After Carbon Black went public, Mrs. T. and I had some discussions and made a decision. So, I’m excited to announce that our family will begin investing as angels and will donate all gains to charities.
Why do this? First, we want to back entrepreneurs. They’re Underdogs, and we want to be on their side.
This is personal for me. I was born an Underdog and have a low-income and immigrant background (more here). I am fortunate to have stumbled into the Innovation Economy. Giving back feels like the right thing to do.
Our friends, Andy and Amy Palmer, have led by example. They started investing after Vertica, where I was a founding investor, was sold for $375MM. They wanted to give back. “It’s not my money,” Andy had told me. That line has stuck with me ever since.
If the investments don’t make money, or if we lose money, we are prepared for that, given that returns for angels can be choppy. Our feeling is that we at least will have done our part to support entrepreneurs.
Second, generating capital for our charities is massively motivating. We love Nomi Network, for example, and their work battling sex trafficking.
And, last, we like finding reasons for the family to work together. All of us collaborate on making donations from our family-giving fund, and that has been fun. So, our children will be involved with sourcing and approving all investments. Many of them are adults now and are ready.
We are new to angel investing and will evolve our thinking over time. When we do, I will update this post.
Some entrepreneurs and angels have been kind enough to give advice. Thank you! Here is our current game plan:
- Geography: USA
- Security: Flexible. Either a note or equity is fine
- Stage and sector: Flexible, as long as you’re doing something innovative
- Board seats: None. I will be a passive investor. I won’t be joining any Boards and will not be investing significant time. After my family, Kepha is my #1 priority
- Total amount of capital: This will depend on Carbon Black’s future stock price. After seeing the founders seed and incubate the company themselves and make great progress, I co-led the first institutional round. Back then, it was called Bit9 (details here, prior post here). I eventually will get a GP distribution. In the meantime, we have capital on-hand and can start investing
- Setting terms: We won’t
- Follow-on rounds: Unlikely. The goal is to help as many entrepreneurs as possible
- Avoiding conflicts: There won’t be overlap with the Kepha funds. To make sure, Eric must OK every investment
- Signaling risk: There won’t be. Kepha will not co-invest in, or follow, any of the angel investments
- Best way to reach us: A warm intro via someone whom we already know and trust; ideally, that person can say with high conviction that they know and trust you
- Process: To keep friction low for both sides, here is an application. If we are taking the next step, you will hear from us within seven days. We regret that we cannot close the loop with everyone, as in-bound interest already is very high
So, we view this as an experiment and one worth doing. Capital can help people do great things, regardless of their background, race, gender identity, education or social standing.
It’s why I’ve always loved VC. It can have social impact and be a force for good. It can be enabling and help Underdogs win.