1Mby1M Virtual Accelerator Investor Forum: With Dennis Joyce of Alliance of Angels (Part 2)

Sramana Mitra: Going back to my question, in terms of stage validation, what is the sweet spot? Are you looking to see customers already in place? Are you looking to see revenue in place before you are willing to write a check?

Dennis Joyce: We’re looking to see as many customers lined up. A founder has to really know their space from a sales perspective. A lot of the best business plans are the ones where the sales and marketing team have lined up customers, have created inroads for their first set of customers, or have validated the product. We’re constantly driving towards more sales.

A lot of times, we see companies that don’t have any customers lined up. That’s a huge risk. You need to be constantly working towards mitigating that risk all the time. I wouldn’t say there’s one aha moment. We’re always looking for the teams that have an understanding of their product, customers, and what those customers are willing to pay for. The best ones are the ones that are constantly trying to drive sales and revenues for the product.

Sramana Mitra: You like B2B deals that are larger ticket items.

Dennis Joyce: That’s not necessarily the case. It doesn’t really matter what industry it is in, what type of product it is. I’m agnostic. What I’m interested in is the unit sales, the cost to acquire customers, are they charging a lot for the product, how long the sales cycle is, and the ability of the sales team to understand their marketplace and their vertical. I don’t have one area that I focus my investment on.

Sramana Mitra: But you just said that you want people to be charging a lot for what they’re selling. That typically tends to be the B2B deals – especially B2B enterprise deals.

Dennis Joyce: In some areas. I’ve invested in companies that are consumer products as well. I’m not your typical tech investor. I’m an angel investor. I’m agnostic in terms of product area.

Sramana Mitra: Geographically, you invest all over the Pacific Northwest or do you also invest outside of the Pacific Northwest?

Dennis Joyce: The Alliance of Angels is focused primarily on the Pacific Northwest. We look at deals coming out of Portland, Seattle, and up north to Vancouver. We get inbound deals from places like eastern Washington. Our primary focus would be Seattle-based companies. I focus my attention almost entirely on Seattle-based companies. I will syndicate, from time to time, a deal outside of Pacific Northwest, but it’s very rare.

Sramana Mitra: You said you see 35 deals a month. If you look at your last 15 months of deal flow, what trends do you see? Our community is all technology and technology-enabled services so if you could focus on the technology trends, that would be great.

Dennis Joyce: A lot of the trends that I’m seeing disappoint me sometimes. We see a lot of products in the SaaS space. These are products that automate certain functions within enterprise. These are products that provide a dashboard of oversight into certain areas of an enterprise that helps them optimize, which I think are very valuable and could be helpful for an acquirer. My question usually for these companies is how much are you charging, how costly is it to acquire customers, and how long does it take to drive sales. Those are some questions that I’m asking.

Sramana Mitra: Talk about your current portfolio. What have you invested in? What are some of the highlights and how do you decide? In those particular cases, what was it that caught your attention?

Dennis Joyce: I recently had a company acquired by Nordstrom called BevyUp, which provided a co-shopping solution for small businesses. One of their top clients was Nordstrom. I thought that in that case, the product was a very valuable tool for an enterprise such as Nordstrom. We really hit the nail on the head with that one.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Dennis Joyce of Alliance of Angels
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