Q&A with David Matthews
Investors seeking efficient plans in thawing startup climate
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Published: November 12, 2009
Q: Where is the early-stage investment world as we come out of this bad business cycle?
A: We’re definitely in the thaw. We deployed $1.5 million out of our fund in 2007. None in 2008 — not any. And then we put out $3 million so far this year. We’ve done that in the last three months. We’re seeing a better investing climate.
Q: When you’re seeking investment opportunities, what kind of companies are you looking for?
A: The theme would be capital efficient; things that don’t need $10 million or $100 million to get going and to get scaled. Things that could be very disruptive, that offer something 10 times better for 10 times less money. That’s the kind of the Holy Grail — things you see that can really disrupt the marketplace by providing more value at a lower price. That tends to be software services and technology-related.
Q: When you’re looking at these companies, is it all about the business plan, the concept, or the team?
A: Team, market, product; those three things. But the heaviest weight on team. Is this a management team that has a deep understanding of what they’re trying to do, a lot of experience, and is it a team we feel can execute on that business plan? Is it a product that’s disruptive in the marketplace? Is the market substantially sized — is it a billion-dollar market and growing that they’re selling into? Lastly, is it a do-able deal? If it’s a startup valued at a billion dollars, probably not a do-able deal.
Q: What about the local environment for your business?
A: I think
Oklahoma is proving to be a good environment. This was great wind in the sails having this
Forbes and
Kaufman Center recognition of "Best Place to Start a Business.” But it’s still very, very underserved in venture capital for aspiring entrepreneurs. It’s a climate where we need more folks like me up here.
Q: You wish you had more competition?
A: Yeah. Competition is healthy. We need more entrepreneurial success stories. We need to promote those loudly. That’s what made some of these other cities entrepreneurial havens. They had well-publicized success stories.
Silicon Valley clearly leads the way there. In our region,
Austin leads the way.
DON MECOY, BUSINESS WRITER
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