix to keep yourself motivated along the way. If it becomes a drag, you’ll be far less inclined to stick with it through the rough patches.  

5. CELEBRATE

Hooray! You’ve done it! Pause and celebrate all the hard work and energy you’ve put into accomplishing your goals. Once you’re in the groove of making progress, stepping closer and closer to achieving your goals and dreams, it becomes far easier to take on the new challenges. Just don’t forget to reflect on what got you there.  

Life isn’t about fairy tales, but we all are capable of living the life of our dreams. Think big, plot your approach, and work toward achieving your goals every single day. I’m not your mom, but I will echo that you can do anything you set your mind to.

Now go write your own happy ending.

Christina Luconi is Chief People Officer for Rapid7, where she leads strategic people initiatives, focusing on the entire employee lifecycle. Follow her on Twitter: @peopleinnovator.

Image via Unsplash

You know that famous quote, “Find what you love to do and get paid for it?” Isn’t that everyone’s dream? Perhaps you have an unstoppable personality, but what if you have no idea how to channel it into a paying job? Alternatively, what do you do if you don’t know what your passion is in the first place?

Here are a few ideas to get you started.

THINK BACK

Take inventory of all the times in your life you truly felt excited and energized. As you do so, connect the dots between those events, and you just might see themes emerge.

Maybe you learn that you are really interested in leading people, as evidenced by your time as a camp counselor and captain of your high school lacrosse team. Perhaps you realize you really love solving problems and are at your most motivated when you are heads down coding.

We are all unique as individuals, and each of us has our own distinct blueprint for what inspires us. Figure out yours, and you are halfway there.

CHECK YOURSELF

(Before you say “no” to what inspires you).

In other words, be honest with yourself about your current state of mind and what perceived (or real) roadblocks are ahead of you. Rather than thinking about what you can’t do, don’t have access to, and other limitations, think about turning your own life puzzle upside down to change up your perspective.  

If you are surrounding yourself with negative people, for example, chances are you’ll adopt their downer energy. Partner with others who are pursuing their own passions, and expect to see a change in your own approach.

PULL IT TOGETHER

I am passionate about understanding what drives people. I love building something from nothing. I enjoy seeing people accomplish things they never thought possible. For me, these passions were woven into a career in startups and people strategy.

It took me a bit of time to understand the different components and how they might work together to motivate me and drive value for a company. When I couldn’t find the environment to do that, I helped to create it.

It doesn’t come overnight, but if you have a clear sense of what is important to you, you have the makings of the roadmap to find your passion.

MONETIZE  

I have a friend whose passion is drawing – generally speaking, not the most lucrative field. He also happens to have a desire for a “big” lifestyle. As a result of both realities, he needed to figure out how to make money from his passion and maintain the flexibility that might be required to achieve his desired lifestyle. He had to find his niche and figure out how to meet the needs of that particular audience once he found it.

It took some creativity and a few hard-earned lessons. Not everyone was going to pay him for sketches, regardless of how good they might be. However, what he did find was that illustrations were a hit with small businesses that were hungry for website content. Years later, he has built a great little business, marrying his talents with those willing to pay for them.  

BELIEVE IN YOURSELF

It’s often hard to put yourself out there and put a stake in the ground for what’s truly important to you. To follow your passion can sometimes be a lonely road. And yet, if you let the naysayers get in your way, you will self-sabotage.  

Surround yourself with people who believe in you, and determine milestones to help you make progress and build confidence in yourself.  

The greatest accomplishments in life start with passion.  Find yours, apply the above advice, and you’re on the path to a fulfilling career. 

Christina Luconi is Chief People Officer for Rapid7. Follow her on Twitter: @peopleinnovator.

It's perfect timing for Matt Fates' Investor Q&A on VentureFizz. Just last week, Ascent Venture Partners led a $12.9M Series B round of funding for Pwnie Express in Boston, a leading provider of device threat detection. Matt will be joining Pwnie Express' Board of Directors.

Fates is a General Partner at the firm and has been investing in Boston startups since 1998. Prior exits include Interactive Supercomputing (acquired by Microsoft), Cymfony (acquired by TNS), Fidelis (acquired by General Dynamics) and others.  

Learn more in my Q&A with Fates below.

Keith Cline: Tell us about your background.

Matt Fates: My father was a fighter pilot in the U.S. Navy and I was born at the Navy Hospital in Norfolk, Virginia. My parents said it cost them under $5 in medical bills, and yet at times they still questioned whether it was worth it. I was the kind of kid who did not like to be told what to do. After Dad’s service, we moved to the Boston area until I was 9, then to London, England for five years (a terrific experience), then back to Boston. I have a younger brother who lives in La Jolla, California today. I don’t like to talk about the weather with him.

I went to Yale because it was the best school I got into and a great opportunity. It ended up being a lot of fun too. I didn’t know exactly what I wanted to study, but I had been a bit of a computer nerd since the advent of the Commodore 64 and I ended up being drawn to Computer Science. Senior year, I did the first senior project in Javascript, although I still prefer good old C as a programming language. I was savvy enough even then to know that business skills were important, and the closest thing was Economics, so I double majored. The only overlapping class was Econometrics – basically economic statistics. If you could consistently stay awake through that one, you just weren’t enjoying college enough.  

Fates and the Yale men’s Rugby Team, 1995

I was also lucky enough to meet my now-wife, Katie, at Yale. Of course, being a nerd, I met her online initially (seriously) as she chatted with me using the ancient Pine system. Thank goodness she turned out to be an attractive girl and not some creepy old dude!  

After college, I decided to go the business route instead of becoming a programmer at Microsoft or Oracle, who were the big tech recruiters at the time. I went into investment banking, joining the leading tech investment bank of the day, Alex. Brown & Sons. I worked with some wonderful people, many of whom are in the broader venture community today. I was involved with some great companies as they went public or through M&A transactions, including Ciena, RSA Security, and BB&N.

While I learned a lot, I decided this career was not for me as it was too far removed from the actual technology and the people who were really making it happen. I moved to Norwest Venture Partners, a leading bi-coastal venture firm in 1998, and worked with two general partners as the tech world raced toward a bubble. While things certainly became overheated by 2000, again I got to work with some great companies, like Broadband Access Systems, Yipes Communications, Goldwire technology, CoSpace, Authentica, and Authoria. As the age of “irrational exuberance” piqued, my prescient boss suggested that he was not going to invest anymore given the insane environment, and I should think about business school.  

