Seed Capital From Angel Investors: Saad Khan, Partner, CMEA Capital (Part 3)

By guest authors Irina Patterson and Candice Arnold

Saad: I spend a significant portion of my life meeting with entrepreneurs either one at a time or, in some cases, we’re out there a lot judging business plan competitions and meeting people at conferences and events. So, in some cases, we’re meeting many more than one entrepreneur.

Roughly, I’d say I end up meeting 30 to 60 entrepreneurs a month. Of the things that I see, I probably meet with about 10% of the [people who send] pitches my way.

Irina: Could you name some of the business plan competitions you’ve attended?

Saad: I just came back from Spain on December 7, where I was helping a couple of universities, University of Deusto in Basque country, the Madrid Network in Madrid.

There were several different competitions and clusters of entrepreneurs whom we were meeting with while we were there. The week before that, I was speaking at an entrepreneurship conference in Dubai. We probably had about 2,500 entrepreneurs who were there.

I spent another day on that trip in Amman, Jordan, meeting with entrepreneurs at an incubation center there.

When I say we’re out and about, we really are. I do a lot of stuff with Stanford, certainly, Berkeley, I’ve been involved with their business plan competitions, as an example. Not just the business plan competitions but the ecosystems in general.

I occasionally guest lecture at the Stanford design school. I know a lot of people there. This week [the week of December 10], I’m speaking at the network conference put on by GigaOM.

About a month and half ago, I spoke at the CrowdConf [The World’s First Conference on the Future of Distributed Work]. It’s constantly like that.

Irina: So, you do a lot of live interactions?

Saad: Absolutely. I think it’s my job to be where entrepreneurs are, and certainly to be there as a resource and help out and give back to the community . . . and also from the perspective of the next investment we want to be making. Smart people tend to hang out with other smart people, so that’s where we spend all of our time.

Irina: What are some other ways that entrepreneur could reach you?

Saad: I’m on Twitter, I have a blog, e-mail. Getting ahold of me is not difficult. Having said that, I think the best introductions are always referrals.

Given the volume of things that come our way, I think we always prioritize things that come to us and opportunities that, we hope, come to us from people we trust.

Back to your earlier question about where our deal flow comes from, it comes from people who are either entrepreneurs themselves, whom we’ve invested in, or serial entrepreneurs or really smart people, professors, whom we know and trust and whose filters we trust to the extent that you can get an introduction from one of those folks. It goes a long way. Those are the ones that immediately get our attention and urgency.

Generally speaking, any sales process that you would run at a company, you always want to come in with the best possible relationship. I think it’s no different in venture.

Irina: When you’re looking at a pitch, what factors get the most weight?

Saad: I’ve stopped reading business plans and putting a lot of stock in even a lot of the pitches that we read. I think the only thing that matters to me, at the end of the day, is people.

So, I almost spend all of my time looking for exceptional people. That’s pretty much my entire filter on what matters. That’s something that just comes from doing this for a long time.

A lot of people invest in technologies, markets, business plans, and financials. But as an early stage investor, I can tell you that almost everything we’ve ever invested in never looked the way we thought they were going to look when we first invested in them.

Companies change what they’re doing so often and go in different directions. For the most part, if you look at any of my companies, what they’re doing today is pretty different from what we thought they’d be doing. The ones that actually are successful, the one thing that they all share in common, is exceptional people – exceptional entrepreneurs, exceptional teams.

So, my filter is based entirely on people and finding those exceptional entrepreneurs.

This segment is part 3 in the series : Seed Capital From Angel Investors: Saad Khan, Partner, CMEA Capital
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