Investment Thesis: Alessandro Biral

Here’s my interview with Alessandro Biral from Dali Hook Ventures. They actually do seed or very early stage deals. Paul Dali, the Managing Partner of the firm, is the former CEO of Regis McKenna, Inc. I am working on a deal with Paul and Alessandro at the moment, and have good first hand experience of how they operate. I like them a lot.

SM: Please describe your background, to help entrepreneurs understand your point-of-view.
AB: I spent the past 7 years being involved in the media and technology sectors. I headed the Corporate Finance and Development activities of Fininvest, one of the largest media groups in the world, owned by Mr. Berlusconi, the former Prime Minister of Italy. I started its venture investments in Silicon Valley in 2001. I have now been at Dali Hook, doing early-stage venture for three years. Prior to that, I was at Morgan Stanley in London, working on large strategic transactions, such as cross-border M&A, restructurings, IPOs, I have an MBA in Finance from Wharton and an Engineering degree with a major in Technology.

SM: What stage are you looking to invest in over the next 6-12 months?
AB: Our core investment activity is in the first and second institutional round. We also like seed deals, where we know the space and/or the entrepreneur well.

SM: What segments?
AB: I am focusing on digital media related technologies, the consumer internet, internet services. As a firm, we also invest in enterprise software, mobility, security, networking and SaaS. [Note: Dali Hook just had a good exit with IBM acquiring Webify.]

SM: What market dynamics do you look for?
AB: We like fast-growing markets that can become quite large. This is the environment where a startup company would prosper. In my sector, I am interested in going after de-facto monopolies / standards, and see if the rules can be broken.

SM: What size of investment are you looking to make?
AB: It depends on the stage. At a seed level, it can be very small. In a first or second round, it could be up to $3MM. In any case, we are backed by some of the largest institutional investors in the US, so we have the resources to follow the company over time, investing in all the rounds through to exit.

SM: What kinds of deals are you interested in seeing?
AB: I am very excited about consumer-generated content. Traditional media companies look at us, people, as consumers of content, not as creators. They tend to discount consumer-generated entertainment, blogs as not the “quality content”. They think they know what consumer wants, they decide how and when to deliver it to them. But now technology is empowering the creative side of people across demographics and national boundaries. People can create their content, communicate with others and share it in a way that is easy, almost frictionless and that was never available before. Look at YouTube, for example. I think these changes can have a huge impact on the media, entertainment and advertising industries as we know them today. I want to finance and help entrepreneurs that are passionate enough to make these changes happen.

SM: Do you fund capital intensive deals?
AB: Capital intensive really depends on the industry / sector, and in general, venture capital needs to take a deep look at the particular situation of a company and competitive dynamics to determine what is appropriate. As a rule of thumb, in our sectors of focus, we would be cautious about deals that require more than $25-30MM to break-even.

SM: Do you fund built-to-flip deals? Hits businesses?
AB: We fund entrepreneurs that have passion and want to build a business that has the potential to become quite large. We are not good at evaluating companies that are built-to-flip or hits businesses.

SM: Describe your ideal entrepreneur.
SM: Passionate, hungry, with a burning desire to succeed that he cannot stand still. He has a lot at stake. He is a good leader, who is able to attract (and is not afraid of) top class people. He is crystal clear about the customer need he is addressing and never loses sight of it. Personally, I like young people a lot. I love their energy, their enthusiasm, they are not polluted by rules or certain ways to do things, they are free to innovate and change the world.

SM: Your syndicate preferences?
SM: We have worked with a number of firms. The idea is to have complementary skills and networks both in the US and outside the US to help the company succeed. We use this “shared” model internally too. Albeit one partner takes responsibility for the deal and the board seat, at least one other partner stays involved with the company and provides practical help to make sure we do everything we can as a firm to help the young company succeed.

SM: Markets are likely to crash, open up?
AB: It is difficult for us to comment publicly on that.

This segment is a part in the series : Investment Thesis