Seed Capital From Angel Investors: Geoff Ralston, Silicon Valley (Part 1)

By guest authors Irina Patterson and Candice Arnold

This is the twenty-second interview in our series on financing for entrepreneurs. I am talking to Geoff Ralston, a Silicon Valley angel investor and serial entrepreneur who started and ran a number of companies and held senior positions at Yahoo! after one of his companies, RocketMail, was acquired.

Irina: Hi, Geoff. Let’s start briefly with your background.

Geoff: I have a long history in technology in Silicon Valley. I have a degree in computer science from Dartmouth College. I came out to the West Coast to work at Hewlett-Packard back in the early ‘80s to work on operating system software originally for HP 2000 computers and eventually networking software on HP 9000 engineering computers.

I really gravitated toward computer communications from that time. I took a short break from my career at HP when I went back and got a master’s in computer science from Stanford and then continued delving into computer communications, looking at what was going on – actually up and down – in the telecom world, and working with things like ISDN [Integrated Services Digital Network].

I then spent five years in France with HP working on all sorts of communications services before getting my MBA from INSEAD in Fontainebleau, near Paris, in the early ‘90s and then moving back to the States.

I left HP to start an Internet company in 1994 because I was a believer back then that the connected world was the future. I eventually merged one of my startups, LookUP!, with another startup called Four11. We began a directory service and, eventually, a free Web-based e-mail provider called RocketMail.

In 1997, Four11 was purchased by Yahoo!, mostly for RocketMail, and RocketMail turned into Yahoo!Mail. I spent the next nine years of my career at Yahoo! in various roles, starting as the VP of engineering, eventually becoming the general manager of a division when we first created divisions at Yahoo!. I ran that division for almost five years, and then I was the chief product officer.

I left in 2006, did angel investing, for really the first time, for about eighteen months before taking another CEO job of one of my angel investments, Lala, a music company. We sold Lala to Apple in December 2009.

After staying with Apple for about six months, I left to go figure out what the next thing was going to be. Although I did a little bit of angel investing while I was at Apple, I have more free time now and fewer distractions.

Irina: Do you invest on your own, or are you connected to any particular group?

Geoff: I’m not connected formally to anybody, so in that sense, I do it on my own. Although I know some of the whole community, so often do it with other folks. I’ve invested in a number of the super angel funds around. I’m quite friendly with a number of the angels in the area.

My presence in the network is growing again. For a long time, I was a very strong presence. I co-invested with a lot of folks, and then I sort of shut it all down when I became CEO of Lala.

I believe it’s hard to do both – and then I slowly started picking up steam again. I try not to do it too quickly because it’s too much work.

Generally, angel seed rounds aren’t funded by one angel, so there’s always some kind of syndication that goes on. We all pay a lot of attention to who’s investing and why. We try to share due diligence and try to understand what one person sees or doesn’t see in a particular company.

Irina: Your geographic focus?

Geoff: Almost everything I invest in is in California, in fact, in Silicon Valley. I don’t even try to do anything different.

Irina: What’s your current source of deal flow?

Geoff: My network.

Irina: What is the best way to reach you?

Geoff: Probably the very best way to reach me is through somebody I know and respect. Certainly referrals; the most common way that I meet an entrepreneur is I get introduced to him or her.

Now there are a few other paths; for example, I’m pretty well connected to the Y Combinator people so I get a lot of deals through Y Combinator, especially recently. They have events where you can see all their companies and invest there if you like or you can actually get involved with the companies beforehand.

I’m a very product-focused person, so companies like to talk to me because I give them a lot of product feedback that they, I hope, tend to find useful.

This segment is part 1 in the series : Seed Capital From Angel Investors: Geoff Ralston, Silicon Valley
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