Seed Capital From Angel Investors: Saad Khan, Partner, CMEA Capital (Part 9)

By guest authors Irina Patterson and Candice Arnold

Saad: We’ve actually invested in a company that’s in the social recruiting space, and we did it three years ago. The company is  Jobvite.

In the case of Jobvite, the insight we had was look, this build-out of the social graph – and Facebook and LinkedIn and Twitter – is going to be extremely important for how enterprises go about executing their services.

Recruiting, for instance, is one that’s a massive market. I think it’s absolutely going to be transformed by the build-out of the social graph.

Jobvite lets you do things like, let’s say I’m looking to hire a new associate at CMEA. Jobvite will help me. I can log in to Jobvite, and it will tell that, “Saad, from all your Facebook friends, your LinkedIn contacts, and your Twitter followers, here are the four people, who we think, based on their profile information, what they tweet about and who their friends are, would be a good fit for this job.”

So, they’ll search the social graph to help you find a fit for the person you’re looking to hire. It’ll also tell me that I should also send it to three other people in my network, because each of them has about four people in their networks who might be a good fit for this job.

They’ve basically built the integrations into all the social networks, as well as just searching the Web in general to be able to make recommendations like this and to automate them. I think it’s a very big deal.

The recruiting market is a $160 billion market. It’s absolutely been turned upside down by the LinkedIns and the Facebooks of the world. It’s totally changed the way people go about even thinking about recruiting, hiring, doing referrals, and doing even background checks and all that sort of stuff.

That’s an opportunity that I think is one where social has changed the game, where having that graph has changed the game, and we’ve invested in that.

I can tell you that – even before I joined CMEA – I’m on the advisory board and an investor in a company called Lending Club.

Lending Club is about peer-to-peer lending. What’s interesting is that when Facebook opened up their platform, Lending Club was one of the first applications on there. The insight there was, hey, guess what? Based on a connection between a potential lender and a borrower, if they have common friends, if they lived in the same hometown, went to the same college, all of those things have implications for repayment.

So, they started leveraging even that level of data for the consumer lending world. That’s one that I’ve certainly been excited about and have been involved with since the beginning. That’s another example of how social can be game-changing.

Everybody knows now that in the social gaming world – we talk about it all the time – the Zyngas, the Playfishes and the Playdoms of the world and how those have been exciting businesses in social commerce because of Groupon.

I think there are so many more places where social will be game-changing. Those are just the beginning. That’s another theme that we’ve been investing in for a long time. There are certainly lots of iterations of these things.

I guess, my point is just that, in the same way that the Internet was transformative to a bunch of different businesses – from finance to personals to commerce on and on and on – social is going to go through that same evolution.

Social is going to be game-changing on all those fronts because having the social graph mediate decisions you make in all aspects of whether it’s enterprise stuff, like recruiting, or commerce, gaming, lending, and and on and on.

Social is going to be important for the personals market. For all those things, it’s going to be transformative. We’ve been investing in it because we believe that it’s probably the most compelling new channel that’s emerged in the past few years.

Irina: What’s your preferred type of investment?

Saad: We’re venture investors, so I think the venture market in general has history and rules that have been built over time, and we follow all of them. We’re flexible in terms of how we structure things, and we’ve done things differently, but generally speaking, it’s by preferred shares and all those sorts of things that you read about in term sheets.

This segment is part 9 in the series : Seed Capital From Angel Investors: Saad Khan, Partner, CMEA Capital
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