I chose Tuck as many of the people that I respected the most from my four years of work experience had gone there. I was also amazed that every recent alum I called when doing my due diligence on the school called me right back. It’s no surprise both Dartmouth and Tuck have among the most loyal alumni anywhere. Tuck offered the opportunity to stay in the New England area, which I welcomed as I felt it was a great place to do B2B tech. Tuck was also very team oriented and fun, and I was able to get back to sports like ice hockey, rugby, and skiing (I converted to telemark skis while at Tuck to get access to the backcountry).

KC: How you did you get into venture capital in 2002? What was the investment climate like back then and has that period of time helped you over the long run as an investor?

MF: I actually got into venture capital in 1998 at Norwest Venture Partners, and then returned after business school in 2002, joining former Norwest colleague Geoff Oblak at Ascent Venture Partners (amazing I was able to fool him twice – hard to do). Getting back into venture when I already had some industry experience was easier than doing it cold.

The venture investment climate was still very much in recovery or hangover mode in 2002. The massive amount of capital that had been raised and invested between 1999 and 2001 still lingered, and even though many startups had already shut down, there were still some fighting to survive from that era. Those that were able to pivot and adjust to the reality that capital was not an abundant resource managed to provide some decent outcomes for investors over time.

Witnessing that cycle first hand, from the mid-90s through 2002, and then the next one from 2003 to 2010, was incredibly valuable and provided perspective that you can only get through experience. Like so many things in life, venture investing is a cyclical industry. As it continues to mature and change, the booms and busts are perhaps not as severe, but it is still a very risky asset class that requires real expertise to properly navigate.

KC: You have been an investor in the Boston tech scene for several years, how has the ecosystem evolved since then?

MF: There are a number of significant differences today versus the mid- to late-1990s. 

First, entrepreneurs on average have gotten younger. It used to be that folks generally worked at established companies initially, then identified a problem at some point in their career, and felt they had the ability, financial flexibility, and enough training on how business works to go solve it. This still happens today, but many young people seem to want to skip the traditional job, and go straight into entrepreneurship and startups. In many regards, I don’t blame them. Startups can be exciting and dynamic places to work where each person can see the difference they make. But it means they are really learning as they go, lack formal training, and usually don’t have any special insight into an industry or particular problem. These can be important trade-offs. Sometimes not knowing how “it is usually done” is good thing, but sometimes that means making the same mistakes others have before you.

The funding landscape itself has changed a lot as well. There is far more angel and seed capital available today for example. On the venture side, many of the firms that did early stage investing in Boston 15 years ago are now either gone or have become much larger. They focus on later stage deals that really look more like private equity or mezzanine/growth type investments to me. There are only a handful of firms that have been through numerous tech cycles and still focus on early stage venture.

I think there is more collaboration today. This is true in many areas of business and the economy, as modern technology has made it much easier to share and work together, but I also think the Greater Boston tech community has made some important steps forward in particular around working together. Programs such as MassChallenge, Techstars, and others have done a good job in helping to pull us all together to help promote entrepreneurship.

KC: How has venture capital changed or evolved over the years, as well?

MF: In addition to the shifts in the funding landscape I mentioned earlier, I have also seen entrepreneurship globalize in a very meaningful way over the last decade. We see a far greater number of promising companies emerging internationally today. Some venture firms have added partners and offices around the world to try and capitalize on this. While these entrepreneurs may not have the local culture that allows them to recover from failure, they have at least the same level of drive and passion as U.S. entrepreneurs, if not more.

KC: Do you have any interesting / fun stories to share from your time as an investor?

MF: Many. I could probably write a book. The first two that come to mind are:

• During a meeting with a new prospective company, the Executive Chairman (who said he was “just there to listen”) would not let the CEO leave to go to the bathroom before the pitch was over. Wow…
• During the eleventh hour of an acquisition of one of our portfolio companies, the acquiring company had a bad quarter and backed away from the deal, making up nonsensical excuses. Within a couple days, a founder, board member, and the portfolio company CEO connected with the CEO of another public company that had shown interest. We were able to get the same deal done with that company about six weeks later. Now that is rare.

KC: You have a very impressive track record with several investments leading to an exit. Can you highlight some of them?

MF: I have had the good fortune to work with a number of great management teams and fellow board members. It’s probably unfair to pick some versus others. I’ll just say they were all challenging and rewarding in their own ways (kind of sounds like I am talking about my kids).

For better or worse, we do get quite emotionally involved and share in the stresses and successes of the companies we work with.  

KC: What companies are currently in your portfolio?

MF: Our portfolio includes companies such as CloudLock, Invaluable, RapidMiner, StartApp, V.i.Labs and TimeTrade. The newest investments are Pwnie Express, SideCar and Vee24. 

KC: What stage of investments do you primarily target?

MF: We exclusively target early stage B2B technology investments. We define early stage as after seed, but before growth. This means some initial customer traction and validation, and revenues roughly in the $500K to $5M range.

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

MF: Strong and passionate team. Scalability. Compelling product and market fit. Attractive business model. 

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

MF: Within B2B tech, we focus on SaaS Software, Data Analytics, Cloud Business Services, Mobility and Communications, and Security and Compliance. Some of the themes we are actively investigating currently include the convergence of Cloud and Mobile, as well as Machine Learning. 

KC: What is the current fund that you are investing from?

MF: We are investing out of our sixth Ascent fund.

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

MF: It’s hard to provide a short answer to that question. The Greater Boston area has had a sustainable innovation and startup ecosystem for decades, going back to the advent of the first computer. For what we do at Ascent, I don’t think there is a better place on the planet. We put together this infographic blog about a year ago to share some of the reasons why we feel the Northeast is the ideal place for early stage B2B. Boston is really the heart of the region on that front. A number of the companies we have backed in recent years have been started elsewhere and moved to Boston for the reasons outlined in the graphic.

KC: Looking back at your prior exits as an investor, are there any common traits about these companies that led them to a successful acquisition?

MF: Strong and passionate team. Scalability. Compelling product and market fit. Attractive business model.

The cut and paste is intentional. We seek out opportunities that share traits with what has worked before, trying to also be cognizant that the tech world is constantly changing.

KC: What companies in Boston, outside of your portfolio, do you find interesting?

MF: LogMeIn, Demandware, Rapid 7, and Wayfair are all recent local success stories that I really admire.

KC: Greatest misses. What company(ies) have you passed on that you wish you hadn’t?

MF: I’ve been doing this for 18 years… that list would be very long!

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

I have a lot of respect for Paul Ferri, founder of Matrix Partners. He has done this job as well as anyone. My first “boss” in VC was Ernie Parizeau at Norwest Venture Partners. He was a terrific mentor that was able to stay focused on what was most important and have some fun along the way. He was also a very good investor.

I also have a lot of respect and admiration for my partners at Ascent. We are very lucky to have such a talented and cohesive group - a true team. We have been through some market highs and lows together and remained stable and committed throughout. This can be a fickle business and not many venture partnerships have the tenure together that we do.

KC: Outside of being a VC, what are your personal interests or activities?

I have a wonderful wife and four kids (13, 11, 9, and 6 years old), so they are the focus of most of my free time.

Our kids are all quite active, so we spend a lot of time outdoors at their sporting events, at the beach or a ski hill, or in the backyard. I help coach lacrosse, field hockey and volunteer at ski races. I love sports myself and still play lacrosse, soccer, ski and rock climb when I can.

To stay in shape, I train for and race triathlons and other endurance events in the summer months. This year I am doing the Best Buddies Ride, which is not a race, but is for a great cause that is close to my heart. I also enjoy photography, reading, and cooking.

A Fates family photo from 2015

Fates' oldest son rock climbing

KC: What type of music do you like? What was the last concert that you went to?  

MF: I like all kinds of music from classical, to rock, to country, to blues. I am headed to see The Dave Matthews Band in June with one of my kids and some friends. The last one was Beethoven and Mahler and at the BSO as a guest of some close friends.

KC: What was the last book that you read?

MF: The last book I read is called Second Suns. I highly recommend it. Incredible story of how two doctors are having a massive impact on thousands of underserved patients.

KC: Are you involved in any charitable organizations?

MF: I feel giving back is an obligation that should be taken very seriously. I am a very fortunate person and I do my best to try to help others. For me, the most important area is education. I feel strongly that it is the best way to solve so many of our world’s issues. 

I have been involved in a number of roles at the Boston Museum of Science for over 10 years, currently serving on the Board of Overseers. The museum is a national advocate for STEM education and inspires many young people to think about science, technology and engineering as career options. Amongst other things, over the years, I climbed a lot of mountains – literally – to raise capital for the museum, though I am taking a break this year.  

Fates on top of Mt. Washington with the “Saco Men”

I am also involved with KIPP MA (Knowledge is Power Program) Charter Schools, serving on various committees. KIPP has proven that great public education can scale, and produces amazing results for students in the toughest neighborhoods, on par with the most affluent towns in the state. This is a truly amazing charter school network.

On a more informal level, I am part of a small group that works with and helps advise the Sarah Greenwood School, a K-8 public school in Dorchester.  

This year I am doing the Best Buddies ride to raise money for people with intellectual disabilities. I have joined some friends on the Silicon Valley Bank team, which has been a major supporter of Best Buddies for years. 

Keith Cline is the founder of VentureFizz. Follow him on Twitter: @kcline6.

Jamie Goldstein has almost 20 years of experience as a venture capitalist in Boston.

Until recently, his career as an investor had been at North Bridge Venture Partners where he led investments at Actifio, Plexxi, Soundbite Communications, AppIQ, Cognio and others. Goldstein has launched a new fund focused on Boston companies called Pillar, which is taking a creative approach to investment.

A key objective of the firm is to align the goals between investors and entrepreneurs, so everyone is incentivized the same. Many VC investments include preferred terms that are all focused on downside protection versus upside enhancement. Plus, he has a team of 16 very successful entrepreneurs and founders in Boston, who are investors in Pillar's fund and are accessible to their portfolio companies for mentorship or any other requests for help.  

Learn more in my Q&A with Goldstein below.

Keith Cline: Tell us about your background?

Jamie Goldstein: I grew up in Weston and went to the public schools. We were a family of engineers. My dad worked his entire career at a water purification company in Watertown called Ionics. My brother was a biologist and chemical engineer and my sister was a mechanical engineer.  I was electrical engineering and computer science.  It was a household where we never hired anybody to do or fix anything.  We did it ourselves.  Truth is, my mom is the brains of the bunch.

Our family discussions at the dinner table would revolve around either sports or inventing stuff. As a child, I remember my dad, who was the CEO of a public company at the time, asking me for my legos. He had an idea and used the Legos to build the prototype of a reconfigurable water pump.  Ionics ended up getting a patent and it led to millions of dollars of sales.  There was no commission to me for the use of my Legos.  I remain bitter to this day.

I was fortunate to get into MIT and was very involved in my fraternity and played varsity soccer. MIT is a surprisingly social place if you find the right group of friends.  Many of my best friends are fraternity brothers from MIT.

KC: What was your first role out of college and what led you to attend B-school at HBS?

JG: Upon graduation, I wasn’t sure what I wanted to do. I received job offers from Intel and Goldman Sachs. A friend of mine, Tim Collins, received a job offer at a startup company in Burlington called Symmetrix and referred me in. It was 1989 and the U.S. was getting its ass kicked in manufacturing by other countries, mostly Japan. They suggested I read a book called The Goal which had a bit of a cult following in the nerdy operations research world.  I couldn’t put the book down and leaped at the chance to work at Symmetrix for George Bennett. George was one of the founders of Bain Consulting and also Braxton.  He was an amazing leader and salesman and a great mentor.  We sold software to large manufacturing companies to help them become better operators.

Malden Mills was one of our early customers and I was assigned to work with them in Lawrence, MA run by a character named Aaron Feuerstein.  I remember the first time I met him I had to present some of our early findings.  “How old are you kid?” he asked me.  “22, I replied”  “I have corns that are older than you.”  He was funny and smart with a very good soul.  When others were moving overseas, Aaron was doubling down in Lawence.

Malden Mills was an interesting time.  In the mid 90s, they discovered polar fleece (somewhat by accident) and the world was crazy for fleece. Now a company that had recently emerged from bankruptcy couldn’t keep up with the demand for fleece.  We helped them streamline their order delivery.

Symmetrix grew from 18 employees to 200 people but over time it ended up being more of a consulting company and not a software company. The founders of the company paid for me to go to Harvard Business School, which led me to end up meeting my future co-founders of PureSpeech.

KC: Tell me some of the details about your startup, PureSpeech.

JG: I first met Ben Chigier, who was a speech scientist from NYNEX and Carnegie Mellon in 1993. He was a brilliant guy and had left his job to start a speech recognition company based on his research.  I visited his apartment in Brookline and he asked me to test out his technology.  He asked me to speak an order, as if I was going through a drive-thru restaurant. I said, “I’ll take a big mac, fries and a coke and I’d like an apple pie too.”  Boom!  The recognizer nailed it with perfection. It was absolutely amazing.  Remember, this was 1994, 22 years ago.  We went on to raise $5M from Highland Capital, Compaq, and seed investors.

At the time, we were competing against Speechworks and Nuance. Those two companies went on to become large, publicly traded companies, whereas our company ended up getting acquired for $20M. Our competitors built more experienced teams and more of a focus around their strategy.  It was a very important lesson that I carry with me to this day.  

Ben went on to start another very successful company called eScription which was sold to Nuance and I went into venture capital.

KC: How you did you get into venture capital in 1998 at North Bridge Venture Partners?

JG: After things wrapped up at PureSpeech, I had to think about what I wanted to do next. My brother, Jono, was working at TA Associates and I used to poke fun at him, since he wasn’t actually building anything. He was just pushing paper, making investments, whereas I was building a product and company.  But based on my PureSpeech experience, it wasn’t clear whether I was built to work in one company day in and day out.  I liked variety.  I liked the creativity of the beginning stages.  But getting a job in venture is always hard, so I interviewed with startups as well.

I was interviewing for a business development role at eRoom with Jeffery Beir. As part of the process, he asked me to meet with his board members and ended up connecting me with Rich D’Amore from North Bridge Venture Partners. Rich asked what I really wanted to do with my life and I told him I wanted to be a VC.  After literally 13 rounds of interviews, I ended up being the first hire at North Bridge, working for Ed Anderson, Rich D’Amore and Bill Geary.

I started on January 5, 1998, which was phenomenal timing as the internet bubble was blossoming and everything you invested in turned to gold. At first, I worked closely with Rich, helping him evaluate his deal flow and doing diligence.  I had lunch at the corner of his desk everyday and we just worked his pipeline, which was vast. He remains a great mentor to this day.  I then spent a year doing the same type of work with Ed Anderson, the managing partner at North Bridge. I learned a ton from both of them. They had different styles, but they were both phenomenal and highly effective investors.

KC: You have been an investor in the Boston tech scene for several years. How has the ecosystem evolved since then?

JG: Back in the dotcom bubble days, the whole thing was insane and crazy. Companies with no revenue would go public and you would see some companies’ stock climb 150 percent one day and then another 150 percent the next day. People with a history in the tech industry knew that it wouldn’t last. But the people who were new to the industry thought this was the new normal. The internet changes everything.  The truth is, while many of those companies failed -- it wasn’t that they were flawed ideas, it was that people burned through their cash too quickly.  

Today entrepreneurs know so much more about the whole process and doing a startup is far more accessible.  Campus programs like the Harvard iLab, Rock Center Accelerator, MIT Sandbox and Sloan GFSA all help students pursue their dreams.  I wished this existed back when we were getting started.

KC: You have a very impressive track record, with several investments leading to an exit including AppIQ (acquired by HP), Cognio (acq Cisco), & SoundBite Communications (IPO then acquired by Genesys). Can you highlight one of them as an example?

JG: Even though it wasn’t a massive exit, my investment at Cognio may be the most gratifying. Cognio had a great group of people who worked hard. If you combine that with a little luck, they were able to defy the odds. The company was building a semiconductor chip for indoor wireless for six different competing standards before Wi-Fi became the obvious choice. The market crashed and we had one of our co-investors back out of the next round of funding. I had to ask the CEO to leave and stepped in as their interim CEO. We got very lucky and sold some patents to InterDigital Communications. This gave us $9M in cash and helped us pivot the company toward a different, less capital intensive business.  We hired a new CEO and I got to go back to my day job.  We ended up building a spectrum visibility and management system for enterprises. Cisco acquired the company for $75M.  

KC: Can you share a current portfolio company from North Bridge?

JG: I was the first investor at a company called AppIQ along with David Skok from Matrix, which was founded by Ash Ashutosh. The company was acquired by HP and Ash became the CTO of their storage group and then he joined Greylock for about a year as a partner.

Ash is a brilliant entrepreneur. He noticed how enterprise storage budgets were growing at a massive rate and there was an issue around them having too many copies of the same stuff, which led to him starting Actifio. We invested in the company’s A round and a few months later, Greylock joined the syndicate.

Copy data was a new concept that was hard to explain at first. Even a lot of VCs couldn’t get their head around it but our long history with Ash gave us faith that he would get the market right and build a big company.

I connected Ash with Mike Troiano, who was at Holland-Mark at the time to help with their messaging, marketing, and branding. Ash was very impressed with Mike’s work, which ultimately led him to bringing him on full-time as the company’s CMO.

Its not often a company creates an entirely new category but Actifio has done that with Copy Data Management.  Analysts like Gartner and IDC now write reports about Copy Data and CIOs now see line items on budgets for copy data.  That’s an amazing accomplishment.

KC: What prompted you to start Pillar?

JG: My responsibilities with North Bridge Venture Capital came to an end last fall. Investing and working with entrepreneurs is what I love to do. There was a lot of discussion from the LP community that Boston is dead. You can’t make money there anymore. Everything has shifted to other markets. Being a local investor, I didn’t feel like that actually was happening and I didn’t like hearing this misconception.

To me it felt like we were in a new era for Boston. The rear view mirror view of the last 10 years was not consistent with what was happening on the ground right now.  I met with 30 of Boston’s most successful entrepreneurs and got feedback from them. I asked them about their experience with investors: what help did you get? What would you have wanted? What do you think of our VC community?

The result of this effort became Pillar. Sixteen of these unbelievably talented CEOs and founders are now part of the Pillar team as co-owners and investors.

KC: How does Pillar differentiate itself from other VC firms?

JG: Based on the 16 CEOs and founders who are part of Pillar, it is very clear that giving our portfolio company founders access to these people will make them better entrepreneurs. They will benefit by learning from their mistakes and having access to their connections.

It was also important to all of us that there is proper alignment between the investors and entrepreneurs. The goal is to make sure we have a common goal of a successful company. Everyone says they want to be founder friendly, we wanted to prove it by getting rid of the usual preferred stock terms.

Our conclusions was that these protections don’t really matter in the big picture.  They might help spare a few extra dollars on a poor outcome, but if you are going to build a world class VC fund, the only thing that matters is being in the right projects and helping them achieve their potential.

So at Pillar our approach is buy common stock in these companies -- the same thing the founders own.  We want to align our terms with what’s best for everyone involved, so that we are all focused on upside enhancement, not downside protection.

KC: You are raising a $100M fund. Where do things stand with the raising of the fund and are you already making investments?

JG: We raised a large chunk of the fund very quickly from individual investors including the 16 CEOs.  We have started making investments and will continue fundraising through the summer.

KC: What stage of investments do you primarily target?

JG: As a rule of thumb, we like to be the first capital into a company, whether it is a seed or a Series A round of funding. This doesn’t mean that we won’t do a deal outside of this strike-zone.

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

JG:  We are open, but here’s a general idea of what we’re currently focused on:

1. The world is addicted to data and it is everywhere. So, technology that is somehow connected to the data ecosystem (moving, storing, sharing, securing)

2. The analysis of all this data that is being created with machine learning and artificial intelligence

3. The mobilization of that information with mobile first applications, and

4. Extending its reach through IoT (Internet of Things), robots and sensors

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

JG: Boston is bubbling with innovation and i don’t think there’s ever been a better time to be an entrepreneur or an investor here.  Our local universities, our long history of building companies - there’s a breadth and depth here this is substantial.  Massachusetts produces more Science, Engineering and Health PhDs per 100,000 anywhere in the country -- by far.  There’s intellectual horsepower here and a curiosity to solve the world’s problems.  

KC: What companies in Boston, outside of your prior investments, do you find interesting?

JG: There are many companies represented in our founding Pillar group that I wished we had backed -- TripAdvisor, Wayfair, DraftKings and Rapid7 to name a few.  If you are looking for younger companies, Drift and PillPack.

KC: Greatest misses? What companies have you passed on that you wish you hadn’t?

JG:  The one that pains me the most is Waze. I was doing some investing in Israel with a company called Fring. They were the first company trying to do Skype internet calls from your mobile phone back in 2008. We take this technology for granted now, but back then it was really hard on an old Symbian or Windows phone. Then the iPhone changed everything. It was no longer a tech game, it was all about building the best user experience for consumers. I made a mistake and passed on Waze because I didn’t think they would get the consumer experience right. I sure was wrong on that one. And I am reminded when I use it now, every day.

KC: Outside of being a VC, what are you personal interests or activities?

JG: My wife, Jodi, and I have three boys ages 17, 15, and 11, plus a yellow lab name Sadie. We’re a very active family. We spend a lot of time in Stowe, Vermont and do anything involving a mountain like skiing, snowboarding, hiking, and mountain biking.

Fat biking in Stowe, VT

While nowadays we do hire plumbers and HVAC people to fix our house, I have tried to give my kids the same love of making things.  I have a woodworking shop in the basement and a 3D printer from a local company called MarkForged.  It's amazing what you can do now -- find a product on GradCAD, modify it using Onshape (CAD in the cloud) and print it in 3D immediately.  

KC: What TV shows do you watch and what type of music do you like?

JG: For TV, I’m addicted to Game of Thrones.

I like all sorts of music.  Jodi is a metal head so we go to old school concerts like Journey and Styx when they roll through town.  Personally I like rap and have been listening to since high school.  In college everyone thought I was a freak -- listening to Run DMC, Kool Moe Dee, Boogie Down Productions and Public Enemy.  My friends thought rap was a fad and was going the way of disco - but I bet them that rap would still be going strong 10 years after graduation.  I cleaned up.  I learn about music now through my kids.  Latest favorite is Lil Dicky, a jewish rapper from Philly.

KC: Are you involved in any charitable organizations?

JG: I’ve been very involved in a charter school called Match Education for a decade and have been their Chairman and Executive Chairman for the past five years. Match is inspiring -- an organization of devoted people doing phenomenal work in education reform. They run schools grades K - 12, they run a graduate school of education to train new teachers and they run a program to help students get a college degree.  The organization’s was started by Mike Goldstein (no relation) and is now run by CEO is Stig Leschly.  Stig sold a company to Amazon back in the dotcom era and could now do anything in life -- be a professor, a lawyer, a CEO, a politician -- but he chooses to run Match.  We are lucky to have someone with his talents.

RM: I grew up north of Philadelphia in Bucks County. I went to public school and was the youngest of three. We were raised by a single parent, my father. I was an athlete in high school and wanted to continue to play college football, and despite its proximity, Princeton was the right fit for me both academically and athletically. I wanted to study business, and given that Princeton was a liberal arts school, I chose economics because it was the closest proxy to a business curriculum.

Why did I want to go into business? I’ve always had a love and knack for numbers and math. Therefore, I actually thought finance and accounting was interesting.

Ryan and his wife on the sidelines at Princeton last fall, as his 1995 Ivy Championship team was honored during a game.

KC: What did you do for work right out of college?

RM: I moved to San Francisco and joined an investment bank named Robertson Stephens, one of the original emerging growth investment banking boutiques. After 22 years on the East Coast, I wanted something different. I wanted to have an adventure and felt San Francisco was for me.

KC: How did you get into venture capital and join SOFTBANK Capital Partners?

RM: Three years into investment banking, I realized I didn’t like it. I was out there in what would come to be called the first internet bubble, and I was a big believer in learning by doing. I felt like venture is a skill that’s learned by applying. Softbank was one of the more prolific and active VC firms in late '90s. They had an opportunity to join as an associate, so I seized it.

KC: What prompted you to move on and become a Co-Founder and General Partner at GrandBanks Capital?

RM: When I was at Softbank, they had a smaller office here in Boston. I moved here in 1999 to work in that smaller office so I could get more exposure. About a year or a year and a half into it, the partner I was working really closely with, Charlie Lax, decided he wanted to go raise his own fund. I felt that I could either go to business school or learn by investing. Charlie offered me a partnership spot in the new fund. I was 27. Time to take risks, I thought. So I went over to join him, and that fund became GrandBanks Capital.

KC: You were at GrandBanks Capital for over eleven years.  Can you talk about your investment and exits while you were there like Enpocket, WHERE, Vela Systems, and Nexage?

RM: Early on as a young partner, my thesis was pretty simple: invest in people 10 times smarter than myself. Fortunately, I found a few of them. The first was Mike Baker, the CEO and co-founder of Enpocket, which Mike drove and ultimately sold to Nokia. Through GrandBanks, I met Alan Phillips, who founded WHERE. Alan and I recruited Walt Doyle back to Boston from Mapquest, and Walt drove the growth of WHERE, which ultimately was acquired by Paypal.

KC: Do you have any interesting or fun stories to share from the web 1.0 bubble years?

RM: Unique would be the way I describe it. The role the IPO market played in financing in web infrastructure buildout was incredible.

KC: Why did you decide to leave GrandBanks and join the team at Atlas, now Accomplice?

RM: In the Spring of 2011, after WHERE was acquired by PayPal, I started thinking about joining a larger platform. I had known Jeff Fagnan since our SoftBank days of the '90s and kind of grown up with him in the industry and had a great deal of trust in him. Plus, I was motivated by the challenge of rebuilding of a franchise. Jeff and Fred Destin at the time had created a fair bit of momentum with what was a differentiated approach to venture. I loved the idea of challenging the status quo and felt Boston was ripe for some innovation in venture.

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

RM: I have to love the market they’re operating in. I have to believe that they’ll be successful, whether they’re capitalized or not. I don’t care about pedigree. I care about tenacity and character. If I’m sitting across from someone, I’ll get into their background a little bit to find something that galvanizes them to me as a person. They have to have some story of adversity, because they’re in for it. Their ability to cope defines their success as an entrepreneur, because they’re always starting out as the underdog. I love the underdog.

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

RM: I think entrepreneurs, the good ones, are like water: they find a way through in an interesting market. This is a cliche answer, but we’re at the stage of investing where we’re all about the people.

KC: What is the current fund that you are investing from?

RM: Accomplice I. $212M. Tech only.

KC: Which investments are you involved in at Accomplice?

RM: DraftKings, clypd, Blispay, OwnerIQ, Plastiq, Crew, Joist, LovePop, MOO, and Globoforce.

KC: You have been a very active investor in the Boston tech community since 1999. What excites you about the Boston market and how has it evolved since you’ve been in the venture capital industry?

KC: Which companies outside of your portfolio in the Boston area do you find interesting?

KC: Greatest misses. What companies have you passed on that you wish you hadn’t?

RM: Too many to even list.

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

RM: I admire any founder. I don’t think the average person appreciates the courage it takes to found a company and to put it all on the line. I’d also be remiss if I didn’t mention Charlie Lax. He was an important mentor for me in my career. And of course, my father. He raised three kids all by himself. I miss him every day.

KC: Outside of being a VC, what are your personal interests or activities?

RM: I love being a father and husband, even more than I thought I would. I try to work hard and love spending time with my very understanding wife and my young daughters. For fun or exercise, I like to play basketball, head to InnerCity Weightlifting, or go running on the esplanade. Boston is beautiful. You don’t realize how much until you run it.

Ryan with his two daughters.

KC: What was the last concert that you went to? 

RM: I have two daughters under 30 months old, so you’re catching me at a very lame moment in my life. The last concert I went to was Sesame Street Live. No joke.

KC: Are you involved in any charitable organizations?

RM: Given that I’m a founder of Accomplice, I’m involved with TUGG. My favorite TUGG nonprofit is Innercity Weightlifting. Shoutout to my trainer Eric Flores Powell.

Ryan with his wife at Super Bowl 50 attending the NFL Honors event.

Keith Cline is the founder of VentureFizz. Follow him on Twitter: @kcline6.

TJ Mahony is an accomplished entrepreneur and an active angel investor in Boston. Last June, he took on a role as Managing Director of BOSS Syndicates, which is an AngelList syndicate started by Accomplice to amplify early stage investing in Boston startups. The syndicate includes a network of 50 pre-approved leads (either successful founders or executives) who are scouting out companies and ultimately create a community approach to investing. Since its launch, BOSS Syndicates has created Boston's largest and most active seed fund, investing in over 40 companies.

1.  Tell us about your background. Where did you grow up? What prompted you to attend Macalester College and study economics and history?

I’m from Boulder, Colorado. I have two large families that, when combined, look like the United Nations. I grew up playing every sport that was offered, but always favored basketball. I made the All State team and for a brief moment I thought I could get an athletic scholarship - but I didn’t because, frankly, I wasn’t good enough. Macalester, a non-scholarship school, offered to push me through admissions, so off to the northern tundra of the Twin Cities I went. Interesting note: many consider Harvard the Macalester of the East coast.  

The high school years, including TJ's 1980 Pontiac 6000 LE nicknamed "The Yak"

I loved Mac. I played ball for four years, DJed at the college radio station (@DJTJ), TA’ed intro econ classes, chaired a student board, interned, drank, and pretty much crushed the college experience.

2.  What did you do for work right out of college?

I joined Accenture, which was called Andersen Consulting back then. I had a feeling the internet was going to be a big deal and forced my way into their first “e-now” training. I learned HTML, Javascript, and even a little Perl script. My first project was in Dallas, Texas. I worked in Dallas Monday through Friday and then flew back to Minneapolis. It sucked. I was a terrible coder, Dallas is the worst, and never being home was soul draining. After a year, I pulled the plug and moved to Boston to join ZEFER.

3.  After spending a few years in the consulting industry, you ended up joining Compete in the early days. How did you get connected with the team there?

ZEFER was an amazing experience but it was dying. All project work turned into "pitch work". We had a huge proposal into the city of Boston. We had a team of 10-plus people working on it, but morale was low. Each meeting fewer and fewer people showed up. But I kept at it. The deal’s lead was Stephen DiMarco. Stephen later became CMO of Compete (he’s now President) and offered me a 90-day contract. He explained, “There were other people I could have hired, but I remember you kept showing up at ZEFER.”

Lesson:  80 percent of success is showing up.

4.  Can you share some of the details around your contributions at Compete in terms of helping them scale and grow?

I helped build out our client services team with Stephen, then founded a wireless vertical practice with Ryan Burke (at InVision) and then created Compete.com with David Cancel (at Drift). That was our big direct-to-consumer play, which proved to be a major catalyst and gave me the confidence to strike out on my own.  

5.  What led you to move on and start FlipKey?  

I was traveling quite a bit promoting Compete.com. I just bought my first place in the North End and received my first mortgage bill. I did the math: mortgage bill / nights slept in my own bed = $300/night. Damn! I should just live in a hotel…. or turn my place into a hotel. We were one and a half years ahead of Airbnb but couldn’t get the primary home rental concept funded, so we pivoted the platform to the existing marketplace of second homes, AKA vacation rentals.

6.  How did you raise seed money from TripAdvisor?  What was the thought process of raising money from a strategic investor versus angel investors or a VC firm?

HomeAway raises $500M. Then Airbnb shows up. Then the founder of AvantGo launches a similar play (PickPackGo) with a few million in funding. TripAdvisor calls and says, “We noticed your tagline is ‘TripAdvisor of vacation rentals.’ What happens to that when we enter the market and we are, naturally, the TripAdvisor of vacation rentals?”

TripAdvisor proved to be a wonderful partner and we collaboratively made a significant impact on the industry, literally inventing the standard for vacation rental reviews and establishing our network as one of the big three (HomeAway, ABNB, FlipKey/Trip).

7.  Since moving on from FlipKey, you have been a very active angel investor. Can you talk about some of the angel investments that you have made?

I’ve made over 20 personal angel investments. You can see my action here:  https://angel.co/tjmahony

8.  Last year, you joined Accomplice to be the Managing Director of their BOSS Syndicate. Can you share more about BOSS and what prompted you to make the decision to lead this syndicate?

I joined Accomplice to lead BOSS because I felt it could fundamentally lift the tide of impact entrepreneurship in Boston.   

Let me expand. Per your last question, I’ve made 20-plus personal investments, the vast majority being HQed in Boston. Why?

1. I believe in the company and expect to make a return.

2. I believe I was gifted the superpower of luck, timing, and a pinch of smarts to actually build and sell a company. I’m bound by cosmic law to extend and empower worthy entrepreneurs at a similar shot.

BOSS amplifies this ethos across Boston in a manner no individual nor single venture firm could on their own.  

This is a solid Medium post that further explains and expands.

9.  What are the top traits you look for in terms of investing in a company and/or founder?

Company: I tend to like interesting ideas in boring markets (air filters, greeting cards, muni bonds, window replacements, etc)

Great founders: There is an authenticity to their mission and commitment to succeed. It’s tough to define, but you know it when you see it.

10.  Are there specific areas of technology, industries, or trends which are a focus for BOSS?

BOSS focuses on amazing people - not specific verticals or categories. This federated approach produces a spectrum of coverage:  IoT, mircroservices, paper, beacons, marketing automation, QSRs, wearables, consumer health, influencer marketing, bicycles, fintech, art… you get the point.

11.  How many companies has BOSS invested in since last June?  

In total, we have backed 40 companies since January 2014. Since June, we’ve backed 16. Easiest way to keep up with us is to follow us on AngelList. You can also find additional info at bossbacked.com.

12.  What are some of the companies that our readers might recognize?

You can check out the portfolio here:  BOSS Portfolio

13.  Which companies outside of the BOSS portfolio in the Boston area do you find interesting?

I really like the guys at HourlyNerd and Placester. I also wish I got into Sweetgreens, despite never having eaten there. The lines are always too long.

14.  Who do you admire or who has been the greatest mentor for you?

Ferris Bueller. That guy was a force of nature.

15.  Outside of being an investor, what are your personal interests or activities?

I used to be an interesting guy, but then I had kids.

TJ with his children

16.  What type of music do you like?  

90’s hiphop is where I flourish. If there was a national Jeopardy competition on Rap Music in the 90’s, I’d give myself 3:1 odds of winning.

17.  Are you involved in any charitable organizations?  

I am… I wish I was more involved.  

Currently: ICW (Inner City Weightlifting), BUILD, TUGG, and I’m very involved in initiatives at Macalester.

TJ and his wife, Jess, rafting in Colorado

Keith Cline is the founder of VentureFizz. Follow him on Twitter: @kcline6.

As a founder and an investor, Bob Davis has been there from the beginning of the internet. He was the Founder and CEO of Lycos, which at one point was the most visited website on the planet. He took Lycos public in record time and built a dominant company back in the web 1.0 era. For the past 15 years, he has been a VC at Highland Capital Partners. His track record as a Venture Capitalist speaks for itself, having led investments at several successful companies that resulted in exits like Bullhorn, Quattro, Turbine, and several others. 

Tell me about your background.  

I grew up in Dorchester. I was orphaned at a young age. One of my parents passed away when I was 13, the other when I was 20. I attended Northeastern because of its co-op program. In 1979, school loans and financial aid programs were very limited and with the co-op program, I was able to work two full-time jobs to get me through school. I ended up graduating sixth in my class of 900.  

One of my school jobs was at IBM, where I worked in a sales office for six months as an intern. It was a unique opportunity, as it gave me a first-look experience in the tech industry, which just coming on the scene at that point in time. After college, IBM told me I had too much a “babyface” to work in sales and wanted me to become a systems engineer. I dug out the help wanted section in The Boston Globe and found a position as a salesman in the data communications division at GE selling printing and communications equipment to computer manufacturers.

Wang Laboratories recruited me in 1982, where I held a variety of sales and marketing management roles before landing at a small public company called Cambex in the storage sector.

Tell me the story behind Lycos.

Dan Nova, (my partner at Highland now and a 30-year friend) who was at CMGi as a general partner, and I would speak often to catch up on work and life. He shared the details of a new type of technology that was being developed at Carnegie Mellon named Lycos. A researcher had figured out a way to index the web. The researcher wasn’t interested in building a company, but he was interested in selling his software. So CMGi bought an exclusive license for the technology for $2M and 80 percent of the company, with Carnegie Mellon and the researcher owning the other 20 percent.

I wasn’t happy at Cambex, so when Dan mentioned the Lycos story of a potential company with no business model or employees but a big opportunity for someone who wanted to start a company, I quickly fell in love with the idea and joined as CEO. This was back in 1995, where the only way to access the internet was mostly through online service accounts such as AOL or Prodigy. I was the only employee in the company sitting in a cubicle at CMGi trying to figure out how to build a business. We explored different business models - such as licensing it out to large corporations - but we decided the business model would be best to focus on the consumer market and build out our own web destination or portal.

At that point in time, no one had internet experience, so I had to build the initial team with people from a variety of companies such as Walt Disney, NBC, AT&T, etc.

Ironically, even in 1995, we were a little late to the game. There were already four to five different search engines out there, including Yahoo, InfoSeek, and Architext/Excite. We had an off-site management team meeting one day and asked ourselves, “How do we win?” and we made the strategic decision to follow a media company model. We went all in with a traditional media approach and focused on building a family of brands under the Lycos umbrella to attract a wide variety of consumers to our site and content. By 1999, we were the most visited internet destination in the world.

Bob getting honored with the key to the city of Miami in 1999 with the Lycos mascot dog.

As Lycos was building out a media network, what were some of the companies that you acquired?

We went on to build a network effect by acquiring or investing in 25 to 30 companies over the span of the company, which included many different properties. Some of the brands included:

• Tripod - a property where you could build your own website

• MatchMaker - an online dating site, which today is a multi-billion dollar industry with match.com, OkCupid, and lots of others

• Gamesville - an online gaming site and a pre-cursor to companies such as Zynga

• Raging Bull/Quote.com - two different financial media businesses

• Wired.com - the news property

• HotBot - another search engine

Tell me about Lycos’ IPO and acquisition.

We became the most visited website in the world and the fastest company to ever go public on the NASDAQ, just nine months after we incorporated. When I left the company just after our sale, we had nearly $1B in revenue with over 4K employees.

Based on our growth, we had interest from potential acquirers. One of which was Barry Diller’s USA Networks. We announced a deal to merge the companies such that we would become USA Lycos and own businesses such as The Home Shopping Network and TicketMaster (where I later served on the board). But at that time the internet had a magic shimmer and the concept of combining online and offline assets was frightening to many. We were unable to get shareholder support for the deal and ultimately had to back out.

One year later, Terra Networks (owned by Telefonica SA, the largest telco company in Spain) was interested in building a footprint in the U.S. We ended up getting acquired for $5.5B in 2000. I became CEO of Terra Lycos, the combined entity. Four to five months into the merger, internet valuations came crashing down. We still had $3B in cash on our books and my plan was to acquire companies aggressively that were selling at a major discount and grow the business. Unfortunately, Telefonica disagreed with my strategy and decided to take a conservative approach to the business and ride out the dot-com bust. I resigned from my role as CEO due to this difference in opinion around our business strategy, but I retained a role as their non-executive vice chairman. It is a shame what happened to the company and what it could have been.  

Do you have any interesting or fun stories to share from the web 1.0 bubble years?

I probably have many, but the one that comes to mind was during our IPO. We were scheduled to go public on April 1, 1996. We had incorporated in June 1995, so we were the fastest company to go public in the history of the NASDAQ. I made them delay the IPO by one day (April 2). I didn’t want to go out on April Fool’s Day and forever have that tag associated with our IPO and be the brunt of potential jokes.

How you did you get into venture capital?

As it became clear that I did not want to stay as CEO of Terra Lycos, it was Dan Nova who persuaded me to join Highland Capital Partners and start what is now a 15-year career in the venture capital industry.

How has venture capital changed or evolved over the years from your days raising capital to joining Highland to today?

There have been lots of changes.

The industry is a lot more mature. Back then, the larger funds were $100M to $150M. It was unheard of to have venture funds of $1B. The transactions used to be quiet and VCs were not public figures.

There wasn’t the same level of competition and the number of startups were far fewer, as it was uncommon for people to start companies back then. Now, startup founders are rock stars - which is a good thing.  

Technology and business will constantly evolve and innovate. But back then, the internet was so new.

You’ve been an investor in the Boston tech scene since 2001. How has the ecosystem evolved since then?

It has been a roller coaster of a ride and Boston is on a great comeback. For a while, Boston lost its edge where not only were people moving to the west coast, but they started moving to NYC.

Over the past three to four years, Boston has built a tremendous community of startups and we are starting to have anchor companies such as TripAdvisor, Wayfair, HubSpot, and others - which are all critical to the success of our ecosystem. It is important because when people see success or experience it firsthand, they are more willing to take a risk. It boosts overall confidence in the local market. The recent announcement of GE moving its headquarters to Boston was a massive win for the city.

I also credit Governor Baker and Mayor Walsh for understanding what it takes to fuel a startup culture. These guys really get it and are working hard to build an environment rich in innovation.

What stage of investments do you primarily target?

Typically, we like to be involved with a company at their A round of investment and participate in follow on rounds from there. Periodically, we will do a seed deal or a B as our point of entry but it is not as common.

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

A common mistake that most entrepreneurs make when they meet with me is that they are focused on discussing the product. Product is critical but it’s not the top consideration. For each investment, I look at three things in the following order:

1.  People - What is the team and what have they done? How have their careers progressed to the point where they are now uniquely qualified to build this business together today? Ultimately, world class founders build world class businesses.

2.  Market - I’m looking for entrepreneurs who are looking to build a business in a massive market. For example, a team that can acquire acquire a small share of a $100B market wins every time over a company that acquires a larger share of a smaller $100M market. Big and growing markets are exciting and create many companies of distinction.

3.  Product - What is the product and what is your go to market strategy? If I’m sold on the team and market, then how is your mouse trap better?

What sectors of technology, industries, or trends are interesting to you?

I spend my time on consumer and SaaS businesses.

What is the current fund that you’re investing from?

Highland Capital Partners 9, a $400M fund.

You’ve been a very active investor in Boston companies. One of your active investments is SessionM. What excites you about the current market in Boston?

I am a big believer in the Boston ecosystem and I’m very loyal to the area, not only because I grew up here, but as I mentioned before, Boston has a lot of momentum with great entrepreneurs and ideas.

A lot of your previous investments have been successful leading to an exit, like Bullhorn, Turbine, Quattro Wireless, and others. Looking back, are there any common traits about these companies that led them to a successful acquisition?

Most entrepreneurs I meet are very smart, but there is one common trait that I see in every successful entrepreneur: perseverance.

Will you run through walls to build your business? The life of entrepreneurs has lots of setbacks and disappointments. How does the entrepreneur overcome these challenges? It takes real fortitude to get a company off the ground. Most people don’t have it. At the end of the day, being an entrepreneur is tough stuff. You have to give up a lot from a personal level to watch your business grow. The first year can actually be the easy year. Years two and three are when the business is starting to grow and demands more and more of your time. It gets really hard to balance the demands of your business versus your personal life. You think about all the missed birthdays, baseball games, anniversaries, and more because the demands of the business have called.

Back in 2001, you published the book “Speed is Life”. Would this book be any different if you wrote it today?

Half of the book talked about stories that are now ancient history, while the other half of the book talked about business lessons which are transferrable no matter what the time-frame. The book was very important to me because the proceeds went to a non-profit that focused on searching for missing children. Early into the life of Lycos, we had adopted the National Center for Missing and Exploited Children as something we wanted to support with the belief that if we can find websites, let’s really make a difference by helping to find kids in trouble.

Outside of your portfolio, what companies in Boston do you find interesting?

I find lots of companies interesting, but the two that come to mind are DraftKings and M.Gemi.

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

I was lucky to have early mentors from my days as a co-op at IBM and another at GE. My mentor from my co-op ended up recruiting me to work at Wang. Today, my partners at Highland are my mentors.

Outside of being a VC, what are your personal interests or activities?

I spend most of my free time with my family. When I have a chance to sit down and read a book, I’ll usually pick something out about history or political intrigue. I’ve probably read every book by David McCullough and Vince Flynn.

I also like to be involved with charitable organizations. I’m chairman of the board at The Rivers School and I have been a strong supporter of Bridge Over Trouble Waters, an organization that fights youth homelessness.

Bob and his wife, Rita.

Keith Cline is the founder of VentureFizz. Follow him on Twitter: @kcline6